The national picture
Real gross domestic product for U.S. metropolitan areas grew 1.7 percent in 2016. Nationally, professional and business services (2.7 percent), information services (6.5 percent), and finance, insurance, real estate, rental and leasing (1.2 percent) led metropolitan growth. Natural resources and mining declined nationally 5.3 percent.
Smaller metropolitan areas took the top and bottom spots nationally. Bend-Redmond, Oregon, and Lake Charles, Louisiana, both had real GDP growth of 8.1 percent in 2016. The Oregon city was buoyed by finance, insurance, real estate, rental and leasing. Lake Charles did well through nondurable goods manufacturing. Natural resources and mining dragged Odessa, Texas, and Casper, Wyoming, to the bottom at -13.3 percent and -11.6 percent, respectively.
The best-performing real GDPs for large metro areas with populations of 2 million or more were San Francisco-Oakland-Hayward, California, (5.4 percent) and Austin-Round Rock, Texas (4.9 percent). Finance, insurance, real estate, rental and leasing led San Francisco's growth; professional and business services led Austin's. The only large metro area to shrink was Houston-The Woodlands-Sugarland, Texas, at -3.0 percent. Like Odessa and Casper, Houston experienced a decline in natural resources and mining.
Fort Wayne ranked 223rd among more than 380 metropolitan areas for growth in gross domestic product last year; Elkhart-Goshen ranked sixth. The rates for Indiana metropolitan areas:
U.S.: 1.7 percent
Columbus: -3.6 percent
Terre Haute: -1.9 percent
Muncie: -1.7 percent
Evansville: -1.6 percent
Fort Wayne: 0.8 percent
*Chicago: 0.9 percent
Lafayette: 1.6 percent
Bloomington: 2 percent
Indianapolis: 2.1 percent
*Cincinnati: 2.5 percent
*Louisville: 2.6 percent
South Bend: 2.6 percent
Elkhart-Goshen: 6.5 percent
*Metropolitan area includes Indiana counties
Source: U.S. Bureau of Economic Analysis
There's no denying the excitement and energy in Fort Wayne right now. Downtown is busy day and night. Houses are selling quickly for prices not seen before. The unemployment rate continues to be near a record low.
However, Fort Wayne's momentum isn't extending into much growth for local gross domestic product. In 2016, local GDP rose 0.8 percent over 2015, as compared to the national metro growth rate of 1.7 percent. It put Fort Wayne in the 223rd spot for growth out of more than 380 metropolitan areas, according to U.S. Bureau of Economic Analysis numbers released last month. Economically speaking, Fort Wayne isn't accelerating.
What is GDP?
It is helpful to understand what GDP is to recognize its economic utility. GDP is often discussed at the national or global level as a measure of an economy's size. It tallies the value of goods and services less the value of the goods and services used up in production. In other words, it measures what a locality, state or country makes, both tangible and intangible.
There are two measures for GDP: actual dollars and real dollars. Actual dollars looks at totals for the year without considering inflation and its devaluing effect over time. Real dollars pinpoint the value to a specific year, thus removing inflation as a consideration. That way a 2009 real dollar is worth the same as a 2016 dollar.
Actual and real values
Last year Fort Wayne produced $20.88 billion in actual dollars of goods and services, making it the 115th-largest metro economy. The Bureau of Economic Analysis measures Fort Wayne by the metropolitan service area of Allen, Whitley and Wells counties. Fort Wayne's 2015 economy was valued at $20.45 billion in actual dollars. In terms of population, metro Fort Wayne lands at the 125th spot, according to 2016 U.S. Census Bureau population estimates.
The real GDP, measured in 2009 dollars, isn't so much about its annual total but the comparison across years. It went from $18.57 billion in 2015 to $18.71 billion in 2016, using real value. That's how the 0.8 percent growth is calculated. The jump between 2014 and 2015 was 2.1 percent and 1.9 percent for 2013 to 2014. Indiana's 2016 GDP growth was 1.5 percent, which matched the overall national growth.
Manufacturing rules here
One of the most interesting parts of the GDP data is a breakdown by sector. Separating goods- and services-producing industries shows services make up more than twice as much as goods here. Specifically, about $11.8 billion of real dollars comes from the service side, while $5.5 billion comes from the production of goods.
Despite manufacturing's employment decline, it is the largest single component of Fort Wayne's economy. Almost 27 percent of the 2016 private-industry real GDP – $4.67 billion in 2009 dollars – comes from it. By comparison, 20 percent of Fort Wayne's 2001 economy was manufacturing.
Within manufacturing, almost 80 percent comes from durable goods, defined as tangible products that can be stored or inventoried and used repeatedly or continuously over a prolonged period. The most obvious example is the trucks produced at the General Motors assembly plant, but there are many more. In real dollars, durable goods manufacturing grew nearly 62 percent from 2001 to 2016.
The remaining portion of manufacturing comes from nondurable goods, which are products that have an average life of less than three years. While it makes up only about a fifth of Fort Wayne's goods produced, it is growing faster than its durable counterpart. It grew 2.8 percent from 2015 to 2016. Durable goods grew a paltry 0.24 percent in that same time. However, across that 15-year period that saw booming durable goods, nondurable goods grew 33.6 percent locally.
Finance, insurance, real estate, rental and leasing make up the largest segment of the service sector at $2.82 billion in real dollars (specifically, $1.68 billion for finance and insurance). Last year was not the best-performing year for these industries. That goes to 2012 for larger grouping at $2.98 billion; however, 2016 bests 2014's real $1.67 billion for the finance and insurance subsector.
The second-largest service industry in real GDP is educational services, health care and social assistance, coming in at $2.54 billion, with health care and social assistance at $2.39 billion. The education and health care industry increased 47.7 percent since 2001.
The breakdowns for Fort Wayne insurance carriers and hospitals were not available in the recently released data.
For fans of smaller government, Fort Wayne is delivering in this area over the past decade and a half. It was $1.46 billion in 2001 in real dollars. In 2016? $1.37 billion. There was a small increase between 2015 and 2016 – 0.03 percent, but it was well below the overall real growth. A breakdown of federal civilian, federal military, and state and local outputs wasn't released for 2016, but past years indicate the decline has come from reductions in military and state and local services.
How we compare
In the 15 metro areas with Indiana counties, Fort Wayne's growth falls in the center because some experienced above-average growth and others shrank. There is no obvious pattern of growth geographically across the state. Five saw their real GDP decline: Columbus (-3.6 percent), Terre Haute (-1.9 percent), Muncie (-1.7 percent), Evansville (-1.6 percent) and Kokomo (-1.1 percent). The other growing metro areas were Elkhart-Goshen (6.5 percent); South Bend (2.7 percent); Louisville, Kentucky (2.6 percent); Cincinnati (2.5 percent); Indianapolis-Carmel-Anderson (2.1 percent); Bloomington (2.0 percent); Lafayette-West Lafayette (1.6 percent); Chicago-Naperville-Elgin (0.9 percent); and Michigan City-LaPorte (0.1 percent).
Elkhart-Goshen's 6.5 percent growth puts it at the sixth highest in the country. Most of that came from durable goods manufacturing, specifically recreational vehicles, but some industries, such as construction and finance, insurance and real estate, declined.
Looking at Fort Wayne's Midwestern counterparts, they too have some up and some down, but there's less of a spread. Madison, Wisconsin's real GDP grew at 3.2 percent. Grand Rapids-Wyoming, Michigan, and Des Moines-West Des Moines, Iowa, came in at 2.3 percent and 2.1 percent. Fort Wayne is nestled between Toledo, one tenth above, and Dayton, one tenth below. Two Illinois metros, Rockford and Peoria, went down.
Rachel Blakeman is director of the Community Research Institute at IPFW.