Archive for Wednesday, September 14, 2011

Lawrence economy grew at exceptionally slow rate in 2010, according to recent analysis

September 14, 2011

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Somebody forgot to tell us to bounce.

There are new numbers out that show while the economies of many cities across the country were experiencing a bounce-back year in 2010, Lawrence’s did not.

In fact by one measure, Lawrence’s overall economy grew by one of the slowest rates in the entire country in 2010, according to new numbers from the Bureau of Economic Analysis.

Here’s what we’re talking about: The Bureau of Economic Analysis each year measures the Gross Domestic Product of every metro area in the country. That’s just a fancy way of saying they measure the market value of all the goods and services produced in a metro area.

In 2010, Lawrence’s GDP grew by 0.1 percent. That ranked Lawrence 300th out of 366 metro areas in the country.

What does it all mean? Well, it depends. There are certainly other measures of an economy, like the unemployment rate and per capita income, that probably affect residents more on a daily basis. But government number-crunchers do tout GDP as the broadest measure of an economy. So, if nothing else, the numbers provide a big, wide snapshot of Lawrence’s economy. Here’s a look:

• We were slow in 2010. Lawrence’s GDP grew by 0.1 percent for the year. The average growth rate for metro areas in 2010 was 2.5 percent.

• We’re still small. Lawrence had a GDP of $3.75 billion in 2010. That ranked us 326 out of 366 metro areas. Here’s how we compared with some other metro areas nearby: Topeka, $9.3 billion (189th); Wichita, $26.2 billion (84th); Kansas City, $105.9 billion (26th); Manhattan, $5.9 billion (240th).

• 2010 was rough in several areas. Of the 13 sectors of the Lawrence economy that were measured, eight of them showed declines for the year. They were natural resources and mining; nondurable goods manufacturing, transportation and utilities; financial activities; professional and business services; education and health services; leisure services; and the category of other services.

•Three areas bucked the trend in 2010. Trade, as in wholesale and retail trade, was the top growth area for the economy. The information sector and the government sector also grew some. Surprisingly, the numbers show construction, which includes activities other than just home construction, held about steady.

• We’re still a government town. All that work that gets done up at Kansas University gets put in the government category, so no surprise that it leads the way in Lawrence. Here are largest parts of the Lawrence economy, by percentage:

  1. Federal, state and local government: 25.5 percent

  2. Real estate and leasing: 15.5 percent

  3. Manufacturing: 9.6 percent

  4. Retail trade: 7.9 percent

  5. Professional, scientific and technical services: 6.2 percent

  6. Information services: 5.7 percent

  7. Health care and social assistance: 5.1 percent

  8. Other services: 3.9 percent

  9. Finance and insurance: 3.7 percent

  10. Accommodation and food services: 3.5 percent

• We were slower than our neighbors in 2010. Here’s how our growth rate stacks up against some area cities and others that have Big 12 ties (which is getting tougher to determine, by the way).

  1. Austin, Texas: 7 percent

  2. Manhattan: 5.3 percent

  3. Waco, Texas: 4.2 percent

  4. Boulder, Colo: 4 percent

  5. Columbia, Mo.: 3.4 percent

  6. Fort Collins, Colo.: 2.9 percent

  7. Lubbock, Texas: 2.2 percent

  8. College Station, Texas: 2.2 percent

  9. Joplin, Mo.: 2 percent

  10. Oklahoma City: 1.7 percent

  11. Kansas City (Mo. and Kan.): 1.5 percent

  12. Topeka: 1.4 percent

  13. St. Joseph, Mo.: 1.2 percent

  14. Lincoln, Neb.: 1.2 percent

  15. Ames, Iowa: 0.4 percent

  16. Omaha, Neb.: 0.4 percent

  17. Springfield, Mo.: 0.4 percent

  18. Lawrence: 0.1 percent

  19. Wichita: Negative 0.4 percent

  20. Tulsa, Okla.: Negative 0.6 percent

• The longer you look, the better we look. This point is probably important. GDP numbers can fluctuate a lot in one year. It is just the nature of the economy. When you look at Lawrence’s GDP growth rate over three years, it fares quite a bit better. It has grown, on average, 1 percent per year over the last three years. That’s far better than the national average, which was negative 0.1 for the three year period. It also is better than the three-year growth rate for most of the regional cities. Lawrence’s three-year growth rate ranks ninth out of the 20 regional cities above. Only Austin, Columbia, College Station, Iowa City, Manhattan, Lubbock, Oklahoma City and Waco had higher growth rates than Lawrence.

Comments

Scott Drummond 3 years, 11 months ago

Quite a non-story once you've read the last paragraph. Wonder if the headline should not be something like "Republican government cuts harm Lawrence economy."

BruceWayne 3 years, 11 months ago

Thank god Compton is going to save our town!

just_another_bozo_on_this_bus 3 years, 11 months ago

I'll bet dollars to donuts that the vast majority of Manhattan's growth is due to government spending. I wonder if that's true for many if not most of the cities with significant growth.

Chad Lawhorn 3 years, 11 months ago

If you would have made that bet, you would have gotten perhaps both donuts and dollars. Manhattan's GDP grew by 5.3 percent. Of that amount, 4.39 percent came from the government sector. Manhattan, though, also saw some increases in construction 1.05 percent, financial services 0.3 percent and leisure and hospitality 0.1 percent. Chad Lawhorn Journal-World

just_another_bozo_on_this_bus 3 years, 11 months ago

Thanks for the info.

But I would also bet that the increases in construction, financial services and hospitality are in large part a response a spinoff of the increased government money.

Jeff Barclay 3 years, 11 months ago

Let's be honest here. Liberally oriented communities, such as Lawrence, do not understand or appreciate that economic growth can only come from the private sector. Like it or not government "investment" can not grow an economy. If our community is going to "bounce back" Lawrence's leadership mindset must change. Any visitor scanning the LJW on any given day could find an anti-business, anti-local investment, anti-local development news article. Lawrence's lack of a bounce back is the result of misplaced fears and a false understanding of capitalism, Private economic growth is the only door to a community's economic stability. Take a look at KU's Endowment. Where do their $ come from. The success of private enterprises! Look at the direction Lawrence's school system is moving toward- they are realizing the private sector can help them recover some of the dollars they can no longer expect from the Feds and the state. No one, government (education, infrastructure, etc.) or individuals can have more money until someone has first made some money. Lawrence needs more money, but our socialist mindset is resisting the very means necessary that could bring investment and growth.

chootspa 3 years, 11 months ago

Correct. Teachers, firefighters, policemen, and garbage collectors do not spend money, and the money they don't spend does not stimulate private business owners to hire people to meet the demand they obviously don't create. Also private businesses never ever borrow money in order to grow their business, so it's completely wrong of governments to ever do the same. Lawrence's lack of a bounce couldn't possibly be due to that last paragraph in the story, and it couldn't have anything to do with government cost cutting measures for KU, because we all know governments don't make jobs, so cutting all their spending shouldn't at all hurt the economy. Thanks so much for clarifying all of that for us.

chootspa 3 years, 11 months ago

Absolutely. "Government people" do not work, nor do they pay taxes, and they certainly don't ever spend any of that money. Why, when a "government people" comes into my store, I tell him to get right back out. He can't have any of my safety inspected food prepared with clean purified water. What does that soldier think he's doing here? As if he did something brave other than stealing my hard earned taxpayer money!

just_another_bozo_on_this_bus 3 years, 11 months ago

"Let's be honest here."

You aren't being honest-- you're spouting pure ideological nonsense that flies in the face of any sort of logic, basic economics or common sense.

Governments do, in fact, create jobs. Millions of them, as a matter of fact. And the wages and salaries of government employees are spent in the economy exactly the same way that wages and salaries of private sector employees are.

thepianoman 3 years, 11 months ago

BINGO. Socialist mindset is correct Barclay. That's the mindset these days. Bigger government, more of these silly @ss stimuls packages that only provide a short-term solution..Then we're right back where we started...

Reduce the government, focus on private sector job growth...Etc..UGHH. Don't get me started.....

Scott Drummond 3 years, 11 months ago

Speaking of short-term views....

"The longer you look, the better we look. This point is probably important. GDP numbers can fluctuate a lot in one year. It is just the nature of the economy. When you look at Lawrence’s GDP growth rate over three years, it fares quite a bit better. It has grown, on average, 1 percent per year over the last three years. That’s far better than the national average, which was negative 0.1 for the three year period. It also is better than the three-year growth rate for most of the regional cities. Lawrence’s three-year growth rate ranks ninth out of the 20 regional cities above."

Kontum1972 3 years, 11 months ago

and then there is BP/Halliburton etc....and oil spill and Dick Cheney...where is the money to stimulate the economy down south...?

I bet all the BP exec's are gettin their bonuses

this stuff is not socialism...its called pure GREED

how is it these guys are not behind bars....with a number stenciled across their backs...Bernie Madoff is in jail....wheres his company?

jamoca 3 years, 11 months ago

Lawrence got what it asked for. The "hope" is gone, and the change definitely arrived!

JustNoticed 3 years, 11 months ago

Yeah, let's be honest here. It's all the hippies' fault. You know, the stinking, pot-smoking, panhandling hippies that are running and ruining Lawrence. The "small, vocal minority" Mr. Simons likes to rail about. Hippies did it. Hippies ruined America. Hippies, hippies, hippies (or liberals if you prefer); hippies should all be rounded up and imprisoned on a work farm or something so they can provide some actual service. Yeah, that's right, a "farm" with high, razor wire topped walls, armed guards watching just in case two or three of them try to congregate and pass some environmental regulation or something.

nytemayr 3 years, 11 months ago

2010 was a tough year in Lawrence. Construction "SUCKED!!!""" Job growth......"SUCKED!!!"

I do believe property and sales taxes are high compared to the wage earning base in Douglas County but then We voted for those taxes and they are what they are!

JOBS we need JOBS that pay $50,000 to $80,000 per year. about 1,000 of these jobs will do it!

chicago95 3 years, 11 months ago

Good reporting. Why does the LJW not provide links to primary sources? Find it here: http://www.bea.gov/newsreleases/regional/gdp_metro/2011b/gdp_metro0211b.htm .

Also not mentioned above: the Bureau of Economic Analysis is an agency of the U.S Dept. of Commerce. These details allow readers to independently evaluate the veracity of sources.

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