Johnson Price Sprinkle PA (JPS) provides insight into Asheville metro’s economic size and growth. How big is the Asheville metro economy? Is it growing?
How do you measure the size of an economy? You could count the resident population, the number of employed persons or the total income. However, the most accurate way is to measure the total value of all goods and services produced; the Gross Domestic Product (GDP). The U.S. Bureau of Economic Analysis (BEA) recently released the 2015 GDP totals for all of the nation’s 382 metropolitan economies. The BEA is the same agency that calculates the nation’s GDP and tracks global trade.
According to the BEA, the four-county Asheville metro (Buncombe, Henderson, Haywood and Madison counties) had a total GDP of $16.9 billion in 2015. This places Asheville’s economy 139th among all 382 U.S. metros. In North Carolina, Asheville metro is the seventh largest economy among the state’s 15 metros (see chart below).
2015 Gross Domestic Product ($billions)
North Carolina Metros
Source: U.S. Bureau of Economic Analysis
As can be seen, there is a wide disparity between the economic sizes of the state’s metro areas. For example, the GDP of the Charlotte-Concord-Gastonia metro is larger than the GDP sum of the state’s eleven smallest metros. Or put another way, it would take about nine economies the size of Asheville’s to equal the Charlotte-Concord-Gastonia metro.
So, is the Asheville metro economy growing? There are two ways to measure the rate of economic growth. One way is to simply measure the change in the dollar value of GDP from one year to the next. However, this misses the impact of inflation on the prices of the goods and services that go into GDP. And because each metro has its own unique combination of produced goods and services, the inflationary impacts will be different for each. Fortunately the BEA also offers an inflation-adjusted GDP figure which removes the role of inflation. The second, and more accurate, way to measure the rate of economic growth then is to measure the change in GDP after correcting for inflation. The BEA does this by publishing GDP in constant dollar values; the inflation impacts removed. This offers a way to gauge how much economic activity actually changed, without worrying about the change in the underlying prices.
Per the BEA, before removing the impacts of inflation, Asheville metro’s economy grew by $1.1 billion between 2014 and 2015; up 6.9 percent. This places Asheville 17th among all 382 metros in the nation and in the top five percent for its growth rate. After removing inflation, the one-year change equaled $0.6 billion; up 4.0 percent. The inflation adjusted metro GDP numbers put Asheville 52nd among all 382 metros; still firmly in the top 20 percent.
Compared to the state’s other fourteen metros, Asheville’s 2014 to 2015 percentage change in GDP, both unadjusted and adjusted for inflation, place it fourth for one-year GDP growth (see chart below). Interestingly, after adjusting for the impact of inflation, four of the state’s metros actually experienced a decline in total GDP.
2014 to 2015
Percent Change in Gross Domestic Product
North Carolina Metros
Source: U.S. Bureau of Economic Analysis, 2009 constant dollars
So how big is Asheville metro’s economy? In GDP terms at $16.9 billion, Asheville is a mid-sized economy. Its ranking of 139th put it in the top one-half, but not quite in the top third of metros nationwide. Similarly, the seventh place rank statewide places it near the mid-point among all North Carolina metros.
Is it growing? Between 2014 and 2015, Asheville metro experienced relatively strong growth in GDP. Before adjusting for inflation, Asheville’s economy increased by 6.9 percent, placing it in the top five percent nationwide. After inflationary adjustment, its 4.0 percent increase moved the metro to 52nd place, still in the top 20 percent. Statewide, Asheville generated a solid fourth place rank for its GDP growth rate.
For Printer-Friendly version, click here.
Contact JPS to confidently guide you through your business growth.
Asheville Boone Marion
828-254-2374 828-262-0997 828-652-7044