Special Report

Ten States With the Slowest Growing Economies

10. Maine
> GDP growth: 0.9%
> 2013 GDP: $54.8 billion (6th lowest)
> 1-yr. population change: -0.01% (2nd lowest)
> 2013 unemployment: 6.7% (23rd lowest)

Maine’s economy grew by just 0.9% in 2013, about half the national growth rate. While many states with slow economic growth had large output in dollar terms, Maine’s 2013 GDP was actually quite small, at just $54.8 billion, versus neighboring Massachusetts’ $446 billion GDP. Government spending accounted for 13.8% of the state’s economy last year, slightly higher than the national rate. In many cases, and in Maine particularly, low government spending last year was a drag on GDP. The government sector lowered statewide GDP growth by 0.26 percentage points last year. Nationwide, government spending lowered GDP growth by 0.12 percentage points. Nearly 18% of Maine households used food stamps in 2012, among the highest rates in the nation.

9. Illinois
> GDP growth: 0.9%
> 2013 GDP: $720.7 billion (5th highest)
> 1-yr. population change: 0.11% (6th lowest)
> 2013 unemployment: 9.2% (3rd highest)

Durable goods manufacturing accounted for 7.1% of Illinois’ output last year, higher than the 6.6% the sector contributed to national GDP. The sector, however, has been under some stress in recent years. Illinois-based Caterpillar, one of the world’s largest heavy equipment manufacturer, has suffered dramatic declines in demand for its mining equipment. As a result, the company slashed area jobs. Nearly 13% of state workers were in employed in manufacturing in 2012, among the highest proportions in the nation. Any cuts to manufacturing jobs, whether at Caterpillar or elsewhere, is likely to impact the state’s workforce. Illinois’ 9.2% unemployment rate last year was exceptionally high, greater than all but two other states.

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8. Alabama
> GDP growth: 0.8%
> 2013 GDP: $193.6 billion (25th lowest)
> 1-yr. population change: 0.34% (17th lowest)
> 2013 unemployment: 6.5% (tied-18th lowest)

Already one of the poorest states in the nation, Alabama’s economy is also slow growing. Alabama’s median household income was just $41,574 in 2012, among the lowest in the nation. Additionally, nearly one in five residents lived below the poverty line that year, more than in all but a handful of states. Perhaps as a result, 16.8% of households relied on food stamps, among the highest rates in the nation. Lower government spending resulted in a 0.27 percentage point drag on GDP growth, more than in all but four other states. However, at the end of last year, Governor Robert Bentley pointed out that his administration had generated more than $1 billion in annual savings for taxpayers. According to the Tax Foundation, as of fiscal 2011, Alabama had one of the lowest state and local tax burdens in the nation.

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