Cumberland County is responsible for generating one-third of Maine’s economic output, the result of the county’s dominance in the state’s financial, health care and education sectors.
By contrast, Piscataquis County contributes less than 1 percent of the state’s gross domestic product.
The gap between the counties, revealed in new federal data, underscores the perception of two Maines: a wealthy, robust southern tip surrounded by much poorer communities to the north and west. Southernmost Cumberland and York counties alone account for 46.9 percent of the state’s GDP.
The figures released recently from the federal Bureau of Economic Analysis show that Cumberland County’s 2018 gross domestic product – an accounting of goods and services produced in the county – totaled $19.4 billion out of a statewide total of $57.2 billion. It ranks far ahead of neighboring York County, in second place with a GDP of $7.4 billion. Penobscot County, home to Bangor, is third with a GDP of $6 billion, and Kennebec County, which includes the state capital of Augusta, is fourth with $5 billion in economic activity.
Sagadahoc County is usually near the top of lists for economic activity because of the presence of Bath Iron Works, a major military contractor, but ranks 11th in the BEA’s calculation. A spokeswoman for the BEA said it books economic output as it’s generated. So the award of a $5 billion contract to build an Arleigh Burke-class destroyer that takes years to build doesn’t have as large of an impact in any one particular year as might be expected.
Piscataquis County contributed the least among the counties to the state’s economy, according to the BEA, generating GDP of $530 million in 2018, less than 1 percent of the state total. Four other Maine counties – Lincoln, Washington, Waldo and Franklin – also were low on the list, with each generating $1 billion or less in economic output last year.
Individual economic sectors in Cumberland County easily eclipsed those numbers:
• The finance industry in Cumberland County generated $4.35 billion last year.
• Professional services added another $3.2 billion.
• Health care accounted for $2.4 billion in goods and services.
The numbers “reflect the reality,” said Andrew Crawley, an assistant professor in the University of Maine’s School of Economics.
He said many counties in northern Maine have significantly older populations than those in southern Maine and, in addition to small populations, they have lower participation in the labor force because many residents have retired. That holds down economic output, he said.
“As soon as you go further south, you’ve got a younger population” and a more robust economy, Crawley said. When politicians seek ways to increase the state’s population – particularly by drawing in younger residents who will fill jobs – that’s what they are talking about, he said.
“This is a challenge the state faces,” he said. Crawley said state policies need to focus on maintaining public services, along with critical businesses, such as banks and real estate firms, in smaller communities around the state. The loss of those services and businesses could accelerate population declines, he said, and further depress economic activity.
Garret Martin, executive director of the Maine Center for Economic Policy, said a closer look at the numbers shows that Cumberland County is the only county that significantly outperforms economically compared to its population, which is about 22 percent of the state’s. On the other end, York County has 15.4 percent of the state’s population, but generates 12.9 percent of the GDP, he said.
Piscataquis County generates 0.9 percent of the economic activity in the state, but it has fewer than 17,000 residents, just 1.3 percent of the population, Martin said.
The numbers may reflect longstanding patterns of residents going outside their home counties to seek services or to make purchases more than the economic vitality of a particular county, he said.
For instance, York County’s share of the population is greater than its economic contribution, Martin said, but that may be because people in York County work in Portland or go to the state’s largest city because “Cumberland County is where people are going for health services and to get goods and services” in southern Maine. In most of the other counties in the state, GDP generally matches or comes close to matching population levels, Martin said, with a few slight variations because of the location of service centers.
Some counties that abut New Hampshire might lose economic activity because residents go over the border to avoid sales taxes, Martin said.
And beyond that, he added, it’s easy to get lost in a sense of competition when looking at how different counties are performing.
“At some level, where the people are determines where the economic activity is, but across the state, there are reasonable levels of economic activity,” he said. “Any economic activity anywhere in the state is a positive. We all benefit.”
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