Last week the Bureau of Economic Analysis released the 2014 Gross Domestic Product (GDP) figures for Metropolitan Statistical Areas (MSAs). GDP is the value of all the goods and services produced in a certain area. The Mankato-North Mankato MSA, comprised of Blue Earth and Nicollet Counties, 2014 GDP was $4,570,000.
So what does that mean? Well, to look at it from a historical context you need to eliminate the inflation factor of the U.S. dollar. So we use a term called “Real GDP” which uses the value of a dollar from 2009. The 2014 Mankato-North Mankato MSA’s Real GDP is $4,094,000 (in 2009 dollars). It grew .343% from 2013. Not an overwhelming statistic. However, since 2010, our GDP has grown 4.9% which is the second highest among all MN MSAs (St. Cloud, Duluth, Rochester, Minneapolis-St. Paul).
Speaking of comparison to other MSAs, there is a great metric for that as well. It’s called “Per Capita Real GDP.” It factors in the size of the metropolitan area by dividing the Real GDP by the total population. The Mankato-North Mankato MSA had a Per Capita Real GDP level of $41,575. Comparing our MSA to the other 381 MSAs around the country on a per capita basis we rank in the top half at #163. This puts Mankato-North Mankato ahead of Duluth (203rd) and Saint Cloud (168th) and behind Rochester (118th) and Minneapolis-Saint Paul (23rd).
As an MSA grows in population, opportunities to be home to a large company also increases. So, if an MSA has a large population, they have a higher likelihood of having a Fortune 500 company headquarters. For example, large MSAs (having a population more than 250,000) comprise 69 out of the 100 MSAs with the highest Per Capita GDP. For this reason it is appropriate to look at MSAs of similar size to the Mankato-North Mankato MSA. Out of the 191 “small” Metropolitan Statistical Areas (population under 250,000) Mankato-North Mankato ranked 60th (top 30%). This is a testament to the productivity of our workforce. Our labor force is more productive than 70% of comparable metros.
And our productivity is increasing. While our GDP increased by .343%, our Per Capita GDP increased by .437%. We are the only Minnesota MSA that can say our productivity is increasing faster than our economy. In the long-run, this is a much better path to be on, rather than growth spurred by more inputs or resources. It’s often referred to as “intensive growth.” The better kind of growth. You can google for articles on “Intensive” or “Extensive” growth that provide more detail.