David Flynn

Agriculture remains one of North Dakota’s top economic drivers, even though its contribution to Gross Domestic Product has slipped, according to information shared at the 2026 Regional Economic Conditions Conference hosted by the Federal Reserve Bank of Minneapolis on Friday, Jan. 9.

“Mining, right now, is the largest share of North Dakota’s GDP,” said conference presenter David Flynn, professor of Economics and Finance at the University of North Dakota, Grand Forks. “This includes oil, gas, and oil and gas support activities. Next comes real estate – rental and leasing – as a category. Third is manufacturing, and then fourth is agriculture, and this is a real change that’s happened over the last 15-20 years. The contributions of agriculture into GDP for the state have been declining.”

Based on annual growth rate over the last two and half years, Flynn’s figures showed the real estate sector ranked fifth with a 7.78% growth rate. Manufacturing, at 7.75%, ranked sixth. Mining has declined 2.55% in North Dakota, ranking it 18th on the growth chart. Agriculture is at a negative 7.78%, at the bottom of the 19 sectors measured.

“Ag is having a tougher time in terms of generating that growth. It’s not any one thing necessarily, but it’s a lot of things, and there needs to be, I think, some policy attention paid to this aspect,” Flynn said.

“Oil, obviously, continues to perform in North Dakota quite well. It’s not the volatile nature that it was prior to the first boom/bust iteration that was 2014-2015. There’s also been some realignment in the state energy portfolio of late, based on executive orders and other federal dictates. The entire country is trying to adjust to changes in administration policy,” he said. “It’s still a keystone sector. It’s one of the highest impact sectors for the state of North Dakota. Agriculture still is a high impact sector. The supply chains for those industries are significantly present in the state, which makes them a very important part of that growth and growth generation.”

Looking at another economic measure, Flynn noted the labor market is in a state of flux following the population boom created by the energy sector.

“You’re not seeing as much in-migration,” he said. “Reallocations of individuals, though, are still occurring within the state. We’re still seeing a lot of movement around, within the state. And when we’ve looked and asked questions of our Institute of Policy and Business Analytics (at UND), what we’re hearing is that, very basically, the ability to have work-life balance is still a primary consideration, and so you’re seeing people relocate within the state for those kinds of factors.”

The labor market remains tight, but it is variable, Flynn said. Some sectors are having an easier time hiring than other sectors.

Nonfarm payrolls are expected to increase going forward, but at a decreasing rate, he said. The employment sector is grappling with how to address remote work and childcare availability and affordability, he added.

“These are persistently the top two concerns and questions that I hear from people in the state, both from the worker side, but from the employer side as well,” Flynn said.

His concern over future employment difficulties stems from a labor participation rate that is nearly 70% in North Dakota.

“The people we have are working at a very high rate, and that worries me from the perspective of, you could very easily turn into a very tight labor market if participation drops or if you start to see the demand increase,” he said. “We don’t have extra people just laying around without work.”

North Dakota’s unemployment rate, which lingers around 2.6%, indicates labor resources are already tight, even if some sectors independently enjoy a larger labor pool, he said.

Additionally, tariffs are a hot topic because of the impact on the agriculture sector and on consumer prices, Flynn said.

Starting in April of 2025 when tariff policy was getting attention, truck border traffic into North Dakota began declining. Flynn presented data showing traffic down 25% in September 2025 compared to September 2024.

Truck movement is recovering but the extent is not yet known, he said.

“The volatility is a big issue, too. The production sectors in North Dakota are having radically different experiences with market access, with the ability to sell their goods. It’s been very difficult to navigate with the on-again, off-again aspect of tariffs,” Flynn said.

Significant and often varied impacts to consumer products and groceries has unsettled consumers, too.

“North Dakota has been impacted by federal policy in a way not typical of recent administrations,” Flynn said. “People are having a lot of adjustments that they are just not used to in North Dakota as we’re seeing more integration here with the national economy.”