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Figuring out what GDP numbers say

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Editorial: Oct. 2, 2013

ISSUE: Gains in national GDP ranking
OUR VIEW: Assessment would benefit from benchmark

Recent economic statistics consistently have shown Hardin and surrounding counties are on the grow. In one of the latest reports, the three-county Metropolitan Statistical Area has shown continued improvement in rankings based on gross domestic product.

The GDP, which measures the market value of all final goods and services, shows the Elizabethtown MSA up 16 positions. The combined output of Hardin, LaRue and Meade counties totals more than $6.2 billion and ranked 243rd out of 381 metro areas in 2012, according to the latest data from the Bureau of Economic Analysis.

Rick Games, president of the Elizabethtown-Hardin County Industrial Foundation, said in a recent news story that the increase is related to the business boom in the area that goes beyond the base-realignment development at Fort Knox. Citing expansion at Metalsa and the opening of Flex Films USA, Games said employers have been hiring in both the manufacturing and retail sectors.

“The economy here is good,” he said.

Caught in the grips of our own personal economy, many of us fail to recognize the community at large is gaining ground economically. And when we read the statistics and hear local leaders repeatedly praise the reports, we sometimes become immune to the information and fail to fully appreciate and celebrate this good news.

While it deserves praise, it’s important in assessing the MSA’s progress, that statistics be analyzed in detail to fully understand our position in the world.

Behind the financial activities sector, the largest area of growth for the local economy was the leisure and hospitality sector, which equates to hotels and restaurants. That 0.08 percent increase can be credited at least in part to development of the Elizabethtown Sports Park, which opened in 2012. Maintaining the brand-new park’s early level of success is a critical challenge to protecting that economic surge.

Looking further into the federal report, the area actually had more sectors on the decline than on the rise — five versus four.

The most significant statistical drop was a -0.79 percent under government impact on the economy. Also, in five other sectors measured by the bureau, the MSA statistics for real GDP were unchanged from the previous year, including manufacturing.

So our overall gains are not felt in all corners of the community. The community may need to redirect attention on the slumping sectors and not simply pat ourselves on the back about the overall statistical gain.

Even after showing a GDP growth rate among the best in the nation for two years running, a ranking of 243 indicates there’s room for improvement.

Considering the community’s geographic good fortune, strong transportation network and skilled workforce, it would seem an expectation of continued economic improvement is appropriate.

However, we should not be unrealistic. The Elizabethtown MSA will not crack the GDP top five of New York, Los Angeles, Chicago, Houston and Washington, D.C. Realistically, the Elizabethtown MSA should not even be judged against No. 47 Louisville.

Instead, the best way to assess our development is by creating a list of benchmark cities that share similar characteristics, resources, advantages and disadvantages.

Maybe it is fair to compare this MSA to Clarksville, Tenn., which also encompasses Hopkinsville and Fort Campbell. It ranks at No. 170. Columbus, Ga., which is adjacent to the Home of Armor at Fort Benning, is well ahead of our region at No. 157.

In population, our three-county area surpasses No. 108 Owensboro and approaches No. 99 Huntsville, Ala. And while we admire many of the advantages that Western Kentucky University affords to Bowling Green, the Elizabethtown MSA ranks 29 spots ahead of that community’s GDP tally.

Measuring this region’s advances against communities of similar size that have amenities that we desire is an appropriate way to access a federal GDP ranking and a myriad of other statistics. Establishing the benchmarks and evaluating our continued effectiveness based on that standard is an effective assessment technique rather than just hoping to move up on a massive national chart full of apple-and-orange comparisons.

This editorial represents a consensus of The News-Enterprise editorial board.