Positive economic growth for the state’s Big Two!
Both business and GDP growth are relatively strong for Clark and Washoe Counties when compared to counties in the rest of the country, according to a recent report by SmartAsset. The analysis measures and compares five key economic metrics: incoming investment, business growth, GDP growth, new building permits, and federal funding. The five metrics are then combined to determine an “income investment index.”
Specifically, SmartAsset looked at the change in the number of businesses established in each county over a 3-year period as a measure of whether people are starting new business ventures in a county. They also measured real GDP growth (inflation adjusted) in the local economy, the number of new building permits per 1,000 homes, and federal funding received by each county in the form of contracts awarded to businesses, divided by the population.
Despite its overall U.S. ranking of 131 among U.S. counties, Clark is competitive with many of the Top 10 counties in both business growth (8.0 percent) and GDP growth (shown in millions):
In fact, Clark outperforms the national averages in the first three SmartAsset categories but its overall ranking is dragged down a bit by its lower than average per capita federal funding.
The following map from USASpending.gov shows that most federal contract money is concentrated in just a handful of states (2017-2018 data):
Despite that concentration, Washoe County actually does quite well in this metric, with per capita federal funding well above the national average and better than almost every county on the Top 10 list.
Business growth of “just” 4.1 percent is what holds back Washoe’s income investment index rating. While four percent is quite respectable as a general rule, the only county in the Top 10 with growth under 5 percent is Fairfax, VA – but it is buoyed by a disproportionate amount of federal funding, thanks to the fact that “local business” is government.
Clark and Washoe were the only counties in Nevada with index ratings in the high forties, keeping both regions close to the national average. Nevada’s other counties were in the thirties and forties. Here are the metrics for the 10 Silver State counties included in the study:
It is notable that the respective rankings of 131 and 169 for Clark and Washoe Counties look positively spectacular when compared with the top two counties from two of the nation’s most populous states. The top two counties in New York – Saratoga and Tompkins – are ranked 369 and 386 nationally. Illinois fares even worse, with its top two counties coming in at 387 and 477.
For comparison, here are the Top 10 U.S. counties according to the SmartAsset report, with Wasatch County, UT as the only Mountain West region to make the list. It’s also worth noting that L.A., which many Nevadans love to hate, ranked second nationally:
Finally, we took it upon ourselves to compare and rank the top two counties in the eight Brookings Instution’s Mountain West states by Incoming Investment Index. Clark ranked 7th out of 16 and Washoe ranked #9:
Here is how SmartAsset used its included economic metrics to create its index rankings:
We scored every county in our study on these four factors, weighting each factor equally. We then combined those scores to create a final ranking of cities. With that ranking, we created an index where the county with the most incoming investments was assigned a value of 100 and the county with the least investment activity received a zero.
Data sources for the SmartAsset analysis were: U.S. Census Bureau County Business Patterns Survey, U.S. Bureau Economic Analysis, U.S. Census Bureau Building Permits Survey, USAspending.gov