Weekly Economic Trends and Indicators

Real gross domestic product (GDP) for the six-county Quad Cities Chamber service area increased by 1.3% in 2023 according to recent data released by the Bureau of Economic Analysis (BEA). Real GDP is adjusted for inflation. In current dollars (not adjusted for inflation), GDP in the six-county area rose 5.6% from a revised $32.1 billion in 2022 to $33.9 billion in 2023. The difference between the current dollar growth rate and the real GDP growth rate (4.3%) is due to inflation. When 2022 GDP figures were released last year, the BEA originally estimated no change in real GDP for the six-county area. However, the revised figures for 2022 showed a 1.1% increase. Revisions to individual county growth rates were mostly positive.

Despite the lag in the data, the quality of the information is well worth the wait. The BEA breaks down GDP by sector so that we can see precisely where the expansions and contractions are happening. While 1.3% real GDP growth is slightly below the overall U.S. growth rate, it is still above the growth rates that prevailed in the Quad Cities between 2013 and 2020. Behind that 1.3% average, there were sectors and counties that registered higher and lower growth rates.

Commodity price declines (especially corn and soybeans) drove agricultural production lower by about 14.5%. This lowered the overall GDP growth rate by as much as 0.3% across the region. The downturn in manufacturing which we have covered extensively this year started in late 2023 and led to a 0.4% decline in that sector. On the plus side, retail trade contributed positively throughout the region.

For 2023, growth rates varied widely from a low of -2.9% in Muscatine County to +4.3% in Scott County. Scott and Muscatine were the only counties of the six to register growth in manufacturing for the year. A decline in construction was the primary cause of the decrease in total GDP for Muscatine County. This could simply be an artifact of timing with above average construction spending in 2022 reverting back to average. Henry and Rock Island counties experienced the largest increase in retail trade, giving their overall growth rate a solid boost.

These growth rates are subject to revision over the next few years as the data becomes more complete. However, this gives us a good first look at total economic activity in the region, confirming what we have been seeing in terms of the labor market and other sources. With 2024 nearly complete, we know that trends in the labor market are likely to send GDP growth lower. However, a strong national economy should provide enough cushion to keep job losses contained and set the stage for a stronger 2025.

Next week: U.S. labor market, interest rates, and the Fed