Connecticut Economy Grew 4.2% in 2021
Connecticut’s economy grew 4.2% in 2021, driven by the information services, finance and insurance, and professional services sectors.
A strong fourth quarter—GDP jumped 7.7%, 12th fastest in the country—capped off a rollercoaster ride for the state’s economy last year.
Connecticut’s GDP expanded 1.4% in the first quarter of 2021, 7.2% in the second quarter, and 2.5% in the July-September period.
The U.S. Bureau of Economic Analysis’ annual GDP report shows Connecticut’s overall 2021 economic growth ranked 36th in the country.
GDP grew in all 50 states last year following major pandemic-driven contractions in 2020, with the finance and insurance and information services sectors contributing to growth in every state.
The New England economy expanded 5.8% while U.S. GDP grew 5.7%.
The state’s economy rebounded after contracting 6.2% in 2020—third worst in the country. Regional GDP declined 4.1% in 2020 and the U.S. economy fell 3.4%.
New Hampshire led the region last year with 8.5% growth—second fastest in the country—driven by strong performances from its management, professional services, and wholesale trade sectors.
Massachusetts’ economy grew 6.4%, followed by Rhode Island (5.5%), Maine (5.2%), Connecticut, and Vermont (3.5%).
CBIA president and CEO Chris DiPentima said Connecticut’s labor shortage crisis continued to undermine the state’s pandemic recovery.
“GDP growth that’s 36th best in the country is not a true reflection of our state’s enormous economic potential,” he said.
“We have a real opportunity to rebound from the pandemic stronger than ever before—but that requires a laser-like focus from policymakers on our key challenges: the labor shortage and the state’s high cost of living and high business costs.”
DiPentima noted that CBIA’s 2022 policy priorities, developed with the collaboration of residents and employers from around the state, showcased solutions for addressing workforce challenges and tax relief.
“It’s critical that state lawmakers understand what our residents and businesses need, and implement legislation that will ease their burden and drive our economic recovery,” he said.
Connecticut’s annual GDP was $308.67 billion, 24% of New England’s $1.26 trillion economy, and the second largest in the region behind Massachusetts ($663.75 billion).
Connecticut’s information services industry grew 0.63% last year to lead all sectors. The sector expanded 0.68% in the region and 0.71% nationally.
Finance and insurance grew 0.62%, followed by professional services (0.58%), accommodation and food services (0.47%), healthcare (0.43%), wholesale trade (0.37%), administrative services (0.36%), construction (0.27%), nondurable goods manufacturing (0.16%), retail trade (0.16%), government (0.12%), durable goods manufacturing (0.1%), arts, entertainment, and recreation (0.1%), transportation and warehousing (0.06%), other services (0.6%), and management (0.02%).
The mining sector was unchanged last year while educational services contracted 0.01% and agriculture declined 0.04%.
Best, Worst States
Tennessee’s economy was the fastest growing in the country in 2021, expanding 8.6% led by strong growth in the finance and insurance, healthcare, and durable goods manufacturing sectors.
New Hampshire’s economy rebounded to post the country’s second fastest growth after contracting 2.1% in 2020.
California’s GDP grew 7.8%, followed by Nevada (7.1%) and Indiana (6.9%).
Alaska’s economy grew just 0.3%, the slowest of all states, followed by Wyoming (1.1%), North Dakota (2.1%), Oklahoma (2.2%), and Louisiana (2.4%).
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