The Outdoor Recreation Economy in the Fifth District

Currently, the Bureau of Economic Analysis (BEA) and Bureau of Labor Statistics (BLS) do not directly measure the contribution of the outdoor recreation sector to our national economy as measured by gross domestic product (GDP). However, this may change in the near future.

In April 2016, the secretary of the Interior, Sally Jewell, announced that the BEA and BLS were in the process of beginning to analyze the impact of outdoor recreation as part of GDP. Beginning with a one-time report, this analysis will provide greater evidence of the role that outdoor recreation plays in our national economy.

Meanwhile, the Outdoor Industry Association (OIA), a trade association consisting of many producers of outdoor apparel and supplies, is raising awareness of the economic impact of the outdoor recreation sector. The OIA has released participation reports every year since 2010 in order to bring attention to the impact this industry has, as well as the importance in supporting this sector of the economy.

According to the OIA’s 2016 participation report, people living in the South Atlantic region (a region that comprises our entire Fifth District and also includes Delaware, Georgia, and Florida) make up 19 percent of total U.S. participants in outdoor recreation – the largest share of all the census regions.

Back in 2012, the OIA released an outdoor recreation economy report and estimated that the outdoor recreation industry contributed $646 billion in consumer spending and 6.1 million direct jobs in 2012 alone. The report also included estimates for the 50 states.

The charts below show the economic impact that outdoor recreation had in each of our Fifth District states on consumer spending and direct jobs. North Carolina had the largest impact on consumer spending in 2012 at $19.2 billion and ranked second in terms of direct jobs with 191,500. South Carolina ranked first in jobs with 201,000 and had the second-largest impact on consumer spending.

While West Virginia showed the lowest levels of contribution to the Fifth District economy in absolute terms, relative to the size of the state’s economy and labor force, it had one of the largest impacts. In fact, West Virginia ranked first in the District in terms of consumer spending as a share of 2012 GDP (10.7 percent) and ranked second, behind South Carolina, in direct jobs as a share of total non-farm employment in 2012 (10.7 percent). The aptly named Mountain State supports many opportunities for outdoor recreation businesses. Even its motto of “Wild, Wonderful West Virginia” evokes an adventurous spirit.

In Lansing, W.Va., Adventures on the Gorge is a 250+ acre resort and adventure destination that offers whitewater rafting, kayaking, paddle boarding, zip lining, guided hiking, caving, and mountain biking, among many other outdoor adventures. Dave Hartvigsen, president and CEO of Adventures on the Gorge, explained how beneficial BEA and BLS reporting on the outdoor recreational economy would be:

“A basic analysis of demographic change and seeing money coming and going would show that the tourism industry is much more lucrative then what initially comes to mind. The best part of the tourism industry is that it’s a renewable resource.”

Hartvigsen goes on to explain the attractiveness of West Virginia in the tourism industry:

“Extraction has been on [a] sharp decline in the previous couple of years. With that decline, tourism and our portion of tourism (outdoor recreational) are the natural industries in this state to go to next. While West Virginia’s population density is light, there are areas of higher population density surrounding our state…we are effectively the center of the urban donut. West Virginia is a wonderful playground in the middle of all that; tourism and everything related to tourism is very healthy in attracting international visitors as well as in state visitation and cross state visitation.”  

Outdoor recreation lures international visitors to other parts of our District as well. For example, while visiting the impressive trails of Patagonia, Argentina, it is not unlikely to encounter someone familiar to our region. The many rivers throughout Virginia commonly attract South American fly fisherman, all on the hunt for sea trout, largemouth bass, and other species of fish.

In West Virginia, Hartvigsen saw even greater opportunities to attract foreign visitors, noting that Adventures on the Gorge has not “developed our international clientele nearly as well as we could,” but he remained optimistic about international traffic: 

“Europeans and the Asian markets tend to be quite adventurous. Western Europe in particular, such as the U.K., France, Germany, Italy, Spain, and Scandinavian countries all tend to be very adventurous and love to get out and see the outdoors and in many respects appreciate our national parks more than Americans do.”

While opportunities exist to grow the industry by expanding the participation of domestic and foreign tourists, the outdoor recreational economy perhaps faces its greatest challenges from the weather and the media coverage of isolated weather events.

For example, when West Virginia suffered flooding last year, the damage was broadly covered by the news, but when conditions improved, companies like Adventures on the Gorge were faced with informing the public on their own, as the news agencies “don’t come back and say it’s better,” said Hartvigsen.

Even with its challenges, the outdoor recreation industry is an important sector of the Fifth District economy, as it contributes to both overall consumer spending and employment. The exact value of that impact is currently estimated by a trade association and may soon be available from the BEA and the BLS. 

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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.