Breaking Down the Gross Metropolitan Product Figures
The Bureau of Economic Analysis (www.bea.gov) recently published their 2014 estimates for Gross Metropolitan Product. Bloomberg Business news reported that the San Jose Metropolitan Area was ranked number one Richest City in America.
Looking more closely at the Bureau of Economic Analysis’s data on Gross Metropolitan Product a different picture emerges. Gross Metropolitan Product is the dollar value of all final goods and services produced by a metropolitan area in a given year. The data quantifies the value of output a region produces. A fundamental identity equates Gross Metropolitan Product to Gross Metropolitan Income. Basically all the income received from production of goods flows to households in the form of different income streams. When the data is combined with population figures it can provide a proxy for average income by area residents. For instance the San Jose Metropolitan Area which is Santa Clara County and San Benito combine to produce $205 trillion worth of goods and services. Based upon 2014 Census estimates, the San Jose metropolitan area is home to 1.95 million residents. When combining these numbers, it demonstrates that area residents receive $105,800 in income per resident. When looking at the largest 100 metropolitan areas by population, the San Jose Area is ranked number one. However when looking at all 380 metropolitan areas, the San Jose area is ranked sixth.
In the City of San Jose alone, nearly 50% of City residents work within the City of San Jose, and another 35% work in the balance of Santa Clara County. Which leaves nearly 15% of San Jose’s residents working in other geographies or metropolitan areas. When you look at the job estimates for each metropolitan region you find that the San Jose metropolitan area’s productivity level from the actual workers, regardless of their residence results in $215,600 per worker and ranks fourth in productivity in the nation out of the 380 metropolitan areas. When looking at the largest 100 metropolitan areas by number of jobs, the San Jose area is ranked number one. Looking at the industry make-up of the top 3 economies compared to San Jose Metropolitan Area breaks down as follows:
- Midland Texas’ primary industries are Aerospace/Aviation and Oil/Energy
- Wichita Kansas’ primary industry is Aerospace
- Portland Oregon’s primary industries are consumer products and healthcare
For more information please contact John Lang, City’s Chief Economist.