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New data shows which Minnesota counties saw economic growth…or not

Today, the Bureau of Economic Analysis released its prototype estimated for Gross Domestic Product by County for the years 2012 to 2015. True, they are only prototypes and cover a limited and fairly historic set of years. But they represent the first attempt to quantify this economic variable – GDP – at the county level. This is important for state economic analysis.

GDP by county

Not surprisingly, Hennepin County dominated the state economy. Across the period, it accounted for a steady 40% of state GDP. Ramsey, Dakota, Anoka, and Olmsted rounded out the top five which accounted for 67% of Minnesota’s GDP in 2015.

Between them, these five counties accounted for 49% of the state’s population in 2015. But lots of people live elsewhere and travel into Hennepin County to work. While their residence might show up in, say, Dakota County, their contribution to GDP shows up in Hennepin County. Where jurisdictions are so relatively small and mobility between them so easy, per capita GDP numbers can obscure as much – if not more – as they illuminate.

One thing we can do more usefully, is to divide the GDP generated in a county by the number of people working there generating it. This gives us a measure of county productivity. The results here are a little more diverse. The best performing counties are Martin (by some distance), Marshall, and McLeod with Hennepin and Dakota filling out the top five. The bottom five counties are Clearwater, Lake of the Woods, Cass, Pine and Mahnomen.

GDP growth

We only have four years of data, but it is possible that we might pick up at least the scent of a trend by looking at GDP growth by county.

On this measure, Hennepin County falls from the top spot, ranking just 24th out of 87 counties. Instead, the top five counties for GDP growth between 2012 and 2015 are Carver, Olmsted, Sherburne, Mower, and Chisago. 34 counties actually saw their GDP decline over the period, the five worst affected being Koochiching, Lake, Redwood, St. Louis, and Kandiyohi. Figure 1 shows the geographic spread of these numbers.

Figure 1: Real GDP growth by county, 2012 to 2015

Source: Bureau of Economic Analysis

As limited as this data is it is useful. Hopefully the BEA will continue with the project, bringing the series up to date and even pushing it back in time.

John Phelan is an economist at the Center of the American Experiment.