The North Carolina Department of Commerce’s Labor & Economic Analysis Division (LEAD) has introduced the County Economic Vitality Index, a new tool aimed at providing a clearer picture of economic conditions in counties across the state. The Index was developed to address gaps in available data and help answer common questions about local economic performance.
According to LEAD, single indicators such as unemployment or income often fail to capture the full story of a county’s economy. National datasets also frequently lack detail at the county level, making it difficult for communities to benchmark their progress or compare themselves to broader trends.
The County Economic Vitality Index tracks four key indicators: annual unemployment rate, private sector annual average weekly wage, median household income, and the percentage of residents age 25 and older with at least a high school diploma. These measures were chosen based on their relevance to regional economic conditions, availability from established public sources, statistical independence, and consistency over time.
“For educational attainment, the Index measures the share of adults with at least a high school diploma rather than focusing on 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. This approach better captures baseline workforce readiness across diverse local labor markets,” states LEAD.
Each indicator is benchmarked against the U.S. average for that year. Scores are calculated so that 100 equals the national average; higher or lower scores reflect performance relative to this benchmark. The four component scores are averaged equally to produce a composite score for each county.
“Equal weighting is used for transparency and simplicity: no single indicator is assumed to carry more importance than the others, and the method is straightforward to explain and replicate,” according to LEAD.
Analysis by LEAD found that counties with higher Index scores in 2010 tended to experience stronger growth in jobs, businesses, and population over the following 14 years. “A regression analysis showed a positive relationship between a county’s 2010 score and its 2011-2024 rates of growth in population, the number of private sector business establishments, and private sector employment (jobs). This suggests counties with higher Index scores experienced stronger growth in jobs, businesses, and population – indicating the Index captures underlying conditions favorable to private economic growth, though this correlation does not establish causation.”
For example, counties scoring ten points higher on the 2010 Index saw roughly ten percentage points more job growth over fourteen years.
The full dataset behind the County Economic Vitality Index is available through an interactive table allowing users to search for any county’s results over time.
LEAD notes some limitations of the tool: “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.” The methodology could be adapted for comparisons between states but may require adjustments due to larger differences across regions.
Future analyses may examine individual components in greater depth or compare North Carolina’s Prosperity Zones using this framework.
