Gross Domestic Product Growth across States

Article excerpt

07.01.09

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The Bureau of Economic Analysis recently released its annual report documenting patterns of gross domestic product (GDP) growth across states. Real GDP growth slowed in 38 states in 2008.

In states with counties in the Fourth District (Ohio, Kentucky, West Virginia, and Pennsylvania) real GDP growth varied markedly in 2008. West Virginia's growth rate (2.5 percent) was the highest of the four District states and the sixth-highest in the nation. Ohio's (-0.7 percent) was the sixth-lowest of all the states. Pennsylvania's real GDP growth was 1.1 percent, while Kentucky's was essentially flat. States that were in the upper tail of the distribution in 2008 tend to be located in the Plains Region or near the Rocky Mountains and to have significant resource extraction industries. States in the lower tail of the distribution are those with heavy-manufacturing industries, such as Michigan, Indiana, and Ohio.

Specific industrial sectors contributed systematically to differences in real GDP growth across states in 2008. Manufacturing and construction generally reduced GDP growth in Fourth District states and the United States as a whole, while professional and business services, education and health services, and the information sector raised growth. The drag of manufacturing on Ohio's and Kentucky's real GDP growth is quite substantial and reflects, in part, the weak performance of automotive-related industries. …