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Gross Domestic Product by Metropolitan Area: New Statistics for 2016 and Updated Statistics for 2001-2015.

REAL GROSS DOMESTIC PRODUCT (GDP) grew in 267 of the nations 382 metropolitan areas in 2016, according to statistics released by the Bureau of Economic Analysis on September 20, 2017. Real GDP--the sum of current-dollar GDP for all metropolitan areas deflated by national price measures--grew 1.7 percent in 2016 down from 2.9 percent in 2015. Metropolitan area growth in 2016 ranged from 8.1 percent in Lake Charles, LA, and Bend-Redmond, OR, to -13.3 percent in Odessa, TX (chart 1). GDP by metropolitan area--the counterpart to GDP in the national income and product accounts (NIPAs)--is the most comprehensive measure of overall economic activity in a metropolitan area. Additional highlights for 2016 include the following:

* Professional and business services; information services; and finance, insurance, real estate, rental, and leasing led growth across metropolitan areas.

* Mining and nondurable-goods manufacturing declined in many areas across the country.

The importance of metropolitan areas

Collectively, metropolitan areas accounted for more than 90 percent of U.S. GDP in 2016, with the five largest metropolitan areas accounting for almost a quarter of national GDP. In most states, metropolitan areas represent a large share of the state's GDP. Among metropolitan areas located within a single state, Urban Honolulu, HI, accounted for the largest share of GDP by state in 2016 (77.2 percent).

The size of metropolitan areas varies significantly. Most metropolitan areas have populations of less than 500,000. GDP for these small metropolitan areas ranges from $31.2 billion (Trenton, NJ) to $2.0 billion (Sebring, FL). GDP for medium metropolitan areas, which include areas with populations between 500,000 and 2,000,000, ranges from $252.5 billion (San Jose-Sunnyvale-Santa Clara, CA) to $17.1 billion (Deltona-Daytona Beach-Ormond Beach, FL). GDP for large metropolitan areas, which include areas with populations greater than 2 million, ranges from $1.7 trillion (New York-Newark-Jersey City, NY-NJ-PA) to $111.1 billion (Las Vegas-Henderson-Paradise, NV).

Metropolitan areas also vary in terms of their economic output. Much of this variation can be explained by the industries that are concentrated in the areas. Often the trends shown in national GDP are driven by a few metropolitan areas in which specific industries are most heavily concentrated.

Industry growth

Growth in the U.S. metropolitan portion was led by professional and business services, information services, and finance, insurance, real estate, rental, and leasing. One or more of these three industry groups contributed to growth in 362 of the 382 metropolitan areas nationwide, while mining and nondurable-goods manufacturing declined in many areas across the country (table 1).

Professional and business services. Professional and business services grew 2.7 percent in the nations metropolitan areas in 2016. This industry group contributed to growth in 273 of the nation's 382 metropolitan areas, most notably in Ocala, FL, and Oshkosk-Nennah, WI, which had overall growth of 5.0 percent and 2.6 percent, respectively (chart 2).

Information services. Information services grew 6.5 percent in the nations metropolitan areas in 2016. This industry group contributed to real GDP growth in 260 metropolitan areas, most notably in Provo-Orem, UT, and in Seattle-Tacoma-Bellevue, WA, which had overall real GDP growth of 6.1 percent and 4.3 percent, respectively (chart 3).

Finance, insurance, real estate, rental, and leasing.

Finance, insurance, real estate, rental, and leasing was the third-largest driver of growth for the nation s metropolitan areas, growing 1.2 percent in 2016. It contributed to growth in 217 metropolitan areas, most notably in St. Cloud, MN, and Elizabethtown-Fort Knox, KY, which had overall real GDP growth of 5.3 percent and 4.6 percent, respectively (chart 4).

Mining. Real GDP for this industry group declined 9.3 percent for the nation s metropolitan areas. It subtracted from growth in 241 metropolitan areas. Sizable declines in this industry group occurred in Victoria, TX, and Tuscaloosa, AL, which had overall declines in real GDP of 10.2 percent and 4.3 percent, respectively (chart 5).

Nondurable-goods manufacturing. The U.S. metropolitan portion experienced a 0.2 percent decline in this industry in 2016. The industry also declined in 201 metropolitan areas. The largest declines occurred in Rocky Mount, NC, and Utica-Rome, NY. Overall real GDP declined 6.2 percent in Rocky Mount, NC, while it was flat (0.0 percent) in Utica-Rome, NY (chart 6).

Growth by size of metropolitan area

Large metropolitan areas generally showed less volatility than medium and small metropolitan areas. Large metropolitan areas had a narrower range of growth rates, 8.4 percentage points, while medium and small metropolitan areas had larger ranges of growth rates, 9.5 percentage points and 21.4 percentage points, respectively.

Large metropolitan areas. Of the large metropolitan areas, San Francisco-Oakland-Hayward, CA (5.4 percent) and Austin-Round Rock, TX (4.9 percent) were the fastest growing (table 2). San Francisco-Oakland-Hayward, CA, was led by strong growth in finance, insurance, real estate, rental, and leasing (7.1 percent), while growth in Austin-Round Rock, TX, was led by professional and business services (8.9 percent). (1)

The largest decline among large metropolitan areas was in Houston-The Woodlands-Sugarland, TX (-3.0 percent), due to a decline in mining (-13.1 percent). The slowest growth occurred in Pittsburgh, PA (0.1 percent), due to a decline in professional and business services (-2.4 percent) that offset growth in other industries.

Medium metropolitan areas. Of the medium metropolitan areas, Provo-Orem, UT (6.1 percent) and San Jose-Sunnyvale-Santa Clara, CA (5.9 percent) were the fastest growing. Services industries such as information services drove growth in Provo-Orem, UT, while professional and business services drove growth in San Jose-Sunnyvale-Santa Clara, CA.

The medium metropolitan areas with the largest declines were Tulsa, OK (-3.3 percent) and Durham-Chapel Hill, NC (-2.7 percent). The decline in Tulsa, OK, was mainly due to a decline in mining (-10.1 percent), while nondurable-goods manufacturing (-15.7 percent) mainly caused the decline in Durham-Chapel Hill, NC.

Small metropolitan areas. Of the small metropolitan areas, Lake Charles, LA (8.1 percent) and Bend-Redmond, OR (8.1 percent) were the fastest growing, and the fastest and second-fastest growing metropolitan areas overall. Growth in Lake Charles, LA, was led by a strong contribution from nondurable-goods manufacturing, and growth in Bend-Redmond, OR, was led by strong growth in finance, insurance, real estate, rental, and leasing (9.1 percent).

The small metropolitan areas with the largest declines were Odessa, TX (-13.3 percent) and Casper, WY (-11.6 percent). The declines in Odessa, TX, and Casper, WY, were mainly due to declines in mining.

Per capita real GDP by metropolitan area

Per capita real GDP for the nation s metropolitan areas was $53,645 in 2016, which is 6.1 percent higher than the national average ($50,577), which includes non-metropolitan areas. (2) The five metropolitan areas with the highest per capita real GDP in 2016 were Midland, TX; San Jose-Sunnyvale-Santa Clara, CA; Bridgeport-Stamford-Norwalk, CT; San Francisco-Oakland-Hay-ward, CA; and Boston-Cambridge-Newton, MA-NH (table 3). Midland, TX, had the highest per capita real GDP at $175,837, which was 247.7 percent higher than the national average; a strong concentration of the mining industry in this area contributed greatly to its per capita real GDP.

The five metropolitan areas with the lowest per capita real GDP in 2016 were Sebring, FL; Lake Havasu City-Kingman, AZ; The Villages, FL; Homosassa Springs, FL; and Punta Gorda, FL. Sebring, FL, had the lowest per capita real GDP in the nation at $17,666, which was 65.1 percent lower than the national average.

Updates

The statistics on GDP by metropolitan area for 2001-2015 that were released in September 2016 have been updated. The updated statistics incorporate the annual updates from GDP by industry (released in November 2016), GDP by state (released in May 2017), and local area personal income (released in November 2016).

Current-dollar statistics. The updates to the current-dollar GDP statistics, measured as a percentage of the previously published statistics, were modest for most metropolitan areas. The mean absolute revision (MAR) was 2.8 percent for 2001-2015. The MARs were 10 percent or less for all metropolitan areas except Tyler, TX, and Midland, TX (table 4).

Real growth rates. The updates to real GDP growth rates are measured as a percentage point difference from the previously published growth rate. The MAR of annual growth rates for metropolitan areas was 1.4 percentage points for 2001-2015. The MAR of annual growth rates was less than 5 percentage points for all metropolitan areas except Midland, TX.

By Jacob R. Hinson, Sharon D. Panek, and Ralph M. Rodriguez

(1.) These growth rates are available on BEA's Web site.

(2.) Per capita real GDP by metropolitan area was computed using Census Bureau midyear population estimates.
Table 1. Real Gross Domestic Product for Selected Industries in the
Metropolitan Portion of the United States

                  2015       2016        Growth   Percent  Contribution
                                         in 2015  change   to percent
                                         to 2016           change
                                                           (percentage
                                                            points)
                   Millions of chained
                     (2009) dollars

Professional
and business
 services         1,960,971  2,013,050   52,079     2.7       0.35
Information         828,894    882,600   53,706     6.5       0.32
Finance,
insurance,
real estate,
 rental, and      3,033,805  3,069,256   35,451     1.2       0.25
leasing
Mining              295,910    268,444  -27,466    -9.3      -0.13
Nondurable-goods
 manufacturing      684,719    683,113   -1,607    -0.2      -0.01

Table 2. Gross Domestic Product (GDP) and Population for Large, Medium,
and Small Metropolitan Areas, 2016
[Ranked by percent change in real GDP]

     Large metropolitan areas (population of more than 2 million)

                                                     Current-
                                                     dollar      Percent
                                        Population   GDP         change
                                                     (millions   in Real
                                                     of          GDP
                                                     dollars)

Fastest growing
San Francisco-Oakland-Hayward,          4,679,166    470,529        5.4
CA
Austin-Round Rock,                      2,056,405    135,010        4.9
TX
Seattle-Tacoma-Bellevue, WA             3,798,902    330,409        4.3
Slowest growing
San Diego-Carlsbad, CA                  3,317,749    215,343        0.3
Pittsburgh, PA                          2,342,299    138,187        0.1
Houston-The Woodlands-Sugar Land, TX    6,772,470    478,618       -3.0

  Medium metropolitan areas (population between 500,000 and 2 million)
                                                     Current-
                                                     dollar      Percent
                                        Population   GDP         change
                                                     (millions   in Real
                                                     of          GDP
                                                     dollars)

Fastest growing
Provo-Orem, UT                            603,309     23,251        6.1
San Jose-Sunnyvale-Santa                1,978,816    252,487        5.9
Clara, CA
Raleigh, NC                             1,302,946     79,843        5.3
Slowest growing
Oxnard-Thousand                           849,738     48,517       -2.7
Oaks-Ventura, CA
Durham-Chapel Hill, NC                    559,535     43,908       -2.7
Tulsa, OK                                 987,201     58,248       -3.3

         Small metropolitan areas (population less than 500,000)
                                                     Current-
                                                     dollar      Percent
                                        Population   GDP         change
                                                     (millions   in Real
                                                     of          GDP
                                                     dollars)

Fastest growing
Lake Charles, LA                          207,483     16,472        8.1
Bend-Redmond, OR                          181,307      9,364        8.1
Brunswick, GA                             116,784      4,114        7.2
Slowest growing
Lafayette, LA                             491,528     20,645      -11.5
Casper, WY                                 81,039      5,859      -11.6
Odessa, TX                                157,462      8,718      -13.3

Table 3. Highest and Lowest Per Capita Real Gross Domestic Product
(GDP) for Selected Metropolitan Areas, 2016

                                   Population   Real         Per
                                                GDP          Capita
                                                (millions    Real
                                                of           GDP
                                                chained
                                                (2009)
                                                dollars)
                                                Highest per capita

Midland, TX                          168,288     29,591      175,837
San Jose-Sunnyvale-Santa           1,978,816    236,855      119,695
Clara, CA
Bridgeport-Stamford-Norwalk,         944,177     88,026       93,231
CT
San Francisco-Oakland-Hayward,     4,679,166    406,294       86,830
CA
Boston-Cambridge-Newton,           4,794,447    371,577       77,502
MA-NH

                                                Lowest per capita

Punta Gorda, FL                      178,465      3,608       20,214
Homosassa Springs,                   143,621      2,654       18,477
FL
The Villages, FL                     123,996      2,282       18,406
Lake Havasu City-Kingman,            205,249      3,726       18,153
AZ
Sebring, FL                          100,917      1,783       17,666

Table 4. Metropolitan Areas With the Five Largest Mean Absolute
Revisions (MARs) in Current-Dollar and Real Gross Domestic Product (GDP)

Rank                      Current-dollar
                          GDP
                          MAR
                          (percent)

1       Midland, TX        45.8
2       Tyler, TX          21.4
3       Dalton, GA         10.0
4       Laredo, TX          9.9
5       Casper, WY          8.9

Rank                               Real GDP
                                   growth
                                   MAR
                                   points)
                                   (percentage

1     Midland, TX                   9.5
2     Punta Gorda, FL               4.8
3     Crestview--rt Walton
      Beach-Destin, FL              4.7
4     Carson City, NV               4.6
5     Casper, WY                    4.1
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Author:Hinson, Jacob R.; Panek, Sharon D.; Rodriguez, Ralph M.
Publication:Survey of Current Business
Date:Oct 1, 2017
Words:2032
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