Data Shows Significant Gains…in Spite of Losses
In late February, the BEA (Bureau of Economic Analysis) released the 2011 Metropolitan GDP (Gross Domestic Product) estimates and revised the 2000-2010 GDP figures. GDP is a measure of final goods and services produced within a specific region. The most recent GDP statistics show that Brevard’s economy produced over $18.5 billion worth of goods and services in 2011. After adjusting for inflation, this figure represents a $193 million (or 1.1 percent) year over year decline from Brevard’s 2010 economic output.
While the 2011 Brevard GDP data failed to continue the net gains experienced in 2010, a detailed analysis of the underlying data shows several important economic sectors in Brevard experienced noteworthy increases. The manufacturing industry of Brevard posted the single largest gain, $222 million (or 5.1 percent) from 2010 in inflation adjusted dollars. This is significant as the performance of a local economy’s manufacturing industry is often viewed as a driver of tertiary industries and economic growth. Other notable sectors which experienced growth were the transportation and utilities, management of companies and enterprises and arts, entertainment and recreation sectors.
Source of the Decline
The $193 million net decline in economic output was mainly due to the single largest decrease by any sector, the real estate and rental and leasing industry. This sector experienced a $337 million (or 22.3 percent) decline in 2011 and thereby erased many of the gains posted by other industries. This single large decline was most likely due to the bottoming of real estate values during 2011. Other notable sectors that experienced declines during 2011 were in the administrative and waste management services, construction and government sectors.
It is important to keep this most recent round of GDP data in perspective while simultaneously appreciating the lessons illustrated by the statistics. The importance of a well diversified economy is evident in Brevard’s 2011 GDP data. Had Brevard’s economy been less diversified, the loss incurred by the real estate sector would have taken a significantly greater toll without the offset provided by Brevard’s manufacturing industry. While large losses in real estate will cease in future data as real estate prices increase, efforts to diversify the economy should continue in order to prevent an over-concentration driven loss.