GDP Growth Slows in First Quarter

Connecticut’s economy had a sluggish start to 2024, growing 0.7% in the first quarter—second worst in the New England region and 35th in the country. 

The U.S. Bureau of Economic Analysis’ quarterly report, released June 28, shows GDP increased in 39 states, with the national economy growing 1.4%. 

Connecticut had a similar start in 2023, with GDP growing just 0.3% in the first quarter, but ended the year with 2.1% growth—the best performance of the New England states and 31st among all states.

The New England regional economy grew 1% in the first three months of this year.

Rhode Island led the region with 3% growth—seventh best in the country—driven by strong gains in healthcare, real estate, and professional, scientific, and technical services. 

Vermont’s economy expanded 1.2%—29th best in the country, followed by Massachusetts (1%), New Hampshire (0.8%), Connecticut, and Maine (0.6%).

Solving Challenges

CBIA president and CEO Chris DiPentima said while Connecticut saw impressive economic tailwinds in 2023, this report shows signs the state’s economy is softening. 

“This is a reminder that we must remain hyper-focused on growing the state’s economy, so we don’t fall behind the region and the country,” DiPentima said.

“CBIA has spent the last few months listening to business leaders and key stakeholders on the challenges and opportunities facing Connecticut’s economy.

“They tell us the workforce shortage, creating a more efficient and transparent regulatory climate, and lowering the cost of living and doing business are key to moving the state forward.”

The state has 90,000 job openings—a 34% increase over pre-pandemic levels—while the labor force remains 16,500 (-0.9%) below pre-pandemic levels.

“Connecticut competes thanks to our highly skilled workforce, and by bringing down the cost of living and doing business, employers are able to invest in that workforce through higher wages, benefits, and training opportunities,” DiPentima said.

“Solving these challenges must be at the heart of the conversations that candidates for office are engaging in ahead of this fall’s election to continue the state’s economic momentum.”

Sector Performance

Connecticut’s $351.4 billion economy accounts for 24% of New England’s $1.44 trillion GDP, and is the second largest in the region behind Massachusetts ($759.5 billion). 

Fourteen of the 23 industry sectors that BEA tracks posted productivity gains in the first quarter, led by the finance and insurance sector, which expanded 0.61%. 

Administrative services expanded 0.31%, followed by construction (0.16%), arts, entertainment, and recreation (0.12%), military (0.12%), retail trade (0.11%), agriculture (0.09%), healthcare (0.07%), transportation (0.05%), federal government (0.05%) educational services (0.03%), wholesale trade (0.02%), and management (0.01%).

Durable goods manufacturing shrank 0.55 in the first quarter, followed by utilities (-0.20%), professional services (-0.15%), nondurable goods manufacturing (-0.08), information (-0.03%), real estate (-0.03%), and state and local government (-0.03%). 

Idaho’s economy grew 5% in the first quarter to lead the nation, followed by Nevada (4.4%), Oklahoma (4.2%), Arizona (3.2%), and Delaware (3.1%). 

South Dakota and North Dakota’s economies shrank significantly to begin the year, contracting 4.2% and 3.9%, respectively. Kansas (-3.9%), Iowa (-3.3%), and Nebraska (-3.1) followed behind with the worst performing economies for the quarter.

Personal Income

Connecticut’s personal income grew 6.1% in the first quarter—37th best in the nation—after growing 5.2% in 2023 (19th). 

U.S. personal income grew 7% to start the year after growing 5.2% last year. 

U.S. personal income grew 7% to start the year after growing 5.2% last year. 

The New England states averaged 6.3%, with Vermont’s personal income expanding 7.7%—14th best in the country. 

South Carolina (9.5%) and Delaware (9.2%) saw the country’s strongest growth since the end of the year.

North Dakota experienced the worst personal income quarterly performance among the 50 states with just 0.6% growth, followed by Nebraska (3.1%), South Dakota (3.8%), and Illinois (3.9%).