The Great Recession stunts Black Hills growth


(MGN Online graphic)

A pre-recession boom goes bust

submitted by Denise Ross, Black Hills Knowledge Network

The Great Recession hit the Black Hills much harder than South Dakota as a whole, a recent analysis by the Black Hills Knowledge Network shows.

Sioux Falls and the state as a whole enjoyed steady growth during the past five years while Rapid City and the Black Hills stalled and have not resumed substantial growth. A sharp drop in manufacturing in 2008 after a boom from 2005-2007 appears to be the underlying cause.

The Black Hills Knowledge Network analysis looks at gross sales, which is essentially the total amount of money paid for goods and services. (See the statutory definition for gross sales at the end of this release.)

Find more information and interactive, exportable charts on the Black Hills Knowledge Network site.

Pre-recession manufacturing boom

The Black Hills manufacturing boom nearly tripled manufacturing gross sales, from $560 million in 2005 to $1.52 billion in 2007. But in 2009, manufacturing gross sales fell below pre-recession levels to $360 million and bottomed out in 2010 at $249 million.
The total lost sales from the decline in manufacturing in Rapid City was more than $1.27 billion. This loss accounts for a 16 percent decline in gross sales for the Black Hills region since 2007.

Looking at the economy as a whole, the Black Hills lost annual gross sales of more than $750 million between 2007 and 2012, in inflation-adjusted dollars. This drop followed substantial growth from 2002 to 2007 when gross sales increased 26 percent, from $6.34 billion to $7.99 billion.

Retail sales at stores like Walmart helped Rapid City avoid an even bigger drop in sales.

Strength in retail sales has kept Rapid City’s overall gross sales from dropping too much. That category dipped, from a pre-recession high of more than $2.7 billion in 2005 to $2.4 billion in 2009 but has rebounded to pre-recession levels, as the chart below shows.


The blow to manufacturing drove up Rapid City’s unemployment rate, as would be expected. In May 2007, there were 3,010 production jobs in Rapid City. By May 2010, there were 2,170, a 27 percent decrease.

In 2008 the Rapid City metropolitan area had an unemployment rate of 2.9 percent, fourth lowest in the nation. By 2009 that had risen to 5.2 percent, ranking Rapid City twelfth in the country.

The effects appear to be lingering. A look at gross sales in Rapid City during June 2012 and June 2013 shows that modest growth year over year disappears when the numbers are adjusted for inflation.

Gross Sales and Other Data on Black Hills Knowledge Network Site

Statistics on gross sales in the Black Hills and South Dakota and interactive graphs can be found on the Black Hills Knowledge Network. The data provided by the Black Hills Knowledge Network comes from the South Dakota Department of Revenue. With a grant from the Bush Foundation, the library-based community information project is working with the Wilder Foundation and the Rural Life and Census Data Center at South Dakota State University to make key community indicators more accessible to policymakers, community planners, non-profit organizations and businesses in the Black Hills.

About Black Hills Knowledge Network

The Black Hills Knowledge Network is a library-based regional information service. Working in partnership with local content providers, the Black Hills Knowledge Network connects people to ideas and local information to strengthen community. Sponsored by the Black Hills Area Community Foundation and a consortium of ten public libraries including Rapid City, Spearfish, Sturgis, Custer, Deadwood, Lead, Oglala Community College, Piedmont Valley, Wall and Whitewood, the project has received funding from the John S. and James L. Knight Foundation, the Bush Foundation, Black Hills Vision, Regional Health, the South Dakota Community Foundation, the Rapid City Library Foundation, Friends of the Rapid City Library, the South Dakota Humanities Council (an affiliate of the National Endowment for the Humanities), and other local funders. Learn more at

Gross sales definition


10-45-1.14.   Gross receipts defined. For the purposes of this chapter, the term, gross receipts, means the total amount or consideration, including cash, credit, property, and services, for which tangible personal property, any product transferred electronically, or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:
(1)      The retailer’s cost of the property or service sold;
(2)      The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the retailer, all taxes imposed on the retailer, and any other expense of the retailer; and
(3)      Except as provided in chapter 10-46A or 10-46B, charges by the retailer for any services necessary to complete the sale whether or not separately stated, including delivery charges.

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The Black Hills Knowledge Network is a project of of the Black Hills Community Foundation in cooperation with public libraries throughout the Black Hills