North Carolina’s Gross Domestic Product

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There has been a lot of discussion about the recession, unemployment, taxes, spending, and debt.  While all of these things are important when discussing fiscal policy, there is one measure that is considered by some to be the most important indicator used to gauge the health of our economy — the gross domestic product or GDP.  This measure represents the total dollar value of all goods and services produced over a specific time period in a certain area.  Many consider it the size of an economy, and it is used when comparing countries, states, or even cities in economic terms.

The most common way of hearing about GDP is in terms of a percentage change from the previous year.  For example, the news will report, "the economy has grown by 3 percent over the last year."  What they are really saying is that GDP is up 3 percent from the same time last year.  Below is a map of the Southeast showing the percent change in real GDP (GDP adjusted for inflation) by state from 2011 to 2012.  North Carolina grew 2.7 percent, which was more than the Southeast region’s average.

For North Carolina, the total expenditures in specific industries tell us what the state’s GDP is over the course of one year.  This is calculated by adding total consumption, investment, government spending, and net exports.  North Carolina’s economy has grown since the recession, and the state has multiple cities that have a strong impact on the state’s economy.  See the list below to see the top industries and the amount of GDP produced in each area of the state for 2012.

This list tells an interesting story about our state.  Even with the passage of CAFTA in the early 2000s hurting the Hickory region’s textile industry, the area is still highly focused on manufacturing and trade.  Charlotte became one of the largest banking cities in the nation in the latter half of the 20^th Century, and now they have the highest GDP of any metropolitan area in the state.  Other areas have a high impact from government, such as Fayetteville with Fort Bragg Army Base and Jacksonville with Camp Lejeune Marine Corps Base.  Raleigh and Durham/Chapel Hill reflect the impact of the Research Triangle Park and the investment that has come from those businesses.

Knowing the state’s GDP is a very valuable tool when debating fiscal policy.  Each elected representative comes from a particular area and wants to protect the industries that support that region’s GDP.  So naturally legislators from the western counties will have different ideas about trade, textiles, and manufacturing than legislators from the piedmont and the east whose focus is more on military bases and financial activities. 

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