Portland Tri-County Gross Domestic Product – A Measure of the Economy
July 18, 2023In another sign of the strong economic rebound following the Pandemic Recession in 2020, gross domestic product (GDP) growth was strong in the three largest Portland-area counties in 2021. GDP is composed of goods and services produced for sale in the market and measures the monetary value of final goods and services – that is, those that are bought by the final user and produced in a country or geographical area in a given time period.
GDP counts all of the output generated within the borders of a country or geographical area and also includes some nonmarket production, such as defense or education services provided by the government. GDP is important because it gives information about the size of the economy and how an economy is performing.
Real Versus Nominal GDP
Because GDP is collected at current, or nominal, prices, it often makes sense to adjust for inflation when comparing GDP values over time. To determine “real” GDP, its nominal or current value must be adjusted to take into account price changes to allow us to see whether the value of output has gone up because more is being produced or because prices have increased. A statistical tool called the price deflator is commonly used to adjust GDP from nominal to constant or real prices.
You can read more about statewide trends in this companion article.
A Focus on the Economy in the Portland Tri-County
The three largest counties in the Portland Metro Statistical Area, Clackamas, Multnomah, and Washington counties, generated over half (58.2%), or $132.5 billion, of Oregon’s real GDP in 2021. During the downturn in the economy from 2019 to 2020, real GDP in Clackamas and Multnomah counties fell by 1.9% and 4.8%, respectively. Washington County actually grew its economy during this period, albeit by a minimal 0.7%.
During the next year’s recovery in 2021, the economy rebounded in all three counties with real GDP growing by 6.3% in Clackamas, 6.9% in Multnomah, and 4.2% in Washington County.
Clackamas County: Growth in Real GDP by Industry
During the recent recession, Clackamas County saw a loss of $374 million in real GDP from 2019 to 2020. During the following year, the county rebounded, increasing its GDP by $1.2 billion, or by 6.3%, from 2020 to 2021.
In 2021, total GDP reached $20.5 billion in Clackamas County which was the third highest GDP of Oregon’s 36 counties. Over one-half (51%) of growth in GDP from 2020 to 2021 came from two broad industry sectors: private education, health care, and social assistance ($339 million); and transportation and warehousing ($276 million). Two industries saw a decline in GDP during this period: professional and business services (-$6.3 million), and agriculture (-$4.1 million).
Multnomah County: Growth in Real GDP by Industry
During the recent recession, Multnomah County’s GDP fell by $2.97 billion, a loss of 4.8% from 2019 to 2020. In the following year, the county rebounded, increasing its GDP by $4.0 billion from 2020 to 2021.
In 2021, total GDP reached $62.5 billion in Multnomah County which was the highest GDP of Oregon’s 36 counties. Four broad industries provided 70% of growth in GDP from 2020 to 2021: arts, entertainment, and recreation ($871.2 million); government ($822.2 million); wholesale trade ($609.4 million); and finance, insurance, and real estate ($524.3 million). The five industries suffering losses in GDP during this period included manufacturing, agriculture, mining, utilities, and construction.
Washington County: Growth in Real GDP by Industry
During the recent recession, Washington County’s GDP increased slightly by $331 million, or 0.7%, from 2019 to 2020. During the following year, the county’s real GDP increased by $2.0 billion, or 4.2%, from 2020 to 2021.
In 2021, total GDP reached $49.5 billion in Washington County, which was the second highest GDP of Oregon’s 36 counties. One industry sector provided the majority (72%) of growth in GDP from 2020 to 2021: professional and business services ($1.4 billion). Two industries suffered losses during this period: manufacturing (-$705 million) and utilities (-$15 million).
Industry Mix
During 2021, the three largest counties in the Portland MSA (Clackamas, Multnomah, and Washington) contributed a total of $132.5 billion (58.2%) to Oregon’s $227.98 billion in GDP.
Both Clackamas and Washington counties’ highest producing industries included the same three industry sectors:
- Finance, insurance, and real estate
- Manufacturing
- Professional and business services
The highest producing industries in Multnomah County included:
- Professional and business services
- Finance, insurance, and real estate
- Government