Gross Domestic Product Recovery in Northwest OregonJanuary 2, 2019 Northwest Oregon’s recovery from the Great Recession was uneven. Employment grew faster in Benton and Clatsop counties and lagged in Columbia and Lincoln counties. Tillamook County’s employment growth was in between these two groups. The change in gross domestic product of the counties seems to have followed roughly the same general pattern.
The Bureau of Economic Analysis (BEA) recently began estimating county-level gross domestic product for the first time. Gross Domestic Product (GDP) is the value of goods and services produced in an area. The BEA’s estimates show that Benton County’s GDP grew by roughly one-half billion dollars (+13%) from 2012 through 2015. Benton County’s employment passed its pre-recession high in 2012, so it was on a strong growth path even before the first year of GDP data. The table also shows that Benton County provided almost half of the region’s $8.7 billion GDP in 2015. Despite a large public sector, most of the Benton County GDP growth came from the private sector.
Clatsop County’s employment also passed its pre-recession high in 2012 and had solid GDP growth early in this series. In fact, its GDP grew the least in 2015 as its economy returned to more normal growth after the recovery phase. Clatsop County’s GDP grew by $68 million over the four years. The county’s growth came from its private-sector service industries. Clatsop County’s goods-producing industries and government sector actually shrank a little. Although Clatsop County had the second-largest net change in GDP, Tillamook County nearly equaled Clatsop County’s net change and it had the second-fastest growth rate in GDP – 10 percent in the four years. Most of Tillamook County’s growth came from its goods-producing industries. Its government sector shrank just slightly over the four years.
As with their employment, Lincoln and Columbia counties struggled to find solid GDP growth. Columbia County’s GDP fell 0.4 percent in 2013 and 3.5 percent in 2014 before rebounding strongly in 2015. Its GDP growth was split fairly evenly between goods-producing industries and service industries. Columbia County’s government sector also shrank just slightly. Lincoln County’s GDP fell 4.7 percent in 2013 and 0.1 percent in 2015. In fact, Lincoln County’s GDP ended up 1 percent lower in 2015 than it was in 2012. Lincoln County’s loss was split evenly between its goods-producing industries and its government sector. The county’s service industries squeaked out a small gain in output over the four years.
The drop in GDP in Lincoln County is surprising. The county wasn’t growing rapidly, but it was adding jobs slowly – about 500 jobs over these four years. One possibility is that there could be an unusual amount of error in the Lincoln County GDP estimates; they are just estimates after all. But a look at the income estimates for the county also show that business proprietor’s income and income from the construction industry fell over that time period, so some parts of the economy were still struggling to recover. Another possible explanation is simply that there are differences between employment, income, and gross domestic production. GDP is an estimate of what is actually produced in the area, regardless of the employment and income in the area. If a large firm headquartered outside the county has a branch or subsidiary in Lincoln County that experiences less business, it will be recorded as a lower GDP for Lincoln County even though the local operation’s employment and payroll may remain the same.
A final caution in looking at county-level GDP figures is that these figures are adjusted for inflation, and that adjustment is an imperfect process. The BEA estimates inflation rates for each county and industry and adjusts county’s GDP accordingly. The inflation adjustments for the rural counties in Northwest Oregon generally were higher than for Benton County, and that may have contributed to the lower estimated GDP growth in the rural areas. The BEA is still finalizing the data sources and methods for this data series, and they will make GDP estimates for more recent years in the future.