Economic experts are scratching their heads about never-before-calculated data released Wednesday by the U.S. Department of Commerce showing that the total value of goods and services produced in the Duluth metro area declined slightly in 2005.
The Bureau of Economic Analysis made public experimental data for each of the nation's 363 metropolitan statistical areas (MSAs) that showed the gross domestic product of St. Louis and Carlton counties in Minnesota and Douglas County, Wis., fell 1.4 percent from 2004 to 2005 after years of growth.
The numbers were adjusted for inflation, because economists consider inflation-adjusted numbers to be the best way to make year-to-year comparisons of that type. Unadjusted numbers show a slight increase in the MSA's gross domestic product.
Nevertheless, Tom Stinson, Minnesota's state economist said in a phone interview: "I would take these [numbers] with a grain of salt."
According to the data, adjusted for the recent addition of Carlton County to the MSA, the gross domestic product:
* jumped 4.6 percent from 2001 to 2002.
* increased 0.5 percent from 2002 to 2003.
* grew 3.5 percent from 2003 to 2004.
* fell 1.4 percent from 2004 to 2005.
"That [2005 number] doesn't sound right to me," said Jim Skurla, acting director of the University of Minnesota Duluth Bureau of Business and Economic Research.
The Duluth MSA's gross domestic product ranked 348th in the nation at $7.59 billion, adjusted for inflation.
The year 2005 was generally a good one, according to data from various sources. Minnesota Department of Revenue figures show taconite production increased. Forest product prices soared, hit a peak and began to decline. Unemployment was in the 5 percent range, state numbers show. The Duluth Seaway Port Authority said total port cargo tonnage increased slightly. Health-care employment was growing, according to figures from the Minnesota Department of Employment and Economic Development.
"Maybe this is a statistical fluke," said Tony Barrett, economics professor at the College of St. Scholastica. "It's very hard to capture all the flows in and out."
According to the Bureau of Economic Analysis data, financial services decreased 0.43 percentage points and government fell 0.25 percent. Other declines were in natural resources and mining, construction, administrative and support services, accommodation, amusement, gambling and recreation.
However, many categories weren't reported because the numbers were too small or one company dominated the category.
Stinson noted that the Bureau of Economic Analysis figures relied heavily on wage data compiled by the states and that Minnesota's 2005 data is questionable. With Duluth in the bottom 20 percent and the Twin Cities metro area in the bottom 40 percent, "I think the whole state's a little odd," he said.
"My overall reaction is these are interesting numbers to look at, and we certainly would like to see Minnesota do better in the data," Stinson said. "But I wouldn't leap to any major conclusions based on the data."