State’s Economy Grew 3.1% in Second Quarter
Connecticut’s economy posted its second consecutive quarter of growth April through June, expanding 3.1% according to a preliminary report from the U.S. Bureau of Economic Analysis.
The BEA report shows the state’s second quarter GDP growth ranked 43rd in the country, with the U.S. economy expanding 4.2% for the quarter.
The six New England states averaged 3.7% quarterly growth after expanding 2.9% in the previous three months.
New Hampshire led the region with 4.6% growth, eighth fastest in the country, boosted by its surging manufacturing and real estate sectors.
Massachusetts posted 4% GDP growth, followed by Maine (3.4%), Vermont (3.4%), Connecticut, and Rhode Island (2.8%).
Connecticut saw 1.1% GDP growth in the first quarter of this year after contracting 1.1% overall in 2017—the fourth year of negative growth in the last five.
CBIA economic adviser Pete Gioia was encouraged by the first and second quarter GDP numbers.
“Over the last 10 years, the U.S. economy grew 15.5%, while Connecticut’s GDP actually shrank by 9%,” Gioia said.
“These last two quarters represent a positive step forward, particularly when coupled with the impressive job gains of the last 12 months.”
Gioia says there is a direct correlation between those growth numbers and what happened—and did not happen—during the last two legislative sessions.
For the legislature to pivot away from tax hikes and workplace mandates in the last two years clearly had a positive impact.
"The 2011 and 2015 tax hikes were terribly damaging to our economy and for the legislature to pivot away from tax hikes and workplace mandates in the last two years clearly had a positive impact.
"The key now is for the new administration and General Assembly to maintain that focus on fixing our fiscal problems, improving the state's business climate, and expanding workforce development efforts."
The state's real estate sector expanded 0.7% in the second quarter to lead all sectors, followed by information (0.7%), professional, scientific, and technical services (0.66%), durable goods manufacturing (o.41%), and healthcare (0.32%).
Five industry sectors saw negative growth, with finance and insurance—one of the state's key economic drivers—contracting 0.42%.
Non-durable goods manufacturing contracted 0.1%, followed by retail (-0.09%), government (-0.07%), and agriculture (-0.02%).
The state's second quarter output translates to an annual GDP of $272.7 billion—compared with $264.5 billion in 2017—or 1.3% of the U.S. economy.
Connecticut drives 25% of New England's $1.07 trillion annual GDP, and has the region's second largest economy behind Massachusetts ($569 billion).
At 6% growth, Texas had the hottest economy of any state during the quarter, followed by Michigan (5.4%), Missouri (5.1%), Minnesota (5%), and Colorado (4.9%).
Delaware's quarterly economic growth was 2.5%, the slowest of any state, with New Mexico (2.7%), Wisconsin (2.8%), Rhode Island, and Idaho (3%) rounding out the bottom five.
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