It might not seem spectacular, but the 1.7 percent increase in gross domestic product the Twin Ports region logged in 2006 made area economists smile.
The figure was released Thursday by the U.S. Department of Commerce's Bureau of Economic Analysis.
"I really believe it's our slow growth, our steady growth, that has protected us from recession," said Tony Barrett, professor of economics at St. Scholastica.
The total value of goods and services -- the gross domestic product -- produced in the Duluth Metropolitan Statistical Area for 2006 was about $9.3 billion in current dollars or $7.9 billion in 2001 dollars. The growth was about what economists here anticipated, after a more sluggish 0.4 percent growth in 2005. The Duluth MSA is defined as St. Louis, Douglas and Carlton counties. The Duluth MSA's growth rate ranked 228th out of the 363 MSAs in the country.
The 1.7 percent figure should bode well for the future, economists argue.
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The industries that accounted for the growth also have a lot to do with why local economists were pleased Thursday.
While the strongest growth was in the natural resources and mining and education and health services sectors, the region also saw healthy growth from professional and business services, which include fields such as lawyers, architects and engineers.
Barrett cited the increasing specialization by local architects and engineers on construction of environmentally friendly buildings, putting these companies in demand across the country.
"We have a growing reputation in green design and green engineering," said Drew Digby, Northeast Minnesota labor analyst for the Department of Employment and Economic Development. "It matches a lot of the other data that we've seen."
While the financial and construction sectors both shrank during the year, Jim Skurla, acting director of the UMD Bureau of Business and Economic Research, said he anticipates the construction sector will bounce back as work begins on a string of new plants on the Iron Range.
"With these new mining expansions, it's going to be stronger," Skurla said. Natural resources contributed more than half the year's growth, and remains a major driver of the local economy, Skurla said.
Economists expect 2007 will look about the same as 2006, and 2008 also will turn out to be a growth year, though probably not as much so as 2007.
"I'd be shocked if it was much more than 1.7 percent in 2008," Barrett said. "We're probably continuing our nice, steady, unspectacular growth rate," he said.
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PATRICK GARMOE can be reached at (218) 723-5229 or pgarmoe@duluthnews.com
