Rocky Mountain Gross Domestic Product increased to $613bn in 2015
The Rocky Mountain Gross Domestic Product (GDP) increased to $613bn in 2015 from $256bn in 1997, an increase of 139%, making it the second fastest growing economy out of eight regions over this eighteen year period. The government sector made up 13% of GDP, and the private sector 87%, 67% in services and 20% in goods. In monetary terms, the service sector GDP was $408bn, goods GDP was $125bn and the government sector was $80bn in2015.
The compound annual growth rate (CAGR) for the period is an impressive 5%p.a. (USA 4.2%) and is second only to the 5.2%p.a. growth in the Southwest region. All three sectors of the regional economy are performing above the national average with services growing 5.2%p.a. (USA 4.5%), goods by 4.6% (USA 3.2%) and the government sector by 4.2% (USA 4.1%).
Greater insights into the momentum behind the Rocky Mountain regional economy are revealed when the CAGR% are calculated for the three very distinctive periods in the 1997 to 2015 time period, namely:
1997 to 2007: The Pre-Recession Years
2008 to 2009: The Great Recession Years
2010 to 2015: The Post-Recession Years
Rocky Mountain Gross Domestic Product ranked Number 1 for growth pre-recession
Pre-recession, the Rocky Mountain economy grew faster than any other region with an impressive 6.7%p.a. growth rate for the ten years from 1997 to 2007, compared to 5.4%p.a. for the USA economy as a whole. The goods-producing sector grew faster than the services sector, increasing by 7.5%p.a. (USA 4.6%) compared to 6.7%p.a. (USA 5.6%).
This in itself is unusual as the Southwest region was the only other one where the growth in the goods sector exceeded the service sector from 1997 to 2007.
During the recession period, GDP declined by 0.1% p.a. in 2008 and 2009 and although this was better than the 0.2%p.a. decline nationally, the decline is sharper because it was growing so strongly in the pre-recession period. The services sector was hit hardest relative to other regions, with zero growth in GDP compared to a 0.4%p.a. increase nationally.
The goods-producing sector fell by 3.2%p.a. (USA 5%), ranking 3rd compared to other regions which is a sign of resilience especially as the sector grew so fast in the ten years before the recession. Meanwhile the government sector grew by 4.5%p.a. (USA 4%) during the recession years, second only to a 5.1%p.a. growth rate achieved in the Southwest.
Post Recession Rocky Mountain Gross Domestic Product ranked 4th for growth
Post-recession the Rocky Mountain Gross Domestic Product CAGR ranked fourth when compared to the other regions. Its CAGR of 3.9%p.a. (USA 3.8%) is just above the national average but ranks behind the Southwest, Far West and Plains regions. This time GDP in the service sector is growing faster than in the goods sector, at 4.5%p.a. and 2.7%p.a. respectively, and while the former is ahead of the national average of 4.2%p.a. the latter lags behind the 3.7%p.a. growth in the national goods producing sector. The government sector Gross Domestic Product CAGR of 2.5% is ahead of the national average of 2%p.a.
In conclusion, the Rocky Mountain Gross Domestic Product has grown impressively since 1997 and managed to weather the great recession better than most. Overall it is the second fastest growing regional economy from 1997 to 2015 but it has slipped to fourth in the post-recession period. The economy has grown across all three sectors which helps maintain some balance, though the services sector’s increase in the share of the economy has started to accelerate in the post-recession period. More detailed analysis on a state and industry basis will reveal more insights in later posts.
To see the same posts for the other regions, here are the links
Gross Domestic Product data is sourced from the Bureau of Economic Analysis (BEA) and is up to date as of June 20th 2017.
