States with the Fastest Growing Economies

5. Minnesota
> GDP growth: 3.5% (tied for 5th highest)
> Real 2012 GDP: $253.0 billion (17th largest)
> 1-yr. population change: 0.60% (25th lowest)
> 1-yr. employment growth: 0.88% (23rd lowest)

Minnesota had one of the nation’s lowest unemployment rates in 2012, at just 5.6%, and one of its highest GDP growth rates, at 3.5%. Finance and insurance contributed 0.63 percentage points to the state’s growth — more than all but four other states and roughly twice the industry’s contribution nationwide. Currently, the finance and insurance sector accounts for almost 10% of the state’s GDP, among the higher percentages of all states. However, this relatively robust GDP growth did not translate into an equally robust jobs growth; more than half of all states grew jobs at a faster pace than Minnesota.

Also Read: States With the Most Government Benefits

4. Washington
> GDP growth: 3.6%
> Real 2012 GDP: $324.2 billion (14th largest)
> 1-yr. population change: 1.08% (11th highest)
> 1-yr. employment growth: 1.12% (22nd highest)

Washington has made considerable efforts to become a major exporter, according to Bernstein. This has allowed the state to become less dependent on U.S. consumers and companies for business, and to “be nimble enough to take products to where the growth is.” In addition to exports, Washington’s information sector contributed nearly one-third of its GDP growth in 2012, the most of any state. The sector accounted for 9% of GDP in 2012, also the most of any state. However, information sector employment has been flat in recent years, with no employment growth recorded in 2012.

3. Oregon
> GDP growth: 3.9%
> Real 2012 GDP: $187.4 billion (25th largest)
> 1-yr. population change: 0.80% (21st highest)
> 1-yr. employment growth: 0.35% (8th lowest)

In each year since 2010, Oregon has been one of the fastest growing states in America. Similar to several other fast-growing states, a revival in durable goods manufacturing has contributed considerably to GDP growth. Last year, durable goods manufacturing was responsible for roughly three-quarters of Oregon’s GDP rise, the highest contribution in the nation. Overall manufacturing made up nearly 28% of Oregon’s output in 2012, while one-fourth of the state’s output was due to durable goods manufacturing, the highest percentage in the nation. Much of this durable good manufacturing was in computers and electronics components, often produced by Intel Corp. (NASDAQ: INTC). The company is the state’s largest private sector employer, with more than 17,000 workers, according to the company’s website.

2. Texas
> GDP growth: 4.8%
> Real 2012 GDP: $1.21 trillion (2nd largest)
> 1-yr. population change: 1.67% (2nd highest)
> 1-yr. employment growth: 2.17% (6th highest)

The GDP of Texas, already the nation’s second largest state economy behind California, rose by nearly twice the 2.5% clip for the United States overall. Two factors — the energy boom and population growth — have been driving economic growth, according to Bernstein. Part of a long-running trend, population rose by roughly 1.7% in 2012, the second highest increase in the nation. (The state’s population grew by more than 20% between 2000 and 2010.) Energy also has been a major factor in the state’s growth. The mining industry, which includes oil and gas extraction, contributed 0.9 percentage points to GDP growth, more than all but two other states. The mining industry in Texas is the largest of any state in the nation, accounting for $123.3 billion of the nation’s $285.2 billion in mining output during 2012.

1. North Dakota
> GDP growth: 13.4%
> Real 2012 GDP: $38.7 billion (5th smallest)
> 1-yr. population change: 2.17% (the highest)
> 1-yr. employment growth: 3.02% (the highest)

For the third consecutive year, North Dakota had the fastest economic growth of any state in the country. It also led the nation in both total population and employment growth last year. Much of this was due to the state’s oil boom; North Dakota is now the second largest oil producer among all 50 states, after Texas. Last year, the mining sector contributed almost 3.3 percentage points to the state’s impressive 13.4% GDP growth. The agriculture, construction, wholesale trade and transportation and warehousing industries also added more to GDP in North Dakota than in any other state. North Dakota’s unemployment rate has been below 4% — the lowest in the United States — for each of the past three full years, due to its thriving resource economy.

Also Read: States Spending the Most on Education

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