State’s Economy Surges in Third Quarter
Connecticut’s economy expanded 3.9% in the third quarter of last year, eighth fastest in the country.
That marked the second consecutive period of economic growth after the state’s GDP grew 1.9% in the previous quarter according to a U.S. Bureau of Economic Analysis report released today.
CBIA economist Pete Gioia reacted with cautious optimism to the report, noting the state’s GDP shrank 4.4% in the first quarter after posting no growth in 2016.
“This is the second piece of good news for the state’s economy this week following Monday’s positive December jobs report,” Gioia said.
“However, we’re not there yet. Year-to-date, Connecticut GDP growth is now a very modest 1%.
“While this is a move in the right direction, we still have a long way to go to catch up to the rest of the country.”
New Hampshire Leads Region
Connecticut’s economy grew marginally more than the New England average of 3.8% and faster than the U.S., which saw 3.4% growth in the quarter.
The economies in each of the six New England states expanded by more than 3%, led by New Hampshire—which has led the region throughout 2017—with 4.4% growth.
Connecticut’s finance and insurance sector expanded 1.63% and durable goods manufacturing grew 0.58% to lead all industry sectors in the third quarter.
“Those are two key core sectors for Connecticut GDP,” Gioia said. “Their quarterly growth reflects what we saw in the jobs report, with both sectors accounting for over 80% of the 7,700 jobs added last year.”
While this is a move in the right direction, we still have a long way to go to catch up to the rest of the country.
Durable goods manufacturing increased 7.5% across the U.S. in the third quarter, with growth in all but one state.
Construction was the weakest sector in Connecticut in the third quarter, declining 0.19%, while utilities shrank 0.14%.
The state's third quarter output translates to an annual GDP of $263.8 billion—compared with $259.9 billion in 2016—or 1.4% of the U.S. economy.
Connecticut drives 26% of New England's $1.03 trillion annual GDP, and has the region's second largest economy behind Massachusetts ($530.7 billion).
At 5.7% growth, Delaware had the hottest economy of any state during the quarter, followed by Texas (5%), New Hampshire, Washington (4.3%), and New York (4%).
South Dakota's economy grew 0.5% in the quarter, the slowest of any state, with Louisiana (1.1%), Hawaii (1.3%), New Mexico (1.7%), and North Dakota (1.7%) rounding out the bottom five.
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