Capital Comments

Gross Domestic Product for Counties

Tuesday, December 17th, 2019

We just received the most wonderful gift from the U.S. Department of Commerce, Bureau of Economic Analysis. For the first time ever, the BEA has calculated Gross Domestic Product for counties.

GDP is the value of goods and services produced each year, in current prices or adjusted for inflation. It’s the most complete measure of economic activity we have. The BEA has added up the GDP for the nation and the states for decades, but never for counties. Now it has provided those numbers for 18 years, 2001 through 2018. Check their website at www.bea.gov.

It’s irresistible, so why resist? Let’s look at economic activity in Indiana counties, how much there is, what kind it is, when it happened and (now) where it is.

Marion County had by far the biggest gross domestic product in Indiana in 2018. Of course we know that Indianapolis is our biggest city. Marion has about 14% of the state’s population, but it produces 26% of the state’s GDP. Lots of people who live in the suburban doughnut produce goods and services in Indy.

Counties two and three are no surprise. Lake has about 7 percent of the state’s GDP, and Allen has 6 percent. Number 4 is Hamilton County, the Indy doughnut county with Noblesville, Carmel and Fishers. Hamilton was already 7th in 2001 and continued to grow rapidly. But its neighbor, Boone, grew faster. Boone had the state’s 37th biggest economy in 2001. Now it’s 17th. Boone had the biggest upward movement in the past two decades.

On the other end of that scale is Fayette County, where Connersville is located. Fayette dropped 22 spots in the GDP ranking, from 54th in 2001 to 76th in 2018. In a small county, the loss of a big employer can make an enormous difference.

The county GDP data include 21 different industry categories, from “arts, entertainment and education” to “wholesale trade.” Let’s look at the geography of industry in Indiana.

Indiana is still a manufacturing state. In 2018, manufacturing accounted for 27 percent of state GDP. It’s located just where you’d expect: Marion, Lake and Elkhart counties. About 38 percent of Indiana manufacturing output comes from those three counties. The most manufacturing-dependent counties are Howard (that’s Kokomo), DeKalb (that’s Auburn) and Bartholomew (that’s Columbus). Each has more than 56 percent of its county GDP in manufacturing.

Dependence on manufacturing means vulnerability to recessions. Howard County saw its manufacturing output fall 44 percent during the Great Recession, 2007 to 2009. Elkhart lost 35 percent. Howard recovered its previous manufacturing peak by 2013, but it took Elkhart until 2017 to get back to its earlier level.

Farmland may occupy most of the scenery in Indiana, but agriculture is a relatively small part of state output. “Agriculture, forestry, fishing and hunting” is a big deal in some counties, though.  Farming is 23 percent of Jay County’s GDP (that’s Portland), 20 percent in Warren (that’s Williamsport) and 15 percent in Rush (that’s Rushville).

Farming can be just as variable as manufacturing. In Warren County between 2010 and 2018, the value of agricultural production was as high as $99 million and as low as $25 million. Variations in weather and commodity prices are the causes.

Consider “utilities.”  Gibson, Spencer and Pike counties in southwest Indiana are first, second and third in utility production. Each has a big electric power plant. Those plants are in the southwest, probably because that’s where the coal is. Sure enough, Gibson County is number one in “mining, quarrying, and oil and gas extraction.”

Number one in utility growth, though, is Benton County (where Fowler is), because of the wind turbines. The numbers announce wind energy loud and clear. In 2006, Benton’s utility production was $60,000. Four years later it was $81 million.

What about my industry? St. Joseph County is number one in “educational services.” But wait, Purdue and IU have bigger enrollments than Notre Dame. The answer: Educational services refers to the private sector. Notre Dame is a private university. Purdue and IU are included in “government and government enterprises.” Marion has the state capital, so it’s first in government. But Tippecanoe is second, and Monroe is third.

There we are.

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Author: Larry DeBoer, ldeboer@purdue.edu
Editor: Charles Wineland, cwinelan@purdue.edu
Category: Agricultural Economics, Extension

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