Weekly Economic Trends and Indicators

We depart from the normal format this week to begin a series of occasional articles on the economic characteristics of the Quad Cities area. This first installment will focus on real gross domestic product (real GDP) in the six-county service area of the Quad Cities Chamber.

GDP is our best measure of total market activity in a geographic area. By definition, GDP is the value of all final goods and services produced in a geographic area in a year. “Real” GDP simply means that this value has been adjusted for inflation. Of course, price increases will increase the value of what is produced. That is why it is important to take out the effect of inflation (in other words, to “deflate”), so that we are measuring the true increase in production rather than simply price increases. Even though there was significant inflation throughout the country (and in this area) in 2021, inflation adjusted economic growth was very robust compared to the recent past.

The key takeaway is that each one of the six counties in our service area saw growth in real GDP in 2021.
County Real GDP Growth 2021

• Clinton (IA) 5.9%
• Henry (IL) 6.2%
• Mercer (IL) 5.2%
• Muscatine (IA) 2.9%
• Rock Island (IL) 4.2%
• Scott (IA) 4.2%

Real GDP was mostly flat to slightly lower throughout the region (and the nation) during 2020, the year of the COVID-19 recession. Yet even so, 2021’s real GDP gains exceeded 2020’s real GDP losses in each of our six counties.

We commonly hear about GDP for the entire country; however, the Bureau of Economic Analysis also publishes GDP data at the state, metro area, and county levels. County level data is only published once per year, and with a lag of almost an entire year. These growth rates for 2021 were released in December 2022. As a rule, real GDP growth rates at the national level that are higher than 2.5% are considered better than average. At the local level, growth rates tend to fluctuate more than at the national level due to concentrated effects of changes in key industries. These growth rates in the Quad Cities area indicate a solid rebound from the 2020 recession.

In summary, total economic activity adjusted for inflation increased in each of the six counties in our service area during 2021. As we noted last week, manufacturing employment showed strong gains in 2022. This was a continuation of solid gains in the sector in 2021. However, in 2021 job growth was shared more broadly than in 2022. Consequently, overall real GDP growth in 2022 will likely be somewhat less than the surprisingly robust numbers of 2021. Even so, manufacturing’s contribution to local GDP growth is likely to remain positive up to the time of this writing.

Next week: National employment situation