Author

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Teryn Zmuda

Chief Research Officer & Chief Economist
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Ricardo Aguilar

Associate Director, Data Analytics
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Jonathan Harris

Associate Director, Research
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Stacy Nakintu

Senior Analyst, Research & Data Analytics
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Kevin Shrawder

Associate Director, Economic and Government Studies

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To complement the national narrative, this report layers insights through county-level analysis and local leader insights to find the common threads between growing and declining economies. NACo surveyed its members on local economic trends and sentiments to understand local economic growth drivers and detractors. New to 2024 are the effects of trillions in federal investments in the nation and local governments. At various stages of implementation, these investments are a core consideration for U.S. economic growth and a county’s ability to target key investments to community needs.

National indicators sketch a landscape of U.S. economic performance, and the details and color for that landscape derive from local perspectives and county data. In 2023, our nation’s gross domestic product (GDP) increased by 3.1 percent1 – a measure that exceeded the expectations of many forecasters who expected the Federal Reserve’s interest rate increases to stall economic growth.i Combined with low unemployment ratesii and slowing inflation throughout 2023,iii the economy is set up for continued growth and recovery from the COVID-19 recession.

To complement the national narrative, this report layers insights through county-level analysis and local insights to find the common threads between growing and declining economies. NACo surveyed its members on local economic trends and sentiments to understand local economic growth drivers and detractors, and our key takeaways are derived from national indicators paired with county-reported sentiments. New to 2024 are the effects of trillions in federal investments in the nation and local governments.iv At various stages of implementation, these investments are a core consideration for U.S. economic growth and a county’s ability to target key investments to community needs.

NACo survey respondents, by population size and by region vs. all counties, 307 county responses 
 

1 GDP measures the final value of all goods and services produced in a given time. Analysis from GDP U.S. Bureau of Economic Analysis, “Gross Domestic Product, Fourth Quarter and Year 2023 (Advance Estimate),” (January 2024)

Key Takeaways

Local economic conditions can vary substantially and provide insight into national economic trends.

  1. The U.S. experienced a modest population increase from 2021 to 2022. At the county level, one third of counties had substantial population growth, while one third experienced substantial decline.
     
  2. The period from 2020 to 2022 showed stronger GDP growth at both the county and national level than pre-pandemic. One third (32 percent) of counties kept pace with the national rate of 7.8 percent from 2020 to 2022.
     
  3. Populations shifted to less dense areas with a lower cost of living. Not all areas benefited, especially those with social and economic challenges, like substance use and deteriorating infrastructure.
     
  4. The manufacturing and health care industries are key labor market drivers for counties with thriving economies and will continue to drive labor markets over the next decade. Agriculture continues to drive many small counties, and the government industry is decreasing.
     
  5. Housing availability and affordability is the top inhibitor of population and business growth for many counties.
  6. Youth workforce development programs are critical opportunities for county governments to bolster the local economy, but nearly half of counties report inadequate systems for youth.
     
  7. Access to childcare poses a substantial opportunity for county investment: 65 percent of counties report access challenges within their community.
     
  8. Residents’ physical and mental health of residents play a pivotal role in shaping the economic well-being of counties, but nearly half of counties (47 percent) have negative economic impacts due to physical and mental healthcare access. Eighty-two (82) percent of county economies have negative impacts from substance use.
     
  9. Expanding broadband is a top investment priority for counties: almost half have inadequate infrastructure. Difficult terrain, high costs and limited capacity hinder this priority.
     
  10. In 2023, 28 separate billion-dollar disasters resulted in approximately $92.9 billion in damages. Over half (56 percent) of counties had natural disasters impact their local economies.

County-Level Analysis Reveals Top Issues Under the Hood of the National Economy

One third (32 percent) of counties kept pace with the national GDP growth rate

From 2020 to 2022, seventy-four (74) percent of counties experienced GDP growth, while the remaining 26 percent experienced local GDP decline. For counties with growing economies, the majority experienced slower GDP growth than that period’s national growth rate of 7.8 percent and one third (32 percent) of counties had GDP growth at or above the national rate.v Inconsistent broadband access, a nationally prevalent opioid epidemic, natural disaster effects and housing affordability rise to the top of the challenges faced in local economic health.

Gross Domestic Product (GDP) 2020—2022 Percent Change

Source: NACo Analysis of the U.S. Bureau of Economic Analysis - Local Area Gross Domestic Product, 2022 Vintage