Special Report

The States With The Fastest Growing Economies

5) Alaska
> GDP growth: 2.5%
> Real 2011 GDP: $44.702 billion (7th lowest)
> Population change: +1.2% (6th highest)

> Pct. increase in employment: 1.1% (tied-15th highest)

The mining industry, which includes mineral, oil, and natural gas extraction, was the leading source of economic growth in Alaska in 2011, generating about $849 million. The business of harvesting natural resources in the state is so prosperous that Alaskans benefit from the Permanent Fund Dividend, which gives every resident a portion of the mining proceeds. In 2011, Alaskans in the program received a check for $1,174. The mining and logging industry comprises 4.8% of total jobs in Alaska, the second highest percentage of jobs in this industry of any state in the country behind Wyoming. The population of Alaska increased the sixth fastest in the nation while unemployment in the state decreased from 8% in 2010 to 7.6% in 2011.

4) Texas
> GDP growth: 3.3%
> Real 2011 GDP: $1.149908 trillion (2nd highest)
> Population change: +1.67% (The highest)
> Pct. increase in employment: 2.1% (3rd highest)

The GDP of Texas grew in 2011 an impressive $36.8 billion, more than the real GDP of five  states. This corresponds with the state’s rapidly-growing population, which increased 1.67% from 2010 to 2011 to surpassing New York and become the second-largest state by population in the country. The state’s economic expansion has also been assisted by healthy growth in a number of major industries: mining contributed about 19% to the state’s GDP growth and manufacturing contributed almost 22% in 2011. Growth in Texas GDP likely helped cut the state’s unemployment rate from 8.2% to 7.9%, as the trade, transportation, and utilities companies have added 51,100 jobs and mining companies added another 29,800 jobs.

3) West Virginia
> GDP growth: 4.5%
> Real 2011 GDP: $55.765 billion (11th lowest)
> Population change: +0.05% (3rd lowest)
> Pct. increase in employment: 1.0% (tied-21st highest)

Given that the state’s population increased by less than 1,000 people between 2010 and 2011, West Virginia’s 4.5% GDP growth is especially remarkable. A huge percentage of this growth, 86.4%, or more than $2 billion, was driven by the mining industry. This was the greatest contribution to GDP growth of any industry in any state. When combined with the lumber industry, mining  provided jobs for 33,600 West Virginians, or 4.5% of all jobs in the state. The contributions to GDP growth by employment from the industry have likely helped reduce the state’s unemployment rate, which fell from 8.5% in 2010 to 8.0% in 2011.

2) Oregon
> GDP growth: 4.7%
> Real 2011 GDP: $186.228 billion (25th highest)
> Population change: +0.87% (16th highest)
> Pct. increase in employment: 1.0% (tied-21st highest)

Oregon’s GDP growth between 2010 and 2011 was nearly three times that of the U.S. economy. The state’s durable goods manufacturing industry was the second-fastest growing sector in the nation in 2011 at a rate of 3.94%, almost 20% of Oregon’s economic growth. High tech companies such as Intel Corp., which employs about 16,300 in Portland, dominate the durable goods manufacturing industry. This can be attributed to a reverse offshoring trend that is occurring partially as a result of defects, delays, and theft in overseas supply chain locations.

1) North Dakota
> GDP growth: 7.6%
> Real 2011 GDP: $34.262 billion (5th lowest)
> Population change: +1.38% (3rd highest)
> Pct. increase in employment: 4.8% (the highest)

North Dakota’s GDP grew 7.6% from 2010 to 2011,  faster than any other state in the country. Over the same period of time, employment in the state increased 4.8%, as 18,100 net jobs were created in a state with a population just over 680,000. This was three times as many as the 5,600 created  over the same period in New Jersey, a state with 8 million residents. Much of this growth has been driven by exploration of the Bakken shale, a geological formation thought to potentially yield billions of barrels worth of recoverable oil. The economic strength was reflected in strong job growth in many industries. Jobs in in mining and logging increased by 52.3%, jobs in construction increased 11.1%, and jobs in trade, transport and utilities increased a cumulative 6.5%.  All of these were the highest rates of increases in the United States.

Michael B. Sauter and Lisa Nelson