States With the Fastest (and Slowest) Growing Economies
>2015 GDP growth: 0.2%
> 2015 GDP: $132.7 billion (20th smallest)
> 1-yr. population change: 0.3% (20th largest increase)
> 2015 unemployment: 4.2% (13th lowest)
Kansas’ economy was relatively dormant in 2015. With a 0.2% GDP growth rate, Kansas’ economic growth lagged behind that of nearly all states. The government sector, one of the largest in the state, was one of the largest drags on the state’s economy, contracting by 2.3%.
While last year’s growth was slow in Kansas, the state’s job market was relatively healthy to begin with. Only 4.6% of the state’s workforce was out of a job in 2014, far lower than the 6.2% nationwide rate. The state’s unemployment rate improved to 4.2% in 2015, lower than in all but a dozen other states.
>2015 GDP growth: 0.2%
> 2015 GDP: $27.3 billion (the smallest)
> 1-yr. population change: -0.1% (3rd largest decline)
> 2015 unemployment: 3.7% (7th lowest)
While the national economy grew by 2.4% in 2015, Vermont’s economy grew by just 0.2%. One primary reason for the sluggish growth was the contraction in the state’s two largest economic sectors — the finance, insurance, real estate, rental, and leasing sector, and the government sector. The decline in real estate activity may have been partially due to the state’s falling population. Vermont’s population declined by 0.1% between 2014 and 2015, the third largest decrease of any state. The state’s economy was helped, however, by growth in other key sectors. The educational services, health care, and social assistance sector, Vermont’s fourth largest by GDP, expanded by 1.9%. The professional and business services sector, the state’s fifth largest, expanded by 2.5%.
3. West Virginia
>2015 GDP growth: 0.1%
> 2015 GDP: $67.3 billion (12th smallest)
> 1-yr. population change: -0.3% (the largest decline)
> 2015 unemployment: 6.7% (2nd highest)
West Virginia’s economy expanded from $67.2 billion in 2014 to $67.3 billion in 2015, one of the slowest growths of any state in the country. Slow economic growth does not always mean a state’s workforce is struggling. West Virginia, however, has one of the slowest-growing economies, and one of the nation’s highest unemployment rates. West Virginia is one of only two states where unemployment worsened in 2015. The state’s 6.6% jobless rate in 2014 increased to 6.7% in 2015. Nationwide, unemployment dropped from 6.2% to 5.3% over the same time period.
>2015 GDP growth: -0.5%
> 2015 GDP: $49.4 billion (5th smallest)
> 1-yr. population change: 0.2% (12th largest increase)
> 2015 unemployment: 6.5% (5th highest)
Alaska is one of only two states where the economy actually contracted in 2015. The state is heavily dependent on oil revenue and was among the hardest hit by the fall in oil prices. Alaska’s mining industry shrank by 4.5% in 2015, accounting for the bulk of the state’s economic decline. Alaska is one of multiple oil-dependent states facing budget deficits as a result of the price drop. To combat the budget deficit, Governor Bill Walker proposed last year a personal income tax in Alaska. The state has not had a personal income tax since it was repealed about 35 years ago. The tax bill is still in draft form and will likely not come into effect until 2019.
1. North Dakota
>2015 GDP growth: -2.1%
> 2015 GDP: $50.3 billion (6th smallest)
> 1-yr. population change: 2.3% (the largest increase)
> 2015 unemployment: 2.7% (the lowest)
In the last two years, North Dakota transitioned from being the nation’s fastest growing economy to the nation’s fastest shrinking one. Thanks to the exploitation of oil in the Bakken shale formation and new more efficient extraction techniques, North Dakota’s GDP growth rate of 6.0% in 2014 was the fastest of any state and nearly three times the national rate. In 2015, however, after falling oil prices helped put an end to the boom, North Dakota’s economy contracted by 2.1%, the worst economic performance of any state.
At the beginning of last year, some 31,000 North Dakota residents were employed in the mining and logging sector. Through April 2016, the industry’s workforce dropped precipitously to just over 17,000. North Dakota’s 2015 unemployment was still the lowest of any state, at 2.7%. North Dakota is now one of many oil-dependent states facing an extreme budget deficit.