State’s Economy Posts Third Straight Quarter of Growth
Connecticut’s economy grew 3.3% in the third quarter of 2018, expanding for the third consecutive quarter according to the U.S. Bureau of Economic Analysis.
The state’s third quarter GDP growth ranked 21st in the country according to the BEA’s latest report, after growing 3.1% the previous quarter and 1.1% in the first three months of the year.
U.S. economic growth saw a marked cooling in the quarter, growing 3.4% after expanding 4.2% the previous quarter.
The six New England states averaged 3.3% quarterly growth after growing 3.7% the previous three months.
New Hampshire’s economy continued performing strongly, leading the region with 3.7% growth for the third quarter, 10th fastest in the country.
Massachusetts posted 3.5% GDP growth, followed by Connecticut, Rhode Island (2.9%), Maine (2.6%), and Vermont (2.2%).
Can Connecticut Keep Pace?
CBIA economic adviser Pete Gioia said while the state’s economic performance through the first three quarters of 2018 was encouraging, Connecticut’s post-recession growth still lags the region and the country.
“From 2007 through 2017, the U.S. economy grew 15.5%, while Connecticut’s GDP actually shrank 9%,” Gioia said.
“Connecticut kept pace with the region and the country in the third quarter of last year, which is important, but more needs to be done to support businesses in this state so we keep pace over the long term.”
With so much new anti-business legislation and the potential effects of major tax changes, will Connecticut be able to sustain growth?
"For the legislature to pivot away from tax hikes and workplace mandates in the last two years clearly had a positive impact on economic growth," Gioia said.
"However, with so much new anti-business legislation proposed and the potential effects of major tax changes on consumer confidence, will Connecticut be able to sustain growth or will we fall further behind?"
Finance and insurance, one of the state's economic drivers, led all sectors for the quarter, followed by non durable goods manufacturing (0.46%), information (0.38%), wholesale trade (o.41%), and professional, scientific, and technical services (0.32%).
Durable goods manufacturing, another key sector, grew 0.11% in the third quarter after posting 0.41% growth the previous quarter.
Three sectors saw negative growth, with real estate contracting 0.13% after leading all sectors with 0.7% growth in the second quarter.
Utilities contracted 0.07% and other services shrank 0.02%. Mining was flat for the quarter and agriculture grew 0.03%.
The state's third quarter output translates to an annual GDP of $276.1 billion—compared with $264.5 billion in 2017—or 1.3% of the U.S. economy.
Connecticut drives 25% of New England's $1.1 trillion annual GDP, and has the region's second largest economy behind Massachusetts ($576.6 billion).
At 5.8% growth, Washington had the hottest economy of any state during the quarter, followed by Utah (4.4%), Arizona (4.3%), Nevada (4.1%), and Idaho (3.9%).
West Virginia's economy was flat for the quarter, the slowest of any state, with Alaska (1%), Wyoming (1.8%), North Carolina (1.8%), and Arkansas (1.9%) rounding out the bottom five.
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