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States With the Top GDP Growth

Washington, Colorado, Nevada, Arizona and Utah were among those with particularly strong GDP gains.

seattle construction1
Construction in Seattle. Washington State had the top GDP growth in the country last year.
(Shutterstock)
Federal data released Friday show that the gross domestic product climbed significantly across several states last year.

The preliminary estimates from the Bureau of Economic Analysis indicate all but three states recorded at least slight increases in real GDP between 2016 and 2017. Nationally, GDP rose 2.1 percent last year.



 
SOURCE: U.S. Bureau of Economic Analysis
Year-over-year real GDP grew at the fastest rate in the following states: 

Washington

Washington state’s real GDP jumped 4.4 percent last year, by far the largest increase of any state.

Retail trade isn’t a top source of economic growth in most places. But in Washington, it was a major factor last year due to the continued expansion of e-commerce. Steve Lerch, chief economist with the Washington State Economic and Revenue Forecast Council, singled out Amazon’s rapid growth.

Telecommunications and software companies, particularly Apple and Microsoft, played supporting roles. Lerch cited construction activity in the Puget Sound region as another driver. Other high-wage sectors, such as aerospace and professional and business services, further propelled the state’s economy.

The State Economic and Revenue Forecast Council projects strong personal income gains coupled with 2.2 percent employment growth for this year as more people relocate to the Seattle area.

Colorado

Colorado recorded the second-highest annual GDP growth, up 3.6 percent for the year.

The gains were largely a result of an upswing in oil and gas production, according to Ryan Gedney, senior economist with the state labor department. Much of the increased activity took place in Greely and Grand Junction, while the companies are commonly managed from offices in Denver.  

A strong real estate sector further helped to boost the state’s economy. While the Denver region remains the epicenter of the housing boom, Gedney says it’s spreading to Colorado Springs and Fort Collins as well. “There’s a huge demand for housing, and construction is rampant,” he says.

Before the downturn in Colorado’s energy sector in 2016, the state had consistently ranked as one of the fastest-growing economies nationally. After rebounding last year, it appears unlikely to experience a slowdown anytime soon. “We’re going to see more of the same as long as there’s a stabilization of the mining sector,” Gedney says. “Employment is really growing strong.”

Nevada

Nevada’s GDP growth similarly accelerated significantly, up 3.5 percent last year after increasing 2.1 percent in 2016.

The BEA data depict expansion across the state’s economy, with real GDP increasing for nearly every major industry. Real estate served as the largest contributor to overall GDP, followed by durable goods manufacturing.

Tourism remains strong in Las Vegas, where construction of a new football stadium is now underway. To the north, the Reno-Sparks metropolitan area has attracted a slew of major companies in recent years, many of which are still ramping up operations.  

Nevada’s GDP numbers also reflect steady in-migration to the state. According to Census estimates, its population climbed 2 percent last year, that largest increase nationally behind only Idaho.

Arizona

Solid job and population gains pushed up real GDP by 3.2 percent in Arizona last year.

BEA data show broad-based growth for the state, with no single sector standing out. The two largest contributors to the increase were health care and retail trade.

The fast-growing Phoenix region serves as the focal point for the growth. Maricopa County added roughly 74,000 people last year, easily the largest net increase of any U.S. county, according to Census Bureau estimates.

An Arizona State University forecast estimates net job growth of 69,000 this year, up from 63,000 in 2017. To meet the demand for housing in Phoenix, the construction sector is expected to expand significantly, with consensus estimates calling for 6.4 percent job growth for the year.

Utah

Utah’s real GDP ticked up an estimated 3.1 percent in 2017, continuing several years of steady growth.

BEA’s figures identified professional, scientific and technical services as the largest contributor to the state’s GDP growth, followed by health care and retail trade. The arrival of numerous large technology companies and newer startups in the Provo-Orem area are driving much of the economic gains, while the rest of the state also continues to benefit from strong tourism.

Steep population gains explain much of the state’s GDP numbers. Utah has been one of the fastest-growing states for years, with the latest Census estimates showing a nearly 2 percent increase for 2017. On a per capita basis, Utah’s GDP rose just 1.2 percent for the year, mirroring the national rate.

States with top per capita GDP growth

The two states with the largest increases on a per capita basis – West Virginia and Wyoming – both benefitted from energy sectors that rebounded last year.

In Wyoming, oil and coal production was the lone bright spot for the state, driving all of the GDP gains. GDP for the mining sector increased $1.1 billion last year, while it collectively declined for all other industries. While energy production has rebounded a bit, it still remains limited by low natural gas prices and competition from other states, such as Pennsylvania and Texas, where production is cheaper, says Wenlin Liu, chief economist with the state economic analysis division.

West Virginia’s mining sector was similarly responsible for the vast majority of the state’s overall GDP increase. Only the construction and health care industries experienced marginal gains, while others remained unchanged or contracted.

West Virginia and Wyoming’s per capita GDP totals are also somewhat inflated by workers migrating out of the state – both lost total population last year.

State GDP Data



State 2016-17 Real GDP 2016-17 Real GDP Per Capita
Alabama 1.2% 0.9%
Alaska 0.2% 0.5%
Arizona 3.2% 1.7%
Arkansas 1.1% 0.6%
California 3.0% 2.3%
Colorado 3.6% 2.2%
Connecticut -0.2% -0.2%
Delaware 1.6% 0.6%
District of Columbia 1.7% 0.3%
Florida 2.2% 0.6%
Georgia 2.7% 1.5%
Hawaii 1.7% 1.7%
Idaho 2.7% 0.5%
Illinois 1.2% 1.5%
Indiana 2.1% 1.6%
Iowa 0.5% 0.1%
Kansas -0.1% -0.2%
Kentucky 1.8% 1.4%
Louisiana -0.2% -0.2%
Maine 1.4% 1.0%
Maryland 1.5% 1.1%
Massachusetts 2.6% 2.0%
Michigan 2.3% 2.0%
Minnesota 1.9% 0.9%
Mississippi 0.3% 0.3%
Missouri 1.1% 0.7%
Montana 0.6% -0.5%
Nebraska 0.6% 0.0%
Nevada 3.5% 1.5%
New Hampshire 1.9% 1.3%
New Jersey 0.9% 0.6%
New Mexico 0.8% 0.7%
New York 1.1% 1.1%
North Carolina 2.3% 1.2%
North Dakota 1.0% 1.0%
Ohio 1.9% 1.6%
Oklahoma 0.5% 0.3%
Oregon 2.5% 1.1%
Pennsylvania 1.8% 1.7%
Rhode Island 1.6% 1.4%
South Carolina 2.3% 1.0%
South Dakota 0.3% -0.6%
Tennessee 2.5% 1.4%
Texas 2.6% 1.2%
Utah 3.1% 1.2%
Vermont 1.1% 1.1%
Virginia 2.0% 1.3%
Washington 4.4% 2.7%
West Virginia 2.6% 3.3%
Wisconsin 1.7% 1.3%
Wyoming 2.0% 3.0%
Source: U.S. Bureau of Economic Analysis. Estimates are preliminary.
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