Prior to and in Midst of Pandemic, which U.S. States doing Best?

Article source: ConstructConnect

Average annual U.S. ‘real’ (i.e., after accounting for inflation) gross domestic product (GDP) growth for the latest 20 years (2000 to 2019 inclusive) has been +2.1%; and for the past 10 years, +2.3%. The latest ten-year (2010 to 2019) annual average isn’t biased downwards by the 2008-2009 recession.

The eight states with the fastest annual average GDP growth rates over the past ten complete years have been: North Dakota, +4.7%; Washington, +3.6%; Texas, +3.5%; California, +3.3%; Utah, +3.2%; Colorado and Oregon, each at +3.0%; and South Carolina (+2.5%).

North Dakota’s rapid growth was front-end loaded. Bakken shale oil development sent the state’s output level soaring in 2011 and 2012, to the tune of +11.3% and +22.4% respectively. During the past seven ‘quieter’ years, North Dakota’s annual average GDP gain has been only +0.8%.

Only two states were burdened with annual average GDP growth rates that were negative in the past decade, Wyoming (-0.5%) and Alaska (-0.2%). Two others, though, managed only minimal headway, Connecticut and Louisiana, both at +0.1%. Mississippi and Delaware also didn’t have much to celebrate, each at +0.5%.

GDP Performances of Four Most Populous States

One in three Americans lives in California, Texas, New York or Florida. Furthermore, at a combined 36.6%, those four states account for a little more than one-third of U.S. total GDP.

Among the four most populous states, annual average GDP growth over the past ten years was fastest in Texas (+3.5%), with California (+3.3%) not far behind. Florida (-2.3%) advanced at the same pace as the nation as whole, and New York (+1.8%) fell a bit behind.

The long-term GDP performances of California, Texas, New York and Florida are set out in the first panel of charts.

The second panel of charts features GDP results for the four states that exhibited speediest GDP growth over the past ten years, other than Texas and California. Panel two keys on Washington (+3.6%), Utah (+3.2%), Colorado (+3.0%) and Oregon (also +3.0%).

Panel two highlights a key development in U.S. regional growth. All four of the states in panel two are in the West. They are also all high-tech hotbeds.

Leaving out North Dakota, five of the six states with the best GDP growth rates over the past ten years are in the West – Washington, California, Utah, Colorado and Oregon. All three states along the Pacific Coast are in the ‘elite’ six.

Among other states, only Texas managed to climb near the top of the leader board. Other than Texas, South Carolina (+2.5%) had the best record among non-western states.

Panel 1

10-Year Average GDP Leaders also did better in Q1

U.S. country-wide GDP change in the latest quarter (Q2) of this year was -32.9% annualized. In Q1, it had been -5.0%.

The Bureau of Economic Analysis (BEA) publishes state and industry GDP estimates, but with a several-months lag. The scheduled date for release of Q2 2020 state and industry GDP results is October 2nd.

Therefore, the analysis of most recent state GDP growth rates must be confined to Q1.

From the text boxes accompanying the graphs in panel one, only New York (-8.2%) had a Q1 result that was worse than the national average (-5.0%). Florida (-4.9%) and California (-4.7%) did not decline to quite the same degree and Texas (-2.5%) hung in relatively well.

By the way, Nebraska (-1.3%) had the top showing among all states in Q1; Nevada (-8.2%) and Hawaii (-8.1%) were at the other end of the spectrum.

As set out in panel two, Washington state’s GDP setback (-5.0%) was a match for the entire nation, but Oregon (-4.4%), Colorado (-4.1%) and especially Utah (-3.1%) avoided the full extent of the downpour.

Washington was the first state severely impacted by the arrival in America of the coronavirus. The next state to see a debilitating flareup was New York.

Panel 2

Q1 2020 GDP Changes by Industrial Sectors

Previously, it was mentioned that Nevada (-8.2% q/q annualized) and Hawaii (-8.1%) recorded the worst Q1 GDP results among all states. They were brought low by two important pockets of the economy, ‘accommodation and food services’ and ‘arts, entertainment and recreation’, that suffered through devastating declines in Q1 of -26.8% and -34.7% respectively.

The only sector with a major output increase in Q1 was ‘agriculture, forestry, fishing and hunting’, +15.5% annualized. Such a good showing helped states in the farming heartland of the country (i.e., Nebraska, South Dakota and Kansas) tread water while others were sinking.

The ‘construction’ sector’s GDP-related change in Q1 2020, as calculated by the BEA, was an acceptable-under-the circumstances +0.8% annualized.

Category: ConstructConnect

This entry was posted on Tuesday, August 4th, 2020 at 2:01 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.