Manufacturing, Finance Drive Robust Second Quarter Growth

Connecticut’s economy expanded 3% in the second quarter of 2026—7th fastest in the U.S.—driven by robust growth in the manufacturing and financial services sectors. 

The state’s overall GDP was the fastest growing in New England, and showed significant improvement over first quarter growth that ranked 26th in the U.S.

The national economy expanded 2.2% in the second quarter, with GDP in the New England states growing 2.5%. 

In Connecticut, manufacturing led the way, growing at a strong 10.6%, substantially faster than the U.S. at 3.4%.

More than one-third of the state’s second-quarter economic growth came from the manufacturing sector.

“Manufacturing continues to be one of Connecticut’s greatest economic strengths, with companies finding ways to innovate, increase productivity, and grow to meet demand even with ongoing challenges,” said CBIA president and CEO Chris DiPentima.

‘Sustain This Growth’

Finance and insurance, the largest industry by output in the state, grew a healthy 4.9%, with wholesale trade (4.1%), real estate, rental and leasing (4%), and healthcare and social assistance (2.6%) rounding out the top five. 

Connecticut’s five-year annual growth rate now stands at 2.3%, slightly slower than the U.S. at 2.6% and 24^th among all states.  

Personal income continued strong growth, with 5.3% growth in the second quarter and a five-year annual growth rate of 6.1%, 9^th fastest in the country. 

Strong manufacturing output has come on the heels of strong payrolls for the sector, which has added 5,400 jobs so far in 2026.

However, further growth faces headwinds with respect to the workforce.

Connecticut’s labor force has declined 55,000 people so far in 2026. At the same time, there are more than 86,000 job openings, with more than 7,500 in manufacturing. 

“Connecticut’s growth is encouraging, but the state must address persistent labor shortages so we can sustain this growth and not give companies reasons to look outside the state to meet growing demand,” DiPentima said.

“That means addressing high living and business costs, making it easier for people to build their lives here and easier for businesses to hire, grow, and keep good jobs here.”

Sector Overview

Connecticut’s $304 billion real GDP accounts for 24.5% of New England’s $1.2 trillion economy, and is the second largest in the region behind Massachusetts ($652.5 billion). 

Fourteen of the 23 industry sectors tracked by BEA posted real growth in the second quarter, led by durable goods manufacturing, which expanded at a 15.2% annual rate. Total manufacturing output grew 10.6%. 

Utilities grew 7.7%, followed by finance and insurance (4.9%), wholesale trade (4.1%), real estate (4%), other services (3.3%), healthcare and social assistance (2.6%), educational services (1.7%), professional, scientific, and technical services (1.5%), arts, entertainment, and recreation (0.9%), and state and local government (0.1%). 

The military led all declining sectors, contracting 45.6%, followed by transportation and warehousing (-10.1%), retail trade (-4.5%), federal civilian government (-4.3%), nondurable goods manufacturing (-3.7%), administrative services (-0.5%), management of companies (-0.3%), and accommodation and food services (-0.2%). 

New York’s 4% growth led all states in the second quarter, followed by South Carolina (3.5%), Delaware (3.5%), Utah (3.4%), and Minnesota (3.4%). 

West Virginia’s economy contracted 2.3%, with Wyoming (-1.6%), Alaska (-1.3%), North Dakota (-0.9%), and Kansas (-0.6%) filling out the bottom five. 

Personal Income

Connecticut’s personal income, a key measure of economic competitiveness, grew 5.3% in the second quarter, 12th best in the nation. 

At $106,299, Connecticut’s per capita personal income remains the highest of all states, ahead of Massachusetts ($102,328) and New York ($96,276). 

New England per capita personal income rose 4.4% to $96,777, while U.S. per capita personal income grew 4.5% to $79,904. 

Connecticut’s per capita personal income remains the highest of all states.

Connecticut led New England in personal income growth, followed by Vermont (4.8%, 20th), Massachusetts (4.4%), New Hampshire (3.8%), Maine (3.6%), and Rhode Island (2%, 48th). 

Wisconsin (6.4%) saw the quarter’s largest increase, followed by Delaware (6.3%), New York (6%), West Virginia (5.8%), and Idaho (5.8%). 

North Dakota’s personal income shrank 4.2%, followed by South Dakota (1.3%), Rhode Island (2%), Oregon (2%), and Arkansas (2.2%).