Kansas economy shrinks in 1st quarter of 2017

? The Kansas economy shrank at an annual rate of 0.7 percent in the first quarter of 2017, according to numbers released this week from the U.S. Bureau of Economic Analysis.

That contraction happened at a time when the national economy was growing at a pace of 1.2 percent.

It also followed a quarter of virtually flat economic growth, when the state’s gross domestic product, or GDP, grew at only a 0.1 percent annual rate.

Quarterly change in gross domestic product by state, expressed in annualized rates, for the first quarter of 2017.

Kansas was one of only seven states whose GDP shrank from the fourth quarter of 2016 to the first quarter of 2017, according to the BEA. GDP is defined as the market value of goods and services produced by the labor and property located in a state.

Most of those states were in the upper Midwest. The hardest hit was Nebraska, whose economy shrank at a 4 percent rate in the quarter.

In both states, the sharpest decline was in the agriculture sector. In Kansas, the agriculture sector shrank at an annual rate of 71 percent. Agriculture, however, makes up only a small part, about 2 percent, of total state GDP in Kansas, and therefore small fluctuations can look large on a percentage basis.

BEA spokesman Todd Siebeneck said the agriculture sector tends to be volatile in that way. He noted that in the first quarter of 2016, the agriculture sector in Kansas was growing at a 73 percent rate.

Retail trade, which accounts for nearly 7 percent of state GDP in Kansas, shrank at a 4.4 percent rate over the quarter. Declines were also reported in utilities, finance and insurance, information services, professional services, business management, educational services and arts and entertainment.

The mining sector in Kansas, which includes oil and gas production, saw the biggest quarterly growth, at 5.1 percent, but it was down 4 percent compared with the first quarter of 2016. The oil and gas industries, however, also make up only a small part, 1 percent, of total state GDP in Kansas.

Manufacturing, which accounts for nearly 16 percent of state GDP in Kansas, grew at a 4.1 percent rate during the quarter, but declined by 1 percent compared with the first quarter of 2016.

There was also quarterly growth in construction, wholesale trade, transportation and warehousing, real estate, administrative services, health care, accommodation and food service and government services.