County Economies 2024: Under the Hood of National Economic Trends

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 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, 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 
 

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.

The U.S. experienced a slight population increase (0.38 percent) from 2021 to 2022, and the county story diverged from this perceived national stagnation as residents moved within our nation, from denser areas to less dense suburban and rural areas. Underlying the national population inertia were three groups of counties: one-third of county populations remained steady (±0.5 percent), one-third of counties notably increased in population (+>0.5 percent) and the remaining third experienced notable levels of population decline (->0.5 percent).

A leading driver of population change was jobs and business opportunities: people moved to places where they could find work and with the spread of telework capabilities, counties further from major job hubs became more viable places to work. Proximity to travel routes, like highways and airports, influenced where people chose to relocate, demonstrating the value of mobility.vi

Numerous large counties experienced residents leaving for less populated counties and most of the same large counties attracted international migrants to lessen the impacts of domestic out-migration.vii Some workers chose areas with lower living costs and made migration decisions based on community, culture and public amenities. Many tourist-based counties had substantial population increases.viii Not every small, rural county benefitted from domestic migration, especially those with a variety of longstanding social and economic challenges – ranging from substance use to broadband access to infrastructure deterioration.ix

The economic impacts of these population shifts unfold in counties in various ways. Growing populations generally positively affect a county’s economic wellbeing, despite the challenges associated with growth.x Population and business growth are closely connected, given the interdependency between workers and business formation, and counties experiencing population growth also often experience business growth.xi

The labor market is a key determinant of economic growth and residents live in places where they can find work. The types of jobs are important and local industry makeup is a top factor influencing the county economy.xii

Over the past decade, two industries most frequently dominated the job markets of thriving county economies and of the largest counties: (1) manufacturing and (2) health care and social assistance.xiii Distressed county economies have job markets dominated by the (1) agriculture and (2) government industries,xiv though agriculture still plays a prominent role in most small county labor markets.xv

Most counties (77 percent) expect a local industry shift over the next decade.xvi Although many counties see a diminished role for agriculture in the future, it will remain a core industry for more than half of all small counties.xvii Counties overall anticipate a decrease in government-driven local labor markets.xviii A diminished role of government poses a challenge for counties as we try to attract and retain the next generation of workers in the public sector.2

Many larger counties predict an increase in professional, scientific and technical services as a key labor market driver over the next decade, with manufacturing and health care continuing as core drivers. Small counties do not identify any new industries to replace agriculture and government; manufacturing, construction and health care will continue as key labor market drivers.xix

Industry composition is critical to prepare local infrastructure, workforce and community development and encourage current and future industry diversification and provide good, stable jobs for residents.xx

Housing has a crucial role in the economic development of communities as it creates healthy, safe and thriving environments, drives local economies, creates job opportunities and generates tax revenue for governments.xxi For counties with growing populations and a growing number of businesses, the local cost of living, real estate prices, public amenities, proximity to trade routes and other such factors drove growth.xxii But for counties with population or business stagnation or decline, housing availability and affordability was the most prevalent challenge inhibiting economic growth.xxiii

Housing is essential, but remains a challenge due to rising housing costs, limited land availability and constrained supply.xxiv  Between 2018 and 2022, half of renters (20.5 million households) and over one-fifth of homeowners (17.8 million households) were overburdened by housing costs.3 In very few counties, the housing market is meeting the communities' needs: 82 percent of counties believe it is not.

Alongside housing, broadband is a top investment priority for counties.xxv Though vital for economic growth, disparities persist: broadband infrastructure is inadequate in 48 percent of counties.xxvi

A healthy population contributes to a more productive and engaged workforce, fostering economic growth and stability.xxvii

Access to physical and mental health services has negatively impacted the local economy in half of counties. This connection between healthcare access and economic well-being is particularly relevant in rural communities given the exodus of hospitals and healthcare facilities.4

Behavioral health incidences have increased across counties in the last year, creating a challenge for local leaders, given half of the U.S. population lives in a county designated as a mental health professional shortage area.xxviii The inability to access mental and behavioral health services can lead to negative physical and psychological health outcomes, straining other community resources like emergency services.xxix County governments have also struggled with the health, public safety and societal consequences of substance use, including the opioid epidemic, as well as the devastating community impacts.xxx

A county needs working-age residents to support current and prospective companies and the younger and older generations.xxxi Over the past ten years, the dependency ratio5 has been increasing across the U.S., meaning there are more dependent residents below age 15 or above age 64 compared to working-age residents.xxxii Age dynamics within a workforce often have noticeable impacts when they are out of balance. The age of the workforce does not perceptibly impact counties with enough working-age residents, but counties without enough working-age residents overwhelmingly experience negative economic impacts.xxxiii

Counties with sufficient working-age residents tend to have opportunities for young workers to develop their skills and join the workforce, while counties with insufficient working-age residents tend to have more limited opportunities.xxxiv

Family support can set up the next generation of workers for success. Access to childcare poses a substantial opportunity.xxxv Sixty-five (65) percent of counties report fair or poor access within their community. Almost half (44 percent) of counties report inadequate youth development programs.xxxvi

In 2023, 28 separate billion-dollar disasters resulted in approximately $92.9 billion in damages.xxxvii Additionally, 849 counties experienced at least one federally declared major disaster, 312 counties faced at least one emergency declaration and 720 counties encountered at least one disaster.xxxviii 

Natural disasters can have a devastating impact on both the environment and local economies causing an increase in people leaving the affected areas, a drop in home prices and higher rates of poverty.xxxix Many residents are also facing increased insurance costs.xl 

Counties play a critical role in disaster and emergency management, often serving as the first responders.xli Most counties (83 percent) consider their communities prepared to respond to a disaster to some extent.xlii

i Ben Casselman, “U.S. Economy Grew at 3.3% Rate in Latest Quarter” The New York Times, (2024)

ii Bureau of Labor Statistics, “The Employment Situation – January 2024” (2024)

iii Gwynn Guilford, Nick Timiraos, “Inflation Edged Up in December After Rapid Cooling Most of 2023” The Wall Street Journal, (2024)

iv  Alicia Parlapiano, Deborah B. Solomon, Madeleine Ngo and Stacy Cowley, “Where $5 Trillion in Pandemic Stimulus Money Went,” The New York Times (March 2022)

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

vi Jobs and business opportunities was the most frequently selected condition causing population change, selected by 39 percent of counties. Nearly half of counties with growing businesses considered their proximity to trade routes as a key growth factor and selected most frequently by those with growing businesses. Proximity to travel routes was a top condition influencing population growth by over one quarter of counties with growing populations. Source: NACo survey of county officials’ economic sentiments, 2024.

vii Ninety-one of the 133 large counties had negative domestic migration and positive international migration. For 16 of these counties, positive international migration outweighed negative domestic migration, causing positive net migration. Source: NACo Analysis of U.S. Census Bureau - Population Estimates Program (PEP) – 2022.

viii For 39 percent of counties with growing populations, the local cost of living was one of the top three conditions driving population growth. For over one quarter (27 percent) of counties with population growth, public amenities, community and culture was one of the top conditions driving population growth. Source: NACo survey of county officials’ economic sentiments, 2024. See also Adam Ozimek, “How Remote Work is Shifting Population Growth Across the U.S.,” Economic Innovation Group (April 2022).

ix As an example, 51 small counties in West Virginia and Kentucky had negative domestic migration rates from 2021-2022 (out of 145 small counties in W.Va. and Ky.); 106 small counties/parishes in Louisiana, Mississippi and Alabama had negative domestic migration rates (out of 150 small counties in those states); and 336 small counties in the Midwest region had negative domestic migration rates (out of 724 small MW counties). Source: NACo Analysis of U.S. Census Bureau - Population Estimates Program (PEP) – 2022. Substance use, broadband access and infrastructure deterioration were among the many challenges mentioned by small and/or distressed county economies in NACo’s recent survey.

x Two-thirds of counties with growing populations experienced positive economic impacts due to this population growth; two-thirds of counties with stagnant or declining populations experienced negative economic impacts due to decline. Source: NACo survey of county officials’ economic sentiments, 2024.

xi Two-thirds (67 percent) of counties with growing populations had a growing number of businesses. Two-thirds (65 percent) of counties without growing populations also did not have a growing number of businesses. One third (30 percent) of counties cited an adequately skilled and educated workforce as driving business trends. Source: NACo survey of county officials’ economic sentiments, 2024.

xii For all counties, jobs and business opportunities was the most frequently selected driver of population change (growth, stagnation or decline), selected by 39 percent of counties. Local industry composition was the most frequently selected factor contributing to the current state of the local economy, selected by over half (51 percent) of all counties. Source: NACo survey of county officials’ economic sentiments, 2024.

xiii Manufacturing was selected as a top industry by 41 percent of thriving county economies. Health care and social assistance was selected as a top industry by 38 percent of thriving county economies. Three-quarters (74 percent) of thriving county economies chose their top industries because they have the most jobs. Over half (56 percent) chose their top industries because they have the most jobs growth. Just about half (49 percent) chose their top industries because they attract workers from outside the county. Counties were able to select more than one option. Source: NACo survey of county officials’ economic sentiments, 2024.

xiv Agriculture was selected as a top industry by 55 percent of distressed county economies. Government and government enterprises was selected by 42 percent of distressed county economies. Most (84 percent) of distressed county economies selected their top industries based on which had the most jobs. Just under one third selected their top industries based on which had the highest wages (31 percent), the most jobs growth (30 percent), the best benefits (28 percent) or which attracted workers from outside the county (30 percent). Counties were able to select more than one option. Source: NACo survey of county officials’ economic sentiments, 2024.

xv Two-thirds (65 percent) of small counties listed agriculture, forestry, fishing and hunting as one of their top labor market drivers over the past decade. Nearly half (44 percent) of thriving small counties included manufacturing (vs. 28 percent of distressed small counties) and one quarter (25 percent) included health care and social assistance (vs. 15 percent of distressed small counties). Forty (40) percent of distressed small counties selected government and government enterprises (vs. 20 percent of thriving small counties); one third (30 percent) selected construction (vs. 16 percent of thriving small counties); and one quarter (25 percent) selected mining, quarrying and oil and gas extraction (vs. 13 percent of thriving small counties). Source: NACo survey of county officials’ economic sentiments, 2024.

xvi When asked to select the top three industries which will drive their local economy over the next decade, three-quarters (77 percent) of counties selected different industries (at least one) from those which drove their local economy over the past decade. Three-quarters (73 percent) of thriving county economies selected the top industries which will drive their economy in the future because these industries will have the most jobs growth. Over half (58 percent) selected these industries because they will attract workers from outside the county. Half (48 percent) did so because these industries will simply have the most jobs over the next decade. Counties were able to select more than one option. Source: NACo survey of county officials’ economic sentiments, 2024.

xvii The share of thriving county economies which selected agriculture as a top industry decreased from 36 percent over the past decade to 27 percent over the next decade. The share of distressed county economies which selected agriculture as a top industry decreased from 55 percent over the past decade to 48 percent over the next decade and remained the most frequently chosen industry by distressed county economies. Nearly two-thirds (63 percent) of distressed small counties listed agriculture in their top labor market drivers over the next decade (vs. 49 percent of thriving small counties). Roughly the same share of distressed small counties (67 percent) had selected agriculture as a top driver over the past decade (vs. 64 percent of thriving small counties, over the past decade). Source: NACo survey of county officials’ economic sentiments, 2024.

xviii The share of all counties which had government and government enterprises as a top labor market driver over the past decade decreased from 32 percent to 21 percent (from the past decade to the next decade). For small counties, this share decreased from 30 percent to 20 percent (20 percent to 11 percent for thriving small counties; 40 percent to 28 percent for distressed small counties). For larger counties, this share decreased from 33 percent to 21 percent (30 percent to 21 percent for thriving larger counties; 44 percent to 22 percent for distressed larger counties). Source: NACo survey of county officials’ economic sentiments, 2024.

xix After agriculture, manufacturing, construction and health care were the most frequently selected industry drivers for future labor market drivers by small counties. The share of small counties which selected each of these industries did not change much from the past decade to the future decade. Manufacturing was selected by 36 percent in the past (vs. 36 percent in the future); construction was selected by 23 percent in the past (vs. 26 percent in the future); and health care was selected by 20 percent in the past (vs. 22 percent in the future). The shares of thriving and distressed small county economies which selected manufacturing did not change (44 percent and 28 percent, respectively, both for past and future). The share of thriving small counties which selected construction increased from 16 percent to 21 percent, while the share of distressed small counties which selected health care increased from 15 percent to 20 percent. The share of small counties with accommodations and food services as a top industry rose from 12 percent to 16 percent from the past to the next decade. For thriving small counties, this share increased from 16 percent to 20 percent. For distressed small counties, this share increased from 8 percent to 12 percent. Source: NACo survey of county officials’ economic sentiments, 2024.

xx For additional information on county-level industries, economic diversification and the impacts of the pandemic, see Kevin Shrawder, “Output and Productivity Amid a Global Pandemic: 2021 County GDP Analysis,” National Association of Counties (March 2023)

xxi  See Keith Wardrip, Laura Williams, and Suzanne Hague, “The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature” (December 22, 2023) and Kriti Ramakrishnan, Elizabeth Champion, Megan Gallagher and Keith Fudge, Urban Institute, “Why Housing Matters for Upward Mobility Evidence and Indicators for Practitioners and Policymakers” (December 22, 2023).

xxii Counties with population growth most frequently cited the following local conditions as those which are driving population growth: local cost of living (selected by 39 percent of counties with population growth); jobs and business opportunities (36 percent); public amenities, community and culture (27 percent); and proximity to travel routes (27 percent). Counties with business growth more frequently cited the following the local conditions as driving these trends: proximity to trade routes (42 percent); tax and financial incentives (35 percent); real estate prices and local cost of living (31 percent); an adequately educated and skilled workforce (30 percent) and local infrastructure (30 percent). Counties were permitted to select their top three local conditions. Source: NACo survey of county officials’ economic sentiments, 2024.

xxiii The availability of affordable, safe, healthy housing was the most frequently cited local condition inhibiting population growth, selected by over half (52 percent) of counties with population decline or stagnation. Similarly, housing affordability and availability was the most frequently cited local condition inhibiting business growth, selected by half (49 percent) of counties with business decline or stagnation. Counties were permitted to select their top three local conditions. Source: NACo survey of county officials’ economic sentiments, 2024.

xxiv Lida R. Weinstock, Congressional Research Service (CRS), “U.S. Housing Supply: Recent Trends and Policy Considerations,” (December 22, 2023).

xxv Top five investment priorities for counties, by share of counties which selected each priority: (1) housing (47 percent), (2) broadband (46 percent), (3) transportation infrastructure (39 percent), (4) county workforce (37 percent), (5) education and workforce development (34 percent). Source: NACo survey on county economic sentiments, 2024.

xxvi The disparity in broadband access nationwide is alarming, with a significant percentage of American households lacking high-speed internet. Approximately 11.5 percent of American households currently lack access to high-speed internet.  The South has the highest percentage of households without high-speed internet, at 13 percent.  In comparison, the Midwest, Northeast and West regions have rates of 12 percent, 11 percent and 9 percent, respectively.  Source: NACo Analysis of U.S. Census Bureau - American Community Survey (ACS) 5-year estimates, 2015-2019 (Tables S2801 and S2802). See also: Lennard G. Kruger and Angele A. Gilroy, Congressional Research Service (CRS), “Broadband Internet Access and the Digital Divide: Federal Assistance Programs,” (December 22, 2023).

xxvii The Institute for Health and Productivity Studies at Johns Hopkins Bloomberg School of Public Health, “Physical Activity in the Workplace: A Guide for Employers (February 1, 2024) and Rebecca J. Mitchell, Ronald J. Ozminkowski and Seth Serxner, “Improving Employee Productivity Through Improved Health,” (February 1, 2024).

xxviii Blaire Bryant, Jonathan Harris and Ashley Hunt, "Behavioral Health Conditions Reach Crisis Levels: Counties Urge Stronger Intergovernmental Partnerships and Outcomes," National Association of Counties (May 2023).

xxix Franchesca Mongelli, Penelope Georgakopoulos and Michele T. Pato, “Challenges and Opportunities to Meet the Mental Health Needs of Underserved and Disenfranchised populations in the United States,” (February 2, 2024).

xxx Julia Paris and Caitlin Rowley, “The Economic Impact of the Opioid Epidemic,” (February 2, 2024).

xxxi For a more detailed analysis, see Thom File and Robert Kominski, “Dependency Ratios in the United States: A State and Metropolitan Area Analysis,” U.S. Censuse Bureau (2012)

xxxii Across the nation, there were 49 dependent-age people for every 100 working-age people in 2010. By 2019, that number had increased to nearly 54 dependent-age people for every 100 working-age people, driven by an increase in the population over 65 years old. Looking at the county level, we find even higher dependency ratios: the median dependency ratio for a county is 62 dependent people per every 100 working-age people. See Luke Rogers and Kristie Wilder, “Shift in Working-Age Population Relative to Older and Younger Americans,” U.S. Census Bureau (June 2020). Small counties had the highest median age dependency ratio, with 64 dependent residents for every 100 working-age residents, followed by medium-sized counties (57 per 100). Large counties had the lowest ratio of 52 dependents for every 100 working-age residents. By region, the West had the highest age dependency ratio at 65 dependent-age residents per 100 working-age residents, followed by the Midwest (64 per 100) and the South (60 per 100); the Northeast had the lowest ratio at 59 dependents per every 100 working-age residents. Source: NACo Analysis of U.S. Census Bureau - Population Estimates Program (PEP) – 2022.

xxxiii Most (80 percent) of counties which indicated that they did not have enough working-age residents saw negative economic impacts from age dynamics. One third (33 percent) of counties which indicated that they have enough working age residents saw positive impacts, while half (48 percent) saw neutral or no impacts. Source: NACo survey of county officials’ economic sentiments, 2024.

xxxiv Over half (58 percent) of counties with enough working age residents think their county has enough opportunities for youth workforce development. Almost half (44 percent) of counties without enough working age residents do not think their county has enough opportunities for youth workforce development. Source: NACo survey of county officials’ economic sentiments, 2024.

xxxv Hana Brixi, Amanda Devercelli, Michael Rutowski and Jaime Saavedra, “Expanding Access to Childcare Helps Women, Children, and Economies,” (February 1, 2024).

xxxvi NACo survey of county officials’ economic sentiments, 2024

xxxvii NOAA National Centers for Environmental Information (NCEI), “U.S. Billion-Dollar Weather and Climate Disasters ” (2024), (January 22, 2024).

xxxviii NACo Analysis of U.S. Federal Emergency Management Agency 2013-2023 Disasters data, 2023.

xxxix Leah Platt Boustan, Matthew E. Kahn, Paul W. Rhode and Maria Lucia Yanguas, “The Effect of Natural Disasters on Economic Activity in US Counties: A Century of Data.” Journal of Urban Economics Volume 118, 2020, 103257.

xl See First Street, “The Insurance Issue” (Sep. 2023) and Shannon Martin, “The impact of natural disasters on insurance rates in 2024,” Bankrate (Jun. 2023).

xli See Sarah Gimont, Brett Mattson and Kasantha Moodley, "Findings from Intergovernmental Roundtable on Disaster Resilience: Defining and Building Capacity for Disaster Mitigation," National Association of Counties (Feb. 2023).

xlii NACo survey of county officials’ economic sentiments, 2024.