By State’s Own Measure, Economy Ranks 32nd
The Connecticut economy gained seven spots in the state’s own annual ranking of state economies but still trails much of the nation and New England.
Prepared by the state Department of Labor, the State Economic Indexes report ranked Connecticut 32nd overall in 2016—up from 39th the previous year—among the 50 states and the District of Columbia.
The annual composite index, which measures the overall economic strength of each state, is based on business growth, job creation, wage growth, and unemployment.
Connecticut’s 2016 index was 120.5. That’s below the nationwide value of 124.5, although the state’s overall ranking represents its best performance in six years.
“This SEI report shows that the Connecticut economy still has a long way to go to catch up with most Northeast region states,” said CBIA Economist Pete Gioia.
Will Budget Crisis Impact Growth?
Connecticut’s SEI index has increased 20.5% overall since 2010, when the economic recovery began. However, nationwide growth during that same period was 24.5%.
“Based on SEI calculations, Connecticut’s move up to 32nd place is an encouraging sign,” the report’s authors noted in the October 2017 Connecticut Economic Digest.
“However, with the ongoing budget crisis, it remains to be seen if our state’s economy will improve by the end of this year.”
Connecticut is the only state in the country yet to approve a state budget this year.
The state’s economic index mirrors CNBC’s latest America’s Top States for Business study—the most widely recognized national independent ranking—which ranked Connecticut 33rd this year.
While Connecticut continues to be among the leaders in wages—its annual average salary of $65,875 exceeds the national average of $53,611—the SEI report found it still trails most of the nation in business starts, wage gains, job growth, and unemployment.
The state ranked 35th in 2016 for business growth rate, 42nd in wage gains, 46th in job growth, and 34th for unemployment.
With the ongoing budget crisis, it remains to be seen if our state's economy will improve by the end of this year.
New Hampshire was the highest placed of the New England states in the SEI report, ranked seventh with an index of 131.7.
Rhode Island was ninth (130.2), Massachusetts 10th (129.8), Maine 11th (129.3), and Vermont was 38th (118.2).
Colorado finished first in the index with a rating of 145.2, while Wyoming was last at 102.6.
Business and labor conditions improved in only 29 states from 2015 to 2016, possibly reflecting an economic slowdown, the report said. By contrast, 45 states made gains from 2014 to 2015.
States that saw the largest percentage increase year-over-year were New Hampshire, Massachusetts, and Arkansas.
Connecticut's year-over-year growth was 1.9%, ranking it 16th in that category. Every state and D.C. saw growth from 2015 to 2016, the report says.
The report also noted that falling index numbers in 2016 point to "the probability of a further slowdown of the national economy."
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