The North Carolina Department of Commerce’s Labor & Economic Analysis Division (LEAD) has introduced the County Economic Vitality Index, a new tool designed to provide a comprehensive measure of economic performance at the county level. The Index aims to address common questions about local economies by offering a transparent and comparable way to track progress over time and benchmark results against national averages.
According to LEAD, single indicators such as unemployment or income do not fully capture the complexities of local economies. National datasets often lack detailed information at the county level, making it difficult for communities to understand whether their economic conditions reflect broader trends or unique local factors.
The County Economic Vitality Index uses four key indicators: annual unemployment rate, private sector annual average weekly wage, median household income, and the percentage of residents aged 25 and older with at least a high school diploma. These measures were selected based on their relevance to regional economic conditions, availability from reliable public sources, statistical independence, and consistent publication schedules that allow for trend analysis.
For educational attainment, the Index focuses on high school completion rather than college degrees. “High school completion represents a more universal economic threshold—lacking a diploma severely restricts job access and advancement, while many well-paying careers (including skilled trades and military service) don’t require college degrees,” LEAD stated in its release. This approach is intended to better capture baseline workforce readiness across different labor markets.
Each indicator is benchmarked against the U.S. average for the same year. Component scores are calculated so that 100 equals the national average; counties scoring above or below this mark are performing better or worse than national benchmarks in each category. The four component scores are then averaged equally to produce a composite score for each county.
“A composite score of 95 indicates a county is performing about 5 percent below the national benchmark across all four dimensions, while a score of 105 means it’s outperforming the nation by a similar margin,” according to LEAD.
Regression analysis comparing counties’ 2010 Index scores with subsequent growth in jobs, businesses, and population from 2011-2024 showed that higher initial scores were associated with stronger growth rates over time. However, officials caution that correlation does not establish causation.
“For example, a county scoring 10 points higher on the 2010 Index experienced, on average, roughly 10 percentage points more job growth, 14 percentage points more business establishment growth, and 10 percentage points more population growth over the following 14 years,” LEAD reported.
The full dataset is available through an interactive table where users can search for any county and compare performance year-to-year.
LEAD notes some limitations: “The Index focuses specifically on core economic fundamentals and does not account for factors such as cost of living, industry diversification, or quality-of-life measures – all of which also contribute to community economic vitality.” All factors are treated equally without weighting adjustments; while this simplifies measurement and communication within North Carolina counties due to small variances among them, weight adjustments might be needed when comparing states nationally.
Looking ahead, LEAD plans further analyses using data from the Index—including deeper dives into individual factors affecting prosperity zones within North Carolina—and benchmarking against other states nationwide.
“We look forward to continuing to share the insights the data reveals,” said LEAD representatives.
