MOBILE — Editor’s Note: This is the last of three articles Gulf Coast Newspapers is publishing regarding issues that will be examined at the Coastal Economy Outlook. The half-day meeting is sponsored by the University of South Alabama Center for Real Estate Studies, Envision Coastal Alabama, Mobile Area Chamber of Commerce, Baldwin County Economic Development Alliance and the USA Center for Continuing Education.

The Coastal Economic Outlook scheduled for Tuesday, Sept. 30, in the Arthur Outlaw Convention Center, will contain a discussion of the Mobile and Baldwin economy. Called the “GNP Indicators,” both are estimates of the local level of personal income following a procedure developed and used by the U.S. Commerce Department. They estimate the widely known Gross National Product that appears regularly in the national media.

Movements in the local economy are measured to determine the direction and strength of change. Is Baldwin moving in a positive direction? If yes, how much is the change? Should economic development personnel concentrate on the recruitment of new industry to create more jobs, and if so, what type? Where should government funds be spent? Have past government expenditures be effective? How do we compare to Pensacola, Biloxi, or Jacksonville? All are relevant questions that are answered by measurements in the local economy.

The measurement of economic activity is not always a topic that has priority at dinner conversation. It frequently does not rank well in comparison with the latest football scores. However, it will become important should the level of unemployment suddenly jump to 10 percent, and retaining a job becomes a concern. In addition, economic activity performance measures are difficult to develop, expensive to maintain and not always easy to interpret. Once a decision is made to develop a measurement tool, the initial step is to find agreement among all users. All interested parties must understand the construction technique and the data used. Also, they must agree to use it and incorporate the results in the assessment of policy decisions.

One effort recently undertaken for the seven metropolitan areas in Tennessee, with financial support from that governor’s office, approximates the level of personal income earned by the community. Personal income is a good indicator of local well-being as it reflects the total amount of purchasing power held by the local Tennessee workforce. Local estimates are available from the federal government on the larger metro areas only. Also, a major drawback is that the latest federal figures are two years old, and serve a measure of where the economy has been.

A measurement tool must be as current as possible. It must be relatively inexpensive to construct. It must be constructed from readily available data. It should be easily understood by all users. It should be theoretically correct and supported by traditional and recognizable factors that cause regional growth. Each of these points becomes a challenge in Baldwin County as it is not part of the metro statistical area, which means that data is more difficult to locate.

The “Baldwin GNP Indicator” was constructed several years ago and covers the Baldwin economy from 1990 to the current date. It is based on the idea that the overall welfare of the community depends directly on the amount of employed workforce wages, salaries and other income. Overall employee income reflects the ability of the community to purchase local goods and services. Growth in this income may be viewed as an increase in value that has been added to the economy.

The most important number is the change from one period to another. An absolute level, say, of 106.9 is not as important as the relative change. Comparing this number to the same number one year earlier, 102.98, means that the total level of worker income in the Baldwin economy increased 3.98 percent. This positive change must come from an increased level of employment earning additional wages and salaries. Other changes are shown in the table above.

Total worker income and economic activity has grown 3.98 percent in the last year and 21.05 percent over the last 5 years. Although growth slowed to .05 percent between the last two quarters, the Baldwin economy grew an average of 4.21 percent annually without inflation. Inflation would add another 2.5-3 percent for a total 6.5-7.5 percent. These numbers are very impressive when compared to a much lower growth at the national level.

These results can be advertised locally and nationally to illustrate to any interested user that the local economy has experienced growth, and it is being measured to assess progress. This activity should enable this region to compete for attention with other groups who are in the competition for future new employees.

This growth estimate satisfies the five criteria that must be followed. First, it is constructed from employment and wage data published regularly by the state. It is constructed from the most current data available. The construction technique is easily understood as it is exactly the same as the popular Consumer Price Index. It is theoretically correct as it incorporates both income and employment levels that are produced by all traditional theories of local economic growth. It is a tool that is defendable and easily useable.

This report and others on the Baldwin economy can be found on the Web site of the USA Center of Real Estate Studies at http://cres.southalabama.edu, under “Baldwin Market Watch.” Other reports on the residential and commercial real estate market are available, also.

Interested in additional economic facts and opinions on the local economy? Come to the Coastal Economic Outlook, Tuesday, Sept. 30. The featured speaker is Ms. Sheila Bair, Chair, Federal Deposit Insurance Corp., Washington, D.C. She is one of the chief regulatory authorities on bank insurance, and recently voted as the second most powerful woman in the world by Forbes magazine.

To register, fax the brochure on the Web site (http://cres.southalabama.edu), or call (251) 431-6536. Register early as walk-ins are not accepted.