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.
According 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.
Population and Growth Trends
After 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.
Still, 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.
Business and Entrepreneurship
The 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.
Jobs and Industry Mix
Employment 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.
Housing and Infrastructure
Housing 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.
Income and Opportunity
The 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.
Blueprint Kentucky is an initiative of the University of Kentucky’s Martin-Gatton College of Agriculture, Food and Environment.
The 2025 Report on Kentucky’s Rural Economy is available at blueprintkentucky.mgcafe.uky.edu.
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