REPUBLICAN-AMERICAN: State economy in cellar
BY DAVID KRECHEVSKY
Connecticut’s economy shrank for the second straight year in 2012, the only state economy in the nation to show negative growth over that period, according to a new report.
The report was issued Thursday by the U.S. Bureau of Economic Analysis, a division of the Commerce Department. It said that out of the 50 states, only Connecticut saw its real gross domestic product decrease in both 2012 and 2011, falling 0.1 percent each year.
Connecticut’s negative figure for 2011 was revised downward in the report from an original estimate that had shown 2 percent growth. The figure for 2012 is a preliminary estimate and could be revised later.
Real GDP — the output of goods and services produced — increased in all of the 49 other states and the District of Columbia in 2012, according to the report. Overall, real GDP grew 2.5 percent in the United States in 2012, following a 1.6 percent increase in 2011.
For 2011, Connecticut was one of just five states to see negative growth, according to the bureau’s revised data. The other shrinking state economies in 2011 were Louisiana at -2.6 percent, Wyoming at -2.4 percent; Mississippi at -1.1 percent, and New Mexico at -0.4 percent.
In 2012, preliminary estimates show North Dakota with the strongest economy, with an estimated 13.4 percent growth in real GDP. Texas (4.8 percent), Oregon (3.9 percent), and California and Minnesota (each at 3.5 percent) rounded out the top five.
In New England, Massachusetts showed the strongest growth in real GDP last year, at 2.2 percent, followed by Rhode Island at 1.4 percent, Vermont at 1.2 percent, and Maine and New Hampshire at 0.5 percent.
Connecticut’s economic performance last year dragged down in part by government cuts, which reduced the state’s GDP by 0.25 percent, and reductions in the financial services and insurance sector, which reduced the GDP by 0.54 percent.
While finance and insurance were a drag on the state’s economy, they were a leading contributor to the nation’s real GDP growth by state, the bureau said. Finance and insurance increased 3.6 percent in 2012, rebounding from -0.6 percent in 2011.
Meanwhile, the state’s durable goods manufacturing sector was its strongest sector, boosting the state’s GDP in 2012 by 0.46 percent. Durable goods manufacturing was also the largest contributor to U.S. real GDP by state growth in 2012. It increased 9.1 percent last year, after increasing 6.8 percent in 2011.
J.R. Romano, Connecticut state director of Americans for Prosperity,a nationwide organization that advocates for smaller government and promotes economic freedom, said the ranking is further proof the state’s economic policies are “failing our businesses and residents.”
“If you add in some of the other rankings our state has garnered — worst state to retire in, worst state to practice medicine in, and having the latest Tax Freedom Day in the country — the picture looks pretty bleak in our state,” Romano said.