31 counties account for a third of U.S. economy
L.A. County has the No. 1 GDP. Will rural areas be left behind as growth shifts to large cities and the coasts?
While the nation’s economy has grown for more than a decade, that growth is increasingly concentrated in 1% of the nation’s counties.
Just 31 counties, or the top 1%, account for 32.3% of U.S. gross domestic product in 2018, according to data released this month by the Bureau of Economic Analysis that included nearly 20 years of county-level GDP data.
That’s despite these counties having only 26.1% of employed Americans and 21.9% of the population last year.
Their combined GDP share is also up from a recession low of 30.1% in 2009.
The nation’s economy is becoming increasingly concentrated in large cities and by the coasts — and less so in rural counties — spurring the question of whether rural areas will be increasingly left behind.
The growing concentration of the country’s economic activity could affect a variety of things, including infrastructure spending and labor mobility, but it’s unclear how rural areas will fare as their share of economic output continues to dwindle.
Looking at the largest counties by output, Los Angeles County, which has a GDP equivalent to that of Saudi Arabia, added $395.2 billion to total U.S. GDP from 2001 to 2018. New York County, home to Manhattan, added $340 billion.
The top 1% of counties were spread across 16 states and the District of Columbia, and populous states such as California, Florida and Texas each had multiple counties make the cut. But all 31 counties either included or were near major U.S. cities.
A large population and workforce is only part of the story.
Last year, these counties represented $1.3 trillion more of nationwide GDP than the share of workers alone would account for.
Looking at population, their combined share of GDP rose even as their share of overall population fell. The difference may stem from other aspects of a city, such as clusters of activity or networks, that improve productivity.
The data also highlight differences in industry concentration. The information sector — dominated by West Coast tech giants such as Apple Inc., Alphabet Inc.’s Google and Amazon.com Inc. — is particularly consolidated, with nearly three-fifths of its output squeezed into just a few dozen counties.
Santa Clara County, in the heart of California’s Silicon Valley, had the second-largest GDP in the state, $316.5 billion, and the fastest-growing GDP of any large county in the U.S., up 10.2% over 2017.
California had the largest GDP of any state, $2.7 trillion, up 4% from 2017.
Finance and the arts are also highly concentrated. Although the New York City region still dominates national finance, Manhattan’s grip on the industry has eased since 2014. Los Angeles has held the top spot in the arts and entertainment space from 2001 to 2018, but New York has increased its share from 4.6% to 7.2% over the period.
Still, most industries didn’t see that level of consolidation. Some businesses that need to be close to consumers — including logistics, hospitality and retail — are less concentrated.
Meanwhile, some industries are decentralizing. Transportation and warehousing has become less concentrated since its peak in 2017, while agriculture, forestry, fishing and hunting, a sector that was already relatively dispersed, continued in that direction.
