When people discuss economics, few terms are as widely used yet misunderstood as Gross Domestic Product (GDP). Some mistakenly treat GDP as a tangible asset, like a factory or a road, that a place either possesses or lacks. For example, I recently heard a radio caller say that he always asks people what the GDP in the Matanuska-Susitna (Mat-Su) Borough is, like the MatSu doesn’t have a GDP; as if it were something a region could be without. The truth is straightforward: GDP is a universal measurement, a yardstick for economic activity. Every place where people live and work has a GDP, as it quantifies the value of goods and services produced in an area. Even in the most remote regions, minimal activity, such as subsistence farming or government services, ensures a non-zero GDP. In a thriving, growing community like the Mat-Su, that value is far from negligible, reflecting the hard work of our families, farmers, and businesses.
GDP, a measure first developed in the 1930s by economist Simon Kuznets and later standardized by the United Nations System of National Accounts, measures the total market value of final goods and services produced within a specific area over a given period. It can be calculated by totaling what’s produced (value added by industries), spent (on consumption, investment, government, and net exports), or earned (through wages, profits, and rents). Simply put, GDP captures the economic pulse of a place, whether it’s a nation, state, or borough. It’s not a physical object but a tool to gauge productivity. Even an uninhabited area could theoretically have a GDP of zero if no economic activity occurs, but in practice, inhabited regions like Mat-Su always have measurable output.
The U.S. Bureau of Economic Analysis (BEA) calculates GDP for every county and county-equivalent in America, including Alaska’s boroughs. According to the BEA’s December 2024 release, the Mat-Su Borough’s nominal GDP (in current dollars) reached $4.046 billion in 2023, up from $3.733 billion in 2022. In real terms, adjusted for inflation using chained 2017 dollars, it grew to $3.226 billion, a 3.3% increase from $3.124 billion the previous year. This $319 million increase in real economic output since 2020, despite challenges like COVID-19 and inflation, underscores Mat-Su’s resilience. Among Alaska’s 30 boroughs and census areas, Mat-Su ranks fourth, trailing only Anchorage Municipality ($29.5 billion real GDP), the oil-rich North Slope Borough ($10.2 billion), and Fairbanks North Star Borough ($6.8 billion).
What fuels this growth? The private services-providing sector, including health care, retail, transportation, and hospitality, dominates, contributing roughly 70% of Mat-Su’s GDP, or about $2.25 billion in real terms in 2023. Health care and social assistance together employ over 5,000 people, from nurses at Mat-Su Regional Medical Center to social workers supporting our communities. Goods-producing industries like construction, agriculture, and mining add 14% ($0.44 billion), while government services contribute 17% ($0.54 billion). Agriculture, a cornerstone of Mat-Su’s identity, thrives through Palmer’s potato and vegetable farms, like those operated by VanderWeele Farms, which supply local markets. Tourism boosts the economy in places like Talkeetna, a gateway for Denali climbers and visitors seeking Alaska’s charm. Mat-Su’s role as a “bedroom community” for Anchorage is also key, with close to half of residents commuting, earning wages in the city and spending them locally, supporting businesses from Wasilla’s coffee shops to Palmer’s grocery stores.
The following chart illustrates the breakdown of Mat-Su’s GDP by sector for 2023
Services-Providing 70%, Goods-Producing 14%, Government 17%.
GDP matters because it provides a clear, comparable measure of economic strength. Treating GDP in the Mat-Su as a tangible asset or description implies no schools, no stores, no jobs an assertion that’s not only inaccurate but dismissive of our hardworking communities. With a population of 117,613 as of July 1, 2024, and growing faster than any other Alaskan region, Mat-Su is a powerhouse. Measuring GDP helps leaders prioritize investments in infrastructure, schools, and transportation to keep pace with this growth. It also proves Mat-Su is more than a residential hub; it’s a major economic contributor to Alaska.
Rather than asking, “What is the GDP in the Mat-Su?” the better question is, “What drives our GDP?” The answer lies in our vibrant private sector, led by health care and services, fueled by the dedication of our people. With $4 billion in output and steady growth, Mat-Su is a center of vitality and opportunity.
So let’s not denigrate or diminish the contribution the MatSu makes to Alaska. Let’s continue supporting our local businesses and advocating for investments to sustain this momentum, ensuring our borough remains a cornerstone of Alaska’s economy.
1. U.S. Bureau of Economic Analysis. “Measuring the Economy: A Primer on GDP and the National Income and Product Accounts.” https://www.bea.gov/sites/default/files/methodologies/nipa_primer.pdf
2. Federal Reserve Bank of St. Louis. “Gross Domestic Product: All Industries in Matanuska-Susitna Borough County, AK.” https://fred.stlouisfed.org/series/GDPALL02170
3. Federal Reserve Bank of St. Louis. “Real Gross Domestic Product: All Industries in Matanuska-Susitna Borough County, AK.” https://fred.stlouisfed.org/series/REALGDPALL02170
4. Federal Reserve Bank of St. Louis. “Real Gross Domestic Product: Private Services-Providing Industries in Matanuska-Susitna Borough County, AK.” https://fred.stlouisfed.org/series/REALGDPSERV02170
5. Federal Reserve Bank of St. Louis. “Real Gross Domestic Product: Private Goods-Producing Industries in Matanuska-Susitna Borough County, AK.” https://fred.stlouisfed.org/series/REALGDPGOODS02170
6. Federal Reserve Bank of St. Louis. “Real Gross Domestic Product: Government and Government Enterprises in Matanuska-Susitna Borough County, AK.” https://fred.stlouisfed.org/series/REALGDPGOVT02170
7. Alaska Department of Labor and Workforce Development. “The Resilient Mat-Su Borough.” https://live.laborstats.alaska.gov/sites/default/files/trends/jun23art2_0.pdf
8. U.S. Census Bureau. “QuickFacts: Matanuska-Susitna Borough, Alaska.” https://www.census.gov/quickfacts/fact/table/matanuskasusitnaboroughalaska/PST120224
Originally published on Substack: https://kevinjmccabe.substack.com/p/gross-domestic-product-measuring