Gross Domestic Product
Gross domestic product (GDP) is the value added in production by labor and capital. It is the most comprehensive measure of economic activity.
GDP for the nation, states and metro areas are produced in both current dollars and inflation-adjusted (real) dollars. The inflation adjustment is unique to each geographic area. GDP is released quarterly for the nation but only annual data are available by state and metropolitan area. Though estimates of current dollar GDP by state go back to 1963, inflation-adjusted data are available only back to 1987. Gross domestic product data are available by metropolitan area only since 2001; county data are not available.
The inflation-adjusted percent change in GDP is presented on Arizona Indicators. The percent changes begin in 1988 for the United States and Arizona and in 2002 for the metropolitan areas.
U. S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/regional/index.htm. Estimates are released annually, with the figures for the preceding calendar year labeled as “advance” (preliminary) and only available by sector. Estimates for prior years are revised and available by sector and subsector. State estimates are released in June; metro area estimates are released in September.
The GDP estimates for the latest year are labeled as “advanced” — an abbreviated set of mostly preliminary data and a simplified methodology are used to generate these estimates. Even after the estimates are revised, some of the inputs to the calculation of GDP by state and especially by metropolitan area are estimated.
Two estimates of GDP by state exist for 1997: one based on the Standard Industrial Classification (SIC) and the other by the new North American Industry Classification System (NAICS). The 1997 estimate by NAICS should not be compared to the 1996 estimate by SIC, nor should the 1998 estimate by NAICS be compared to the 1997 estimate by SIC.
Gross Domestic Product in Arizona and the United States, Inflation-Adjusted Percent Change
Visualization Notes:
A healthy economy exists when inflation-adjusted gains in GDP are at least 2-to-3 percent per year. During the 1991-to-2001 economic cycle, the annual average inflation-adjusted growth rate was 7.2 percent in Arizona and 3.7 percent nationally. However, during the 2001-to-2009 economic cycle, the annual average inflation-adjusted growth rate was only 2.1 percent in Arizona and 1.5 percent nationally. Since 2009, the average has been only 1.4 percent in Arizona and 1.9 percent nationally.
Within an economic cycle, the annual change in GDP is highly variable, exceeding the target during economic expansions and falling short during recessions. Historically during expansions, Arizona’s GDP growth was much higher than the target and the national average due to the state’s much more rapid population growth, but in recent years the gains in Arizona have been less than the national average.
During recessions — as in 2008 and 2009 — Arizona’s economic performance is inferior to the national average. Arizona underperformed the nation again in 2010, as the economy began to recover from the recession. In both 2011 and 2012, Arizona’s gain in real GDP was similar to the national average, but the increases in Arizona in 2013 and 2014 were less than the U.S. average. In four of the last five years, the gains nationally have been around 2 percent, at the lower end of the target range. In contrast, Arizona’s gain was less than 2 percent in four of the five years.
Gross Domestic Product, Inflation-Adjusted Percent Change
Visualization Notes:
Annual average inflation-adjusted GDP growth between 2004 and 2013, representing a complete economic cycle, was 1.3 percent in the nation’s metro areas, falling short of the target of 2-to-3 percent. In two of Arizona’s seven metro areas — Flagstaff and Phoenix — real GDP growth slightly exceeded the U.S. metro average; gains in the Sierra Vista area nearly were average.
Since the end of the 2008-09 recession, the U.S. metro average experienced a real GDP increase of 8.2 percent over four years. The four-year gain in the Phoenix area was 9.5 percent; increases were smaller in Flagstaff and Tucson. In the other four metro areas, real GDP in 2013 was less than in 2009; Yuma experienced a decreases in each of the four years and Lake Havasu City suffered a decline in each of the last six years.
Data Source
U. S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/regional/index.htm. Estimates are released annually, with the figures for the preceding calendar year labeled as “advance” (preliminary) and only available by sector. Estimates for prior years are revised and available by sector and subsector. State estimates are released in June; metro area estimates are released in September.
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