Posts tagged with Economy Size

New report shows Lawrence’s economic growth is tops in Kansas and Missouri

I know when I’m on the treadmill it is sometimes hard for me to tell when I’ve caught my second wind. (Sometimes I have problems hearing the beeping of the defibrillator.) But there is a new set of numbers that is making it clearer that Lawrence’s economy is catching its second wind.

After years of being a laggard, Lawrence’s economy had the best growth rate of any metro area in Kansas or Missouri last year, according to a new government report.

The U.S. Bureau of Economic Analysis released its annual estimate of gross domestic product for each metro area in the country. GDP is just a fancy way of saying the government measures the total value of everything produced in a metro area. It generally is regarded as the best way of measuring the size of a community’s economy.

The report showed Lawrence still doesn’t have a very large economy compared to most metro areas, but it has been growing at an above average pace.

The 800 block of Massachusetts Street is pictured on Nov. 17, 2015.

The 800 block of Massachusetts Street is pictured on Nov. 17, 2015. by Mike Yoder

Lawrence's GDP grew by 2.4 percent compared to the average metro growth rate of 1.7 percent. The 2016 numbers were in addition to a strong showing in 2015. That year, Lawrence’s GDP grew by 3.6 percent compared to a metro average of 2.9 percent. That’s good news because the prior three years had been pretty lackluster. In 2014, Lawrence’s economy grew by 0.4 percent compared to a national average of 2.3 percent. In 2013, 0.5 percent for Lawrence compared to 1.5 percent for the national average. In 2012, Lawrence’s economy shrank by 2.6 percent compared to 2.2 percent growth for the average metro.

While Lawrence’s growth rate wasn’t near the tops for the country — Bend, Ore. and Lake Charles, La. both grew by 8.1 percent — it was tops for any metro area in Kansas or Missouri. Here’s a look, with the total size of the metro’s economy and its 2016 growth rate:

— Lawrence: $3.88 billion; up 2.4 percent

— Topeka: $9.145 billion, up 2.2 percent

— Jefferson City, Mo.: $6.55 billion, up 2.2 percent

— Columbia, Mo.: $7.8 billion, up 1.7 percent

— Springfield, Mo.: $16.31 billion, up 1.1 percent

— Kansas City: $114.37 billion, up 1.0 percent

— St. Louis: $140.71 billion, up 0.8 percent

— Manhattan: $3.11 billion, up 0.5 percent

— Joplin, Mo.: $6.46 billion, up 0.1 percent

— Cape Girardeau, Mo.: $3.68 billion, down 0.1 percent

— Wichita: $28.59 billion, down 1.4 percent

— St. Joseph, Mo.: $4.64 billion, down 1.6 percent

As far as what has caused Lawrence’s economy to grow at a good rate, 2015 and 2016 both were excellent years for new construction in Lawrence. The report shows the construction industry did add to Lawrence’s growth, but not as much as you may think. Of the 2.4 percent growth in the Lawrence economy, construction accounted for 0.18 percentage points. Higher up the list was durable goods manufacturing. That could be items like the garage doors made at the Amarr plant, for example. Durable goods added 0.39 percentage points. Non-durable goods, which could be the dog food made at the Big Heart plant, added 0.25 percentage points. The greeting cards made at Hallmark fit into one of those two categories, I believe, but I’m not sure whether a greeting card is durable or non-durable. (The ones that come from me mainly are just categorized as late and illegible.)

Education and health care added 0.32 percentage points. Professional and business services added 0.34 percentage points.

But the industry that added the most to the Lawrence economy in 2016 — by far — was the trade industry. It added 1.14 percentage points to Lawrence’s growth rate. In other words, almost half of all of Lawrence’s growth in 2016 was attributable to greater trade in the community. The category includes both retail and wholesale trade. The last couple of years have been good on that front, as the monthly sales tax reports out of City Hall have shown. Whether it be the addition of new retailers like Dick's Sporting Goods and Menards or whether it be new visitors to town via Rock Chalk Park or whether it be some factor we haven’t yet figured out, this report is another sign that something positive is happening in Lawrence’s retail sector. (By the way, all these numbers are adjusted for inflation, so it is not just that prices are going up.) Numbers like that one are probably a reason why there are a fair number of retailers interested in locating in Lawrence.

The other interesting part about this report is it serves as a reminder of just how small Lawrence really is. Lawrence sometimes believes the size of the world is somehow commensurate to the size of a basketball, which causes us to think we are a bit bigger than we are in actuality.

When you look at some of the numbers above, it reminds you that Lawrence’s economy is not very big by metro standards. Part of that is because Lawrence’s metro area is comprised of just one county, where other metros have multiple counties. But the reason our metro area is only one county is because that is about as far as Lawrence’s economic influence stretches.

There are several communities that stand out on that list. Joplin, Mo. has an economy that is almost 70 percent larger than Lawrence’s. Columbia, Mo. has an economy that is more than twice the size of Lawrence’s. I know what you are thinking, Columbia is much more isolated than Lawrence. It is true that isolation allows it to be more of a regional center than Lawrence. However, St. Joseph, which basically is in the shadow of Kansas City, has an economy that is about 20 percent larger than Lawrence’s.

Of course, Lawrence leaders may not want the town to be much bigger than it is today. I’ve long thought, though, that the GDP numbers give us a good way to make some comparisons, and perhaps, set some goals for what type and size of economy we would like to have.

In case you are interested, here are some numbers from some other communities in the region or other large university communities:

— Ames, Iowa: $4.35 billion, up 1.3 percent

— Bloomington, Ind.: $6.02 billion, up 2 percent

— Boulder, Colo.: $21.67 billion, up 1.6 percent

— Grand Junction, Colo.: $4.58 billion, down 3.5 percent

— Fort Collins, Colo.: $14.18 billion, up 3.8 percent

— Iowa City: $8.66 billion, up 0.7 percent

— Lubbock, Texas: $11.85 billion, 2.6 percent

— Morgantown, W. Va.: $6.69 billion, up 0.7 percent

— Provo, Utah: $20.49 billion, up 6.1 percent

— State College, Penn.: $7.9 billion, down 0.2 percent

— Waco, Texas: $10.58 billion, up 3.9 percent

Reply 2 comments from Matt Beat Mark Kostner

New federal report shows Lawrence economy stagnant in 2015, smaller than many in the region

If I thought we wouldn’t get an eye poked out by obnoxious football fans wearing those pointy Cornhusker hats, I would suggest we all take a trip to Grand Island, Neb. There’s a new report out that suggests Lawrence and Grand Island may be more alike than we think.

Federal officials have released a new report that measures the economy of every metro area in the country. Lawrence’s economy is the 342nd largest economy in the U.S. — one spot and a few dollars ahead of Grand Island, Neb. Unless trends change, Lawrence likely won’t be moving up the list anytime soon. The report found the Lawrence economy was stagnant in 2015.

The report is the Bureau of Economic Analysis’ annual look at the gross domestic product of metro areas. Gross Domestic Product — or GDP — is kind of the big enchilada in the world of economic statistics. It is the broadest measure of the economy. It attempts to measure all the economic activity in a community. In Lawrence that means everything from what Hallmark spends to produce greeting cards at its local production plant to what students spend to keep themselves properly hydrated and full of ramen noodles.

Let’s take a look at some of the findings of the report.

• Small scale: The report always serves as a good reminder that Lawrence isn’t as large as we sometimes think. The Lawrence economy checked in at $4.06 billion dollars, which is quite a lot of hydration, if you know what I mean. But Lawrence has a smaller economy than many communities, including some you may not guess. For instance, would you have thought that Joplin, Mo., has an economy that is almost $3 billion larger than Lawrence’s? It does. Here’s a look at some regional communities and their national rankings:

— Kansas City, Mo.-Kan: $125.6 billion (No. 29)

— Wichita: $31.4 billion (No. 81)

— Boulder, Colo.: $23.4 billion (No. 105)

— Topeka: $9.8 billion (No. 200)

— Iowa City: $9.4 billion (No. 204)

— Columbia, Mo.: $8.3 billion (No. 218)

— Joplin, Mo.: $6.7 billion (No. 247)

— St. Joseph, Mo.: $5.7 billion (No. 283)

— Ames, Iowa: $4.9 billion (No. 311)

— Lawrence: $4.06 billion (No. 342)

— Manhattan: $3.3 billion (No. 367)

Communities grow in lots of different ways, and that brings us back to Grand Island, Neb. Grand Island doesn’t have a major university, isn’t located along one of the larger interstates in the country, and is not right next door to a major metro area. But Lawrence and Grand Island have essentially the same size of economies. The size of Lawrence’s economy is what it is. The question — and one that often doesn’t draw a consensus — is whether it is the size it ought to be? Arguments could be made both ways.

• Holding steady: The report estimated Lawrence’s GDP grew at a rate of 0.0 percent. The report provided details that some areas of Lawrence’s economy grew, but others declined. In the end, they canceled each other out. Lawrence’s growth rate is near the bottom of those posted by regional communities. But there is a familiar refrain we can repeat: At least we are not Topeka. The report shows our neighbor to the west is hurting.

— Boulder: up 3.6 percent

— Manhattan: up 2.4 percent

— Ames, Iowa: up 1.6 percent

— Kansas City: up 1.5 percent

— Wichita: up 1.3 percent

— Columbia, Mo.: up 1.2 percent

— Iowa City: up 0.3 percent

— Lawrence: 0.0 percent

— St. Joseph: down 0.7 percent

— Joplin: down 0.2 percent

— Topeka: down 3.5 percent

• The longer view: The report provides data back to 2010. Lawrence’s economy has grown some since 2010, which isn’t the case for every community. But Lawrence still is in the bottom half of the list. There’s also a refrain we could say based on these number — although as loyal Jayhawk fans we might need to keep our head in a wastebasket while uttering it: I wish we could be Columbia. Iowa City’s numbers are also noteworthy, given that Lawrence’s current city manager previously led that community. Here’s a look at GDP growth totals — adjusted for inflation — since 2010:

— Iowa City: up 13.8 percent

— Columbia: up 10.3 percent

— Kansas City: up 6.1 percent

— St. Joseph: up 4.3 percent

— Manhattan: up 3.5 percent

— Wichita: up 3.1 percent

— Lawrence: up 2.1 percent

— Boulder: up 1.7 percent

— Joplin: down 0.9 percent

— Topeka: down 2.9 percent

— Ames: down 3.3 percent

One item to note is that Lawrence’s growth trend is heading in the wrong direction. Lawrence’s GDP posted a 1.2 percent gain in 2011, but the growth rate has slowed every year thereafter: 0.7 percent in 2012; 0.2 percent in 2013; 0.1 percent in 2014; 0.0 percent in 2015.

• Winners and losers: The reports shows which areas of the Lawrence economy grew and which ones declined. The biggest loser in Lawrence was the government sector, which is the largest sector of Lawrence’s economy. Losses in the government sector caused Lawrence’s GDP to decline by 0.34 percentage points. The finance and real estate sector also showed a decline, resulting in a 0.22 percentage point decline in GDP. The information sector posted the largest increase, causing GDP to grow by 0.28 percentage points. The wholesale and retail trade industries also caused GDP to grow by 0.24 percentage points.

I wish I was smart enough to know which businesses in Lawrence contributed to each of those industries. But I don’t, so I’m not sure what to make of those numbers. And I don’t have time to figure it out. After this column, I’ll spend all my time answering mail from Topeka, Columbia and Grand Island. All remarks about those communities are made in jest, although the pointy Cornhusker hats do make me nervous.

You can read the full BEA report here.

Reply 2 comments from Paul Silkiner Ralph Gage Tc2587