Connecticut’s GDP Grew 2.1% in 2023

Connecticut’s economy expanded 2.1% in 2023, the best performance in the New England region and 31st among all states.

Regional GDP grew 1.8% last year, with the national economy growing 2.5% according to the U.S. Bureau of Economic Analysis’ quarterly GDP report.

Maine’s economy performed next best after Connecticut, growing 1.9%, followed by Massachusetts (1.8%), Rhode Island (1.6%), Vermont (1.3%), and New Hampshire (1.2%).

GDP increased in 49 states last year, ranging from 5.9% in North Dakota to Delaware, where the economy contracted 1.2%.

Connecticut GDP increased 3.1% in the fourth quarter of 2023 after growing 4.7% the previous quarter, the best performance of the year.

In 2022, Connecticut’s economy expanded 2.9%, seventh fastest in the country. Regional GDP increased 2.2% in 2022 and the U.S. economy grew 1.9%.

Job Growth

CBIA president and CEO Chris DiPentima said demand for Connecticut products and services “continues to be strong” in the wake of the pandemic.

He noted that the state’s workforce challenges remain the greatest threat to economic growth, with employers looking to fill 90,000 job openings.

Connecticut’s 12-month job growth is 0.9%, 39th in the country, while the labor force remains 24,700 people (-1.3%) below pre-pandemic levels.

“Once we see higher-performing job growth, then I think GDP will reflect that.”

CBIA’s Chris DiPentima

“Connecticut being in the middle of the pack in GDP is reflective of our amount of job growth,” he said.

“We continue to see innovation among businesses in the state. We’re just not seeing the job growth to match that demand.

“Once we see higher-performing job growth, then I think GDP will reflect that.”

U.S. year-over-year job growth is 2.6% and the national labor force has increased 1.8% above pre-pandemic levels.

Policy Solutions

DiPentima said the labor shortage reflected a number of factors—some predating the pandemic—including the lack of childcare options, a housing shortage, an aging population, and high living and business costs.

He added that state lawmakers can address some of those factors this legislative session as they consider proposals addressing childcare, housing, and the lack of affordable, quality healthcare options for small business employees.

“Filling those open jobs by making the state more affordable and expanding career pathways is key to unlocking Connecticut’s true economic potential,” he said.

State officials responded positively to the March 29 release of the GDP report.

“If you look at pre-pandemic and post-pandemic trends, we have seen an acceleration in our economic performance in Connecticut,” Department of Economic and Community Development commissioner Dan O’Keefe told the Connecticut Post.

“Compared with other states in our region, we’re seeing the best relative growth in decades. I’m excited about the trend lines.” 

Sector Growth

Connecticut’s $340.2 billion economy accounts for 24% of New England’s $1.4 trillion GDP, and is the second largest in the region behind Massachusetts ($733.9 billion).

Seventeen of the 23 Connecticut industry sectors that BEA tracks posted productivity gains in 2023, led by retail trade, which grew 0.54.

Healthcare expanded 0.43%, followed by information (0.25%), nondurable goods manufacturing (0.2%), arts, entertainment, and recreation (0.17%), utilities (0.15%), professional services (0.15%), administrative services (0.15%), transportation (0.13%), educational services (0.11%), durable goods manufacturing (0.08%), accommodation and food services (0.07%), management (0.07%), federal government (0.04%), real estate (0.02%), agriculture (0.02%), and mining (0.01%).

CT's economy grew modestly at end of 2023, but many are optimistic about the future https://t.co/uYScjQ3AGt

— Connecticut Post (@connpost) March 30, 2024

Wholesale trade was the worst performing of all sectors last year, contracting 0.2%.

State and local government shrank 0.19%, followed by finance and insurance (-0.11%), other services (-0.04%), military (-0.03%), and construction (0.01%).

North Dakota’s economy expanded 5.9% in 2023 to lead all states, followed by Texas (5.7%), Wyoming (5.4%), Alaska (5.4%), and Oklahoma (5.3%).

Delaware’s GDP declined 1.2%, the worst of the 50 states, followed by Wisconsin (0.2%), Mississippi (0.7%), New York (0.7%), and Georgia (0.8%).

Personal Income

Connecticut personal income grew 5.2% last year—19th fastest in the nation—after increasing 2.6% (27th) in 2022.

The state’s per capita personal income was $87,447 in 2023, second highest in the country after Massachusetts ($87,812). The U.S. average was $68,531, with a growth rate of 5.2%.

The New England region—with average per capita income of $82,801—averaged 4.6% growth, led by Vermont (5.5%).

Connecticut’s per capita personal income was $87,447 in 2023, second highest in the country after Massachusetts.

Personal income grew 5% in New Hampshire, followed by Maine (4.9%), Rhode Island (4.8%), and Massachusetts (4.1%).

Florida saw the fastest growth in the country, with personal income up 7%, followed by Utah (6.8%), Wyoming (6.8%), Arizona (6.5%), and South Carolina (6.5%).

Indiana’s personal income grew 3.4%, slowest of the 50 states, followed by Mississippi (3.7%), Iowa (3.7%) Arkansas (4%), and Massachusetts .