State’s Economy Expands 2.4% in 2025

Connecticut’s economy expanded 2.4% in 2025, 12^th fastest among all states despite a challenging beginning and end to the year. 

The U.S. Bureau of Economic Analysis’ April 9 report showed a slowdown in the fourth quarter to 0.5%, following rapid third quarter growth of 5.6%.

The year overall was bookended by slower growth, with first quarter output at 0.3% annualized, largely due to federal policy shifts around tariffs. 

On an industry level, Connecticut’s economy was driven by transportation and warehousing, professional services, arts, entertainment, and recreation, durable goods manufacturing, and wholesale trade. 

Connecticut was the second fastest growing economy in New England behind Massachusetts, which grew at a 2.4% clip.

The New England economy grew 2.2% in 2025, with U.S. GDP expanding 2.1%. 

‘Resilience’

CBIA president and CEO Chris DiPentima said the GDP report “highlights the resilience of Connecticut’s economy despite a significant slowdown in the fourth quarter.”  

“It’s encouraging to see key industries like transportation and warehousing, professional services, and durable goods manufacturing driving overall growth in 2025,” he said.

“Connecticut’s growth underscores the innovation and adaptability of our employers and employees amid rising costs and ongoing economic uncertainty.”

DiPentima added that the fourth quarter slowdown “highlights the ongoing headwinds that are challenging the state’s economic growth.”

“This must serve as a reminder to state lawmakers that the policies they adopt this session must offset the growing uncertainty and volatility at the federal level,” he said.

“Labor force challenges and rising costs—from energy to healthcare—remain key barriers to growth, especially for small businesses. 

“For Connecticut to build on the momentum from 2025, it’s critical that we focus on policies that support business and make it more affordable for employers to innovate and invest in their companies and employees.”

Sector Overview 

Connecticut’s $293 billion real GDP accounts for 24% of New England’s $1.2 trillion economy, and is the second largest in the region behind Massachusetts ($644.2 billion).

Thirteen of the industry supersectors tracked by BEA posted real growth in 2025, led by transportation and warehousing, which expanded 8.8%.

Professional, scientific, and technical services grew 5.2%, followed by arts, entertainment, and recreation (4.3%), durable goods manufacturing (4.3%), wholesale trade (3.4%), healthcare and social assistance (3.4%), real estate (2.2%), construction (2.1%), administrative services (1.9%), finance and insurance (1.7%), state and local government (1.7%), military (0.8%), and mining (6.8%).

Connecticut’s $293 billion GDP accounts for 24% of New England’s $1.2 trillion economy.

Total manufacturing output grew 2.1% last year despite sector payrolls declining 2.1% between December 2024 and December 2025.

Eight sectors contracted, led by federal civilian government (-5.5%), nondurable goods manufacturing (-5.2%), utilities (-2.1%), other services (-1.4%), accommodation and food services (-1.2%), retail trade (-1.2%), educational services (-0.5%), and management of companies (-0.4%).

At 3.1% growth, South Carolina had the country’s fastest economy in 2025, followed by Florida (3.1%), New York (2.9%), Utah (2.8%), and Alaska (2.8%).

North Dakota’s economy grew just 0.3%, with D.C. (0.4%), Wyoming (0.5%), West Virginia (0.5%), and Maine (0.6%) filling out the bottom five.

Personal Income 

Connecticut’s personal income, a key measure of economic competitiveness, grew 4.4% in 2025—39th in the nation—growing 4.6% in the first quarter, 4.5% in the second quarter, 4.3% in the third, and 4.2% in the fourth. 

At $98,879, Connecticut’s per capita personal income is the highest among all states, surpassing Massachusetts ($97,456) to reclaim the top spot.

Connecticut trailed Massachusetts in 2024 ($95,083 vs. $93,575) but stronger per capita gains reversed the ranking. Only the District of Columbia ($116,121) is higher. 

Connecticut’s per capita personal income is the highest among all states.

New England per capita personal income rose to $91,818, while U.S. per capita personal income grew to $76,393. 

New Hampshire posted 5% personal income growth (18th), followed by Rhode Island (5%; 22nd), Maine (4.7%; 28th), Connecticut (4.4%; 39th), Massachusetts (4.4%; 40th), and Vermont (4%; 47th). 

South Dakota (5.9%) saw the year’s largest increase, followed by North Carolina (5.8%), Kansas (5.8%), South Carolina (5.7%), and Delaware (5.6%). 

The District of Columbia experienced the weakest personal income growth at 3.2%, followed by Maryland (3.3%), Louisiana (3.8%), Vermont (4.0%), and Wyoming (4.1%). 

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For more information, contact Dustin Nord, director of the CBIA Foundation for Economic Growth & Opportunity.