State’s GDP Grows 5.9% in Second Quarter
Connecticut’s economy grew 5.9% in the second quarter of 2021, led by strong gains in the accommodation and food services, information, and professional, scientific, and technical services sectors.
The state ranked 29th in the nation, with quarterly growth largely in line with the first three months of the year when the economy expanded at an annualized rate of 6%.
The U.S. Bureau of Economic Analysis reported Oct. 1 that GDP grew in all 50 states in the second quarter, with the national economy expanding 6.7%, up from 6.4% in the first quarter.
“The increase in second quarter GDP by state estimates reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic,” the agency said in a statement.
The New England states averaged 7.1% for the first quarter, up from 6.7% last quarter. Massachusetts led the region with 8% growth, the seventh best in the country.
Rhode Island saw 7.5% growth, followed by Vermont (6.5%), Connecticut, New Hampshire (5.6%), and Maine (5.5%).
“The second quarter GDP numbers reflect the the steady, middle-of-the-road pace of the state’s economic recovery,” CBIA president and CEO Chris DiPentima said.
“There are a number of factors that are hampering growth, including the labor shortage—our unemployment rate is two points above the national rate—and ongoing supply chain disruptions.
“For instance, the second quarter numbers show a significant cool down in durable goods manufacturing from the first quarter, an indication of the impact of those supply chain issues.”
DiPentima added that while CBIA’s just-released 2021 Survey of Connecticut Businesses showed cautious optimism among business leaders, workforce concerns, high business taxes, and the state’s high cost of living were cited as primary growth challenges.
Based on the second quarter numbers, Connecticut’s annualized GDP is $294.6 billion, 25% of New England’s $1.19 trillion economy, and the second largest in the region behind Massachusetts, with a GDP of $625.11 billion.
Connecticut’s accommodation and food services sector grew 1.36% to lead all sectors for the quarter. The sector grew 1.7% nationally.
Information grew 1.26%, followed by professional, scientific, and technical services (0.98%), real estate (0.64%), government (0.62%), healthcare (0.46%), finance and insurance (.41%), other services (.28%), and administrative services (0.27%).
Durable goods manufacturing grew just 0.17% after leading all sectors in the first quarter with 1.3% growth.
Retail trade contracted 0.98% while transportation declined 0.18% and agriculture shrank 0.07%.
Highest, Lowest Performing States
Nevada’s economy was the fastest growing in the country for the second consecutive quarter, expanding 9.7% through strong gains in the accommodation and food services sector, which grew 4.67%.
Hawaii’s GDP grew 8.9%, followed by Michigan (8.3%), Washington (8.2%), and California (8.1%).
Alaska experienced the slowest GDP growth of the quarter, with the economy expanding 1.8%.
Wyoming saw the second slowest growth at 2.3%, followed by Delaware (2.8%), Nebraska (2.9%), and Oklahoma (3.5%).
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