PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Best and Worst Performers Among State Economies During the Pandemic

By at 7 April, 2022, 8:59 am

by Raymond J. Keating – 

Which state economies have performed best and worst during this pandemic?

The latest “Gross Domestic Product by State” report from the U.S. Bureau of Economic Analysis provides data from which we can find answers.

Some states obviously were hit harder in 2020 than others, and as for 2021, the recovery was uneven among the states. The following table ranks the states according to real average GDP growth during 2020 and 2021. This provides a picture for where each state stands after two years of pandemic woes.

Average Real Annual State GDP Growth, 2020 and 2021

Rank State 20-21 Real GDP Growth Average
1 Utah 3.4
2 New Hampshire 3.2
3 Washington 3.1
4 Idaho 2.8
5 Montana 2.7
6t South Dakota 2.5
6t California 2.5
8t Nebraska 2.4
8t Tennessee 2.4
10t Indiana 2.2
10t Iowa 2.2
10t Arizona 2.2
13t Maine 2.1
13t Florida 2.1
15 South Carolina 2.0
16 North Carolina 1.9
17 Arkansas 1.7
18t Massachusetts 1.4
18t Texas 1.4
18t Colorado 1.4
21 Mississippi 1.3
22 Oregon 1.2
U.S. Average 1.2
23 Rhode Island 1.1
24 Georgia 1.0
25t Kansas 0.9
25t Minnesota 0.9
25t Missouri 0.9
25t Kentucky 0.9
29 Michigan 0.8
30 Virginia 0.6
31 Alabama 0.5
32 Ohio 0.4
33t Delaware 0.2
33t New Jersey 0.2
35t West Virginia 0.1
35t New Mexico 0.1
37t New York 0.0
37t Pennsylvania 0.0
37t Illinois 0.0
40 Wisconsin -0.1
41 Nevada -0.2
42 Vermont -0.4
43 North Dakota -0.5
44 Maryland -0.7
45 Connecticut -1.0
46 Oklahoma -1.4
47 Louisiana -1.7
48 Wyoming -2.5
49 Alaska -2.9
50 Hawaii -3.1

 

As noted in the table, the average growth rate for the U.S. was 1.2 percent. Twenty-two states beat or matched that average growth rate, with 28 coming in worse.

Among the best performers, three states had average growth rates exceeding 3 percent:

● Utah at 3.4 percent

● New Hampshire at 3.2 percent

● Washington 3.1 percent.

Nine states had average growth rates at or better than double the U.S. average.

Among the worst performers, one state experienced a negative growth rate of at least -3 percent, that is, Hawaii at -3.1 percent. Eleven states experienced negative average growth, and another three states experienced no growth whatsoever.

As for the four largest states, California (2.5 percent), Florida (2.1 percent) and Texas (1.4 percent) each came in ahead of the U.S. average (again, 1.2 percent), while New York (0.0 percent) trailed notably.

Also, keep in mind that the U.S. economy normally averages real GDP growth in excess of 3 percent annually. Therefore, except for the very top performers, most states have lost ground that needs to be recaptured, with the amount of lost ground quite substantial for many states.

Therefore, it’s critical not only for federal lawmakers to create a pro-entrepreneur, pro-investment policy climate to incentivize and encourage growth, but for state lawmakers to do so as well.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

 

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