WilmingtonBiz Magazine

Sound Off: The Great Outdoors (Multiplier)

By Mouhcine Guettabi, posted Dec 14, 2023
Mouhcine Guettabi
The Wilmington region is known as a tourist destination for both its natural amenities as well as the many activities available to visitors. Increasingly, areas around the country are competing not just for firms but for talent and visitors.

With the rise of remote work, people are able to vote with their feet and spend more time on the road traveling. 

This means that it is important to allocate resources to both conventional economic development tools but also to quality of life, outdoor spaces and experiences.

The U.S. Bureau of Economic Analysis, which has devoted its resources to evaluating the traditional economy, recently started measuring the value of the outdoor recreation economy both nationally and at the state level.

To capture its value, it includes Conventional Outdoor Recreation, Other Outdoor Recreation and Supporting Outdoor Recreation, which allows for a comprehensive assessment and captures not just things like outdoor festivals but also boatbuilding and kayak manufacturing. 

The most recent estimates, from 2021, show that the outdoor recreation economy accounts for $454 billion or 1.9% of gross domestic product (GDP), indicating the importance of this segment of the economy. 

The three sectors most connected to the outdoor recreation economy were retail trade at $119.9 billion; arts, entertainment, recreation, accommodation and food services at $111.6 billion; and manufacturing at $61.8 billion. 

While outdoor recreation contributes to all states’ outputs, the one with the highest share of its GDP coming from outdoor recreation was Hawaii at 5.8%, and the one with the lowest was Connecticut at 1.3%.

In North Carolina, total wages associated with outdoor recreation were $5.9 billion, coming from 130,000 jobs. 

The recreation economy at the state level showed strong growth in 2021, with a 22.6% increase in total outdoor recreation spending that outpaced the national average of 21.7%. As of 2021, it accounts for $11.8 billion in added value, which is 1.8% of GDP.

The documentation of these impacts is important as it shows that economies are dependent on not just traditional sectors but also on amenities, quality of life and outdoor recreation. 

It also potentially provides communities with a better understanding of the drivers of economic activity that may not be easily identifiable.

While we don’t have county-level measures of the value of outdoor recreation, it is obvious that the Wilmington region is a magnet for tourists, long-term visitors and new migrants who view the area as having attractive amenities. 

Furthermore, estimates of tourism spending in Wilmington put it at more than $1 billion a year.

Population shifts from the Northeast toward the Sun Belt mean the profile of coastal areas as such Wilmington has risen, and more people will be looking to discover these areas. 

The pandemic has caused people across the country to re-evaluate work-life balance, where they want to live and how they would like to spend their money.

All of these shifts point towards continued interest in the region and increased share of the population moving toward this part of the country.

To accommodate this increased interest and given the importance of outdoor recreation to the Wilmington region, it will be important going forward to ensure that we support the sectors connected to this industry to maintain the attributes of the region that residents and visitors find most attractive.

Mouhcine Guettabi is a regional economist with UNCW’s Swain Center and an associate professor of economics at UNCW’s Cameron School of Business.
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