Iowa’s gross domestic product grew 7.7% in the second quarter, the eighth-highest ranking in the country as the state and the nation continue their recovery from the coronavirus pandemic.

According to the report from the U.S. Commerce department’s Bureau of Economic Analysis, Iowa’s growth in GDP outdistanced the national rate and its neighboring states. The GDP measures the monetary value of finished goods and services in each state and the country.

In Iowa, the monetary value of GDP in the second quarter was nearly $220.93 billion, up from just over $210 billion in the first quarter of 2021, and well above the $179.9 billion in the same quarter of 2020, when the coronavirus pandemic caused businesses to shut down and to furlough or layoff workers and caused disruptions in the supply chain.

According to the report, released on Friday, the increase in the second-quarter GDP reflects the continued economic recovery from the pandemic, and the continued government response to the pandemic. Government assistance to businesses and state and local governments increased in the second quarter, while benefits to households, such as direct economic payments, declined, the report stated.

Iowa’s strong second-quarter showing followed a first quarter where the state ranked 44th in its GDP growth.

The report showed that the agriculture sector was the biggest contributor to the growth in the second quarter at 3.9%, followed by a 1.28% increase in accommodation and food services, which follows a national trend of bouncing back from the pandemic.

Also following a national trend, retail trade in Iowa shrank 0.97% while wholesale trade was down 0.10%.

Other sectors of the economy, such as durable and nondurable goods, construction, real estate, and arts and entertainment all experienced small growth of 0.50% or less in the second quarter, the report showed.

Iowa’s growth outpaced the national rate of 6.7%, and was ahead of its neighboring states.

Minnesota’s GDP grew by 6.5% in the second quarter, Wisconsin saw its GDP grow by 5.7%, Illinois was at 6.8%, Missouri at 6.7%, South Dakota at 4.2% and Nebraska saw growth in its GDP at 2.9%.

Tom Root, associate professor of finance at Drake University, said that despite the economic growth seen in the second quarter, employment continues to hinder the economic recovery.
“While the size of the economy is larger than prior to the pandemic, employment continues to lag its level prior to the pandemic,” Root said.

According to the report, the GDP data can be useful for analyzing current economic conditions, and can serve as a basis for decision making by government agencies to project tax revenues and forecast energy and water use, by academic economists for research, and by business and trade groups for market research.