A recent study provides an in-depth analysis of economic developments across rural regions of Kentucky. Published by Blueprint Kentucky, the 2025 Rural Economy Report evaluates demographic patterns, employment dynamics, and business activity in 85 non-urban counties. n nKey sectors such as manufacturing, healthcare, and retail continue to dominate the rural job market, contributing significantly to regional economic output. Despite this, rural communities still fall behind their urban counterparts in income levels, business formation, and housing development. n nPopulation and Growth Patterns n nFollowing a period of decline from 2011 to 2019, rural Kentucky experienced modest population growth between 2020 and 2024. This rebound was largely driven by migration to counties adjacent to metropolitan areas and the rise of remote work arrangements. n nHowever, economic expansion remains uneven. Between 2001 and 2023, inflation-adjusted GDP in rural areas increased by 18%, compared to a 49% rise in urban centers, highlighting a persistent development gap. n nBusiness Formation and Entrepreneurial Activity n nSmall and medium-sized enterprises represent a larger portion of the economy in rural counties than in cities. Nevertheless, new business applications remain lower in non-urban regions. In 2023, urban areas recorded 13.6 applications per 1,000 residents, while rural areas reported only 9.8 per 1,000. n nEmployment and Sectoral Composition n nA significant share of rural employment is concentrated in retail, manufacturing, and health and social services, which together account for nearly half of all jobs in these areas. Collectively, rural counties contribute about one-third of the state’s total employment. n nHousing and Infrastructure Challenges n nHomeownership rates are higher in rural regions, but so are vacancy rates, which stand at roughly three times those in urban areas. Many rural communities struggle with a lack of modern, affordable housing near employment centers and essential services. n nIncome Disparities and Economic Opportunity n nThe report underscores ongoing income inequality. On average, individuals in rural counties earn 26% less than their urban peers, while those with bachelor’s degrees earn approximately 40% less. These differences are largely tied to the concentration of lower-wage industries and point to the need for broader economic diversification. n nBlueprint Kentucky operates under the University of Kentucky’s Martin-Gatton College of Agriculture, Food and Environment, aiming to support data-driven policy and regional development. n— news from kychamberbottomline.com
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New Report Highlights Key Economic Trends and Challenges in Rural Kentucky
New research offers a comprehensive look at how Kentucky’s rural economy is evolving. Released this week by Blueprint Kentucky, the 2025 report on Kentucky’s Rural Economy analyzes areas including population, employment, and business trends across 85 rural counties. n nAccording to the report, manufacturing, health care, and retail remain among the largest sectors in rural Kentucky, accounting for a significant share of jobs and economic output. However, rural areas continue to trail urban parts of the state in business activity, income, and housing development. n nPopulation and Growth Trends n nAfter several years of population decline between 2011 and 2019, rural Kentucky began to grow again between 2020 and 2024. Much of this increase came from people moving to counties near urban centers and the increase in remote and hybrid work. n nStill, rural areas face slower overall economic growth. According to the report, from 2001 to 2023, inflation-adjusted GDP grew 18% in rural Kentucky and 49% in urban areas. n nBusiness and Entrepreneurship n nThe report shows that small and mid-sized businesses make up a larger share of rural Kentucky’s economy than in urban areas. However, new business activity continues to lag behind urban regions. In 2023, urban Kentucky recorded 13.6 business applications per 1,000 residents, while rural areas reported 9.8. n nJobs and Industry Mix n nEmployment in rural Kentucky is concentrated in a few major industries. Nearly half of all rural jobs are in retail trade, manufacturing, and health care and social assistance. Overall, rural counties account for about one-third of Kentucky’s total employment, according to the report. n nHousing and Infrastructure n nHousing is another key factor shaping rural growth. The report finds that while rural areas have higher homeownership rates than urban regions, they also have roughly three times the housing vacancy rate. The report indicates that many rural areas face limited availability of modern, affordable homes close to jobs and services. n nIncome and Opportunity n nThe report shows that income gaps remain a challenge. On average, rural residents earn about 26% less per person than those in urban counties, and workers with a bachelor’s degree earn roughly 40% less than those in urban areas. The report notes that these income differences often reflect the types of industries most prevalent in rural areas and point to the need to grow more diverse, higher-wage opportunities across the state. n nBlueprint Kentucky is an initiative of the University of Kentucky’s Martin-Gatton College of Agriculture, Food and Environment.