Economic decline widespread in 2009

February 28, 2011
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Real U.S. GDP by metropolitan area declined 2.4 percent in 2009 after declining 0.4 percent in 2008, according to statistics released by the U.S. Bureau of Economic Analysis. The economic decline was widespread as real GDP declined in 292 of 366 (80 percent) metropolitan statistical areas, led by national declines in durable-goods manufacturing, construction and business services.

The decline in durable-goods manufacturing hit the metropolitan areas of the Great Lakes region particularly hard. Kokomo, Elkhart-Goshen and Columbus in Indiana and Holland-Grand Haven all had double-digit declines in real GDP growth primarily due to declines in durable-goods manufacturing. In the three Indiana metropolitan areas, durable-goods manufacturing subtracted more than ten percentage points from real GDP growth.

The continued decline in construction over the past few years adversely affected metropolitan areas in the Rocky Mountains, southwest, southeast and far west regions the most. Declines in construction continued in 2009 in places like Lake Havasu-Kingman, Ariz.; St. George, Utah; Prescott, Ariz; Naples-Marco Island, Fla.; and Cape Coral-Fort Myers, Fla. In Las Vegas-Paradise, Nev., construction turned sharply downward in 2009. In all of these metropolitan areas, construction subtracted more than two percentage points from real GDP growth in 2009.

The effect of the decline in professional and business services was more widespread. In St. Louis, Mo., Detroit-Warren-Livonia, and Boulder, Colo., professional and business services subtracted more than two percentage points from real GDP growth in 2009. All of these metropolitan areas declined by more than the national average.

In contrast to most industries, natural resources and mining was a strong positive contributor to growth in 2009. Significant growth in mining resulted from sharp declines in prices for petroleum, natural gas and other mining products. Growth accelerated in 70 metropolitan areas, most notably in areas where natural resources and mining industries are concentrated such as Casper, Wyo., and Oklahoma City, Okla. Casper had the fastest real GDP growth (22.4 percent) of any metropolitan area in 2009 due largely to growth in the mining sector.

The natural resources and mining industry contributed more than 10 percentage points to growth in several areas such as Casper, Wyo., Oklahoma City, Okla., and Shreveport-Bossier City, La. In addition to natural resources and mining, several metropolitan areas with large concentrations in nondurable-goods manufacturing — Pascagoula, Miss., Vallejo-Fairfield, Calif., and Lake Charles, La. —grew significantly in 2009.

More information on the methodology used to produce the advance 2009 statistics, on the revised GDP-by-metropolitan-area statistics for 2001–2008, and on revisions to the GDP-by-metropolitan-area statistics will appear in an article in the March 2011 issue of the “Survey of Current Business,” BEA's monthly journal.

Ralph Stewart is with the U.S. Bureau of Economic Analysis.

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