Economy

States with the Fastest Growing Economies

10. West Virginia
> GDP growth: 3.3% (tied for 8th highest)
> Real 2012 GDP: $56.4 billion (11th smallest)
> 1-yr. population change: 0.03% (3rd lowest)
> 1-yr. employment growth: 0.77% (17th lowest)

West Virginia’s GDP grew by 3.3% in 2012, with over a third of this growth due to the mining industry. The state was the nation’s second largest coal producer as of 2011. However, according to USA Today, the electric utilities that buy much of the state’s coal “are retiring coal-fired plants or upgrading plants to burn cheaper natural gas.” While coal producers may lose out in this shift, natural gas producers are likely to benefit. Other than coal, the state is also home to a portion of the Marcellus Shale, a geological formation where much of America’s natural gas is produced. West Virginia’s economic growth is even more impressive considering its population remained almost flat in each of the past two years.

9. Tennessee
> GDP growth: 3.3% (tied for 8th highest)
> Real 2012 GDP: $240.5 billion (18th largest)
> 1-yr. population change: 0.88% (19th highest)
> 1-yr. employment growth: 1.26% (20th highest)

Durable goods manufacturing contributed to roughly one-third of GDP growth in Tennessee in 2012, among the highest contributions of any state. Much of this growth likely came from the transportation equipment manufacturing sector, which accounts for a large portion of manufacturing jobs in the state — Nissan, Volkswagen and General Motors Co. (NYSE: GM) all have manufacturing plants in Tennessee. The sector continued to add jobs in early 2013 as well. But despite GDP growth of 3.3%, well ahead of the nationwide 2.5% growth rate, 8% of workers were unemployed in 2012, roughly in line with the 8.1% figure for the United States overall.

Also Read: The Best Cities for High-Tech Jobs

8. Indiana
> GDP growth: 3.3% (tied for 8th highest)
> Real 2012 GDP: $255.4 billion (16th largest)
> 1-yr. population change: 0.32% (15th lowest)
> 1-yr. employment growth: 0.38% (10th lowest)

Indiana’s GDP fell 6% in 2009, one of the biggest contractions in the nation. That year, the U.S. GDP fell by 3.3%. However, since then the state’s economy has been one of the fastest growing in the nation. In 2010, its GDP rose 6.4%, second highest in the nation, and in 2011 it rose by 2.2%, also among the higher rates that year. The manufacturing sector was the largest contributor to GDP growth in the state. It accounted for 15.3% of the state’s GDP last year, the second highest percentage in the nation. Durable goods output, as part of the manufacturing industry, was responsible for more than half of the state’s GDP growth in 2012. Both Honda Motor Co. Ltd. (NYSE: HMC) and Chrysler, which have manufacturing plants in Indiana, are expected to ramp up hiring in the near term.

7. Utah
> GDP growth: 3.4%
> Real 2012 GDP: $111.8 billion (18th smallest)
> 1-yr. population change: 1.45% (4th highest)
> 1-yr. employment growth: 1.76% (11th highest)

Utah’s economic output increased by 3.4%, boosted by some of the nation’s largest gains in durable goods manufacturing, retail trade and the finance and insurance sector. As the state’s economy has grown, so have job opportunities. In 2012, total employment was up 1.8% from just the year before, and the state’s unemployment rate was just 5.7%, among the lowest in the nation. Jobs in financial services, after falling for years due to the financial crisis, have recovered steadily since early 2010 and were up 3% over the 12 months ending in December 2012. In a recent report, the U.S. Chamber of Commerce ranked Utah among the nation’s most successful states at growing high-tech businesses and developing a highly skilled workforce.

6. California
> GDP growth: 3.5% (tied for 5th highest)
> Real 2012 GDP: $1.75 trillion (the largest)
> 1-yr. population change: 0.95% (18th highest)
> 1-yr. employment growth: 1.99% (7th highest)

California has the largest economy of any state in the nation, at $1.75 trillion in 2012. The state also was among the most damaged by the housing crisis during the Great Recession. In 2009, California’s economy contracted more than 5%, and grew only 0.3% and 1.2% in 2010 and 2011, respectively. According to the Federal Housing Finance Agency, as of the first quarter of 2013, home prices in the state were down by more than 16% in the past five years, compared to 9% for the nation overall. While still high, California’s unemployment rate has declined in recent years, from 12.4% in 2010 to 10.5% in 2012. Also, through a mixture of tax hikes and spending cuts, California recently recorded a budget surplus. Just three years earlier, the state had faced a deficit of nearly $60 billion.

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