Special Report

Ten States With the Fastest Growing Economies

10. Nebraska
> GDP growth: 3.0%
> 2013 GDP: $109.6 billion (16th lowest)
> 1-yr. population change: 0.7% (25th highest)
> 2013 unemployment: 3.9% (3rd lowest)

Nebraska’s gross domestic product grew by an estimated 3% in 2013, while the U.S. economy grew by just 1.9%. The state’s job market has been in relatively good shape in recent years. Less than 4% of Nebraskan workers were unemployed in 2013, among the lowest rates nationwide. Like several other rapidly growing state economies, Nebraska’s economy relies heavily on agriculture. While the sector accounted for just 1.6% of the U.S. economy, it made up more than 10% of Nebraska’s output in 2013, more than in all but two other states. According to The Wall Street Journal, U.S. farmland prices have been on the rise for several years, particularly across the Farm Belt. In Nebraska, too, land value has more than doubled, although further growth is uncertain.

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9. South Dakota
> GDP growth: 3.1%
> 2013 GDP: $46.7 billion (4th lowest)
> 1-yr. population change: 1.3% (6th highest)
> 2013 unemployment: 3.8% (2nd lowest)

South Dakota’s agricultural industry accounted for 13.7% of the state’s economy, the most in the nation. Additionally, the industry contributed roughly 1.7 percentage points to the state’s economic growth rate, more than anywhere else in the U.S., except North Dakota. According to a South Dakota State University survey, high commodities prices have driven up the price of farmland in the state, as buyers have sought property to expand production as an investment. These were the two most common reasons to buy farmland. The expansion indicates farmers are confident in the industry. Like most states with growing economies, South Dakota’s unemployment rate was among the nation’s lowest, at just 3.8% as of 2013, second only to North Dakota.

8. Texas
> GDP growth: 3.7%
> 2013 GDP: $1.5 trillion (2nd highest)
> 1-yr. population change: 1.5% (4th highest)
> 2013 unemployment: 6.3% (17th lowest)

Not only does Texas have a rapidly growing economy, but also its GDP of $1.5 trillion in 2013
was exceptionally large in dollar terms. It was second highest nationwide last year and greater than the combined GDP of the other states on this list. GDP growth exceeded the national growth rate by a large margin in each of the last three years. By some measures, including employment and economic output, Texas has largely recovered from the recession. Booming oil production is likely the largest factor contributing to the economy’s strong growth. The mining industry, which includes oil production, accounted for 13.5% — well over $200 billion — of Texas’ economic output, five times the sector’s contribution to the national output. Economic prosperity, however, does not necessarily mean all residents are well-off. More than 22% didn’t have health insurance in 2012, more than in any other state. And 17.9% lived below the poverty line, more than in all but a handful of states.

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7. Utah
> GDP growth: 3.8%
> 2013 GDP: $141.2 billion (19th lowest)
> 1-yr. population change: 1.6% (2nd highest)
> 2013 unemployment: 4.4% (4th lowest)

Unlike most other states with rapidly growing economies, Utah cannot attribute its recent economic growth to agricultural or energy booms. Rather, the state seems to have an exceptionally attractive business climate, including relatively low taxes and a strong job market. Just 4.4% of Utah workers were unemployed as of last year, among the lowest rates nationwide. Residents were also relatively wealthy, with a median household income of more than $57,000 in 2012, well above the $51,371 median for the U.S. overall. While economic growth does not always mean prosperity for all, in Utah, income inequality is exceptionally low.

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