The goal of the Territorial Economic Impact Index (TEII) is to identify which PITs may be more adversely affected during medium- to long-term disruptions with near real-time (and readily available) data and track their recovery over time relative to a pre-event baseline.
What is the TEII?
Large disruptive events, including the COVID-19 pandemic, often result in significant changes in employment, personal income, industry output, and other measures of economic well-being and activity. Depending on the nature of the disruption, economic consequences can be relatively short-lived or they can linger for months or years. Argonne National Laboratory (Argonne), in coordination with the U.S. Department of Interior (DOI) Office of Insular Affairs (OIA), developed the TEII to track near real-time economic impacts to United States Pacific Island Territories (PITs). While data for U.S. territories is relatively limited (especially for the PITs) compared to states and counties, Argonne leveraged available territorial and national datasets to provide impact index estimates consistent with the approach used for the County Economic Impact Index (CEII), which measures the near real time direct economic impacts of disruptions to U.S. counties.
The TEII also provides insight into economic recovery over time. A TEII value of 1 indicates that a territory’s economy is in the same position as it was in January 2020, while scores below 1 indicate that it is worse off and scores greater than 1 indicate that it has since grown. It does not account for economic growth that would have happened under normal circumstances that did not occur.
What Does the TEII Measure?
Like Argonne’s County Economic Impact Index (CEII), the TEII measures potential monthly changes in a territory’s gross domestic product (GDP) relative to a pre-event baseline based on changes in industry employment. The TEII estimates impacts to U.S. territories located in the Pacific Ocean, including American Samoa (AS), Guam, and the Commonwealth of the Northern Mariana Islands (CNMI). The index shows which territories are potentially more susceptible to large reductions in economic activity compared to normal conditions by accounting for the industrial make-up of each territory’s economy and tracking monthly changes in U.S. national employment by industry. Territories with higher concentrations of industries experiencing relatively large increases in unemployment (in the U.S. nationally) can expect larger direct impacts to their local economies, particularly if those industries contribute more to the region’s GDP. These estimated employment losses for each territory are then aggregated and adjusted by Guam’s quarterly employment change since March 2020 (end of the first quarter of 2020). To account for potential unique economic factors for Pacific territories, the index uses Guam’s actual change in employment in the absence of more frequent data releases from AS and CNMI.
Why Is the TEII Important?
The TEII provides the ability to monitor trends over time of the economic health of United States territories in the Pacific. One way to measure overall economic activity in a region is through its gross domestic product (GDP), or the monetary value of all final goods and services produced in an economy in a given year, with higher values being associated with more economic activity in a region. GDP is often used as an assessment of an economy’s overall size and health, and while certainly not a perfect indicator of overall economic wellbeing or equity, increasing GDP over time generally implies an economy is experiencing more economic activity. Decreases in GDP, on the other hand, may imply that an economy is experiencing more unemployment, lower incomes, and overall less production and spending in the economy. As such, TEII values lower than 1 may imply that more people are unemployed and businesses are producing and earning less than they were prior to COVID-19.
How Can I Use the TEII?
You can use the TEII storymap to check on the current or trending economic situation in a specific U.S. Territory. From the tabs at the top, clicking on a territory will give you a pop-up box that provides the Economic Index for the most recent month. Darker blue shades indicate less stable economies, while lighter blue shades indicate more stability. Users can also download the data to see monthly results since January 2020, as well as to see territorial impacts by industry.
Argonne National Laboratory’s work is supported by the U.S. Department of Homeland Security, Federal Emergency Management Agency, via interagency agreement through U.S. Department of Energy contract DE-AC02-06CH11357. FEMA does not endorse any nongovernment entities, organizations, or services.