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Gross Domestic Product Per Employee

Description: 

Gross domestic product (GDP) per employee is the broadest proxy for productivity for states and metropolitan areas. (No true measure of productivity is available for states or substate areas.) GDP per employee is calculated by dividing GDP by total employment.

GDP for the nation, states, and metro areas are produced in both current dollars and inflation-adjusted (real) dollars. The inflation adjustment is unique to each geographic area. Only annual data are available by state and metropolitan area. Though estimates of current dollar GDP by state go back to 1963, inflation-adjusted data are available only back to 1987. Gross domestic product data are available by metro area only since 2001; county data are not available.

Since GDP is a measure of total economic output, total employment (not the more common wage and salary employment) is used to calculate the productivity measure. The only source of total employment, which includes estimates of the number of proprietors as well as the total number of wage and salary workers, provides annual estimates since 1969 for the United States, Arizona, and the state’s metropolitan areas.

The latest current dollar GDP per employee figure by metropolitan area is presented on Arizona Indicators, along with data for the same year for the United States, the U.S. metro average, and Arizona. The metropolitan area figures are also presented as a percentage of the U.S. metro average. Arizona’s current dollar figure as a percentage of the national average is presented back to 1969. The inflation-adjusted percent change in GDP per employee is displayed, beginning in 1988 for the United States and Arizona and in 2002 for the metropolitan areas.

Data Source: 

U. S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/regional/index.htm. Estimates are released annually, with the figures for the preceding calendar year labeled as “advance” (preliminary) and only available by sector. Estimates for prior years are revised and available by sector and subsector. State estimates are released in June; metro area estimates are released in September.

The BEA also is the source for total employment. State and national employment data are reported nine months after the end of a year; metropolitan area employment data are released two months later, in November. All of the data can be accessed from http://www.bea.gov/regional/index.htm.

Data Quality Comments: 

The GDP estimates for the latest year are labeled as “advanced” — an abbreviated set of mostly preliminary data and a simplified methodology are used to generate these estimates. Even after the estimates are revised, some of the inputs to the calculation of GDP by state and especially by metropolitan area are estimated. The annual employment figures also are estimates. No distinction is made between full-time and part-time employment.

iconGross Domestic Product Per Employee, 2013

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Visualization Notes:

GDP per employee in Arizona in 2013 was $82,266, less than the national average of $91,626. Each of Arizona’s seven metro areas had a figure less than the U.S. metro average, with a substantial differential in each area except Phoenix.

iconGross Domestic Product Per Employee as a Percentage of the U.S. Metro Average, 2013

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Visualization Notes:

A reasonable target is for GDP per employee, a proxy measure for productivity, to be near the U.S. metro average in Arizona’s larger metro areas. In 2013, GDP per employee relative to the national metropolitan average was 8 percent less in Metro Phoenix and 25 percent less in Metro Tucson. GDP per employee was 19 percent below the U.S. metro average in Metro Sierra Vista and from 29-to-39 percent below average in the other four metro areas. A number of factors account for the geographic variation, with the industrial mix being the largest factor.

iconGross Domestic Product Per Employee in Arizona as a Percentage of the National Average

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Visualization Notes:

A reasonable target is for Arizona’s GDP per employee to be near the national average. This was generally the case historically. The percentage of the U.S. average was never below 99 from 1969 through 1980. After falling substantially during the 1980s, the ratio rebounded to between 96 and 99 percent of the national average from 1992 through 1999, but has dropped since then, to 89.8 percent in 2013. After small increases in the ratio in 2011 and 2012, the ratio again fell in 2013.

iconGross Domestic Product Per Employee in Arizona and the United States, Inflation-Adjusted Percent Change

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Visualization Notes:

The annual inflation-adjusted percent change in GDP per employee typically ranges from slightly negative to 2 percent nationally, with the range broader in Arizona. The change in Arizona varies by year from less-to-more than the national average. Relative to the national average, Arizona’s performance was substantially weaker from 2008 through 2010. Arizona outperformed the nation in 2011 but this was offset by a larger decline in 2013.

iconGross Domestic Product Per Employee, Inflation-Adjusted Percent Change

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Visualization Notes:

In the nine years through 2013, representing an entire economic cycle, the annual average percent change in real GDP per employee was greater than the U.S. metro average of 0.41 percent in the Sierra Vista and Flagstaff metro areas. The figures in the Lake Havasu City and Tucson metro areas were close to the U.S. metro average, but the average was barely positive in the Phoenix area and was negative in the Prescott and Yuma areas.

Data Source

U. S. Department of Commerce, Bureau of Economic Analysis: http://www.bea.gov/regional/index.htm. Estimates are released annually, with the figures for the preceding calendar year labeled as “advance” (preliminary) and only available by sector. Estimates for prior years are revised and available by sector and subsector. State estimates are released in June; metro area estimates are released in September.

The BEA also is the source for total employment. State and national employment data are reported nine months after the end of a year; metropolitan area employment data are released two months later, in November. All of the data can be accessed from http://www.bea.gov/regional/index.htm.