Detailed Findings and Methodology
Just as states range in size and population, regional GDP can also range widely. California’s economic output of over $2.2 trillion in 2015 is more than the total GDP of either Australia, Brazil, or Canada. Computer and electronics manufacturing, California’s largest industry, generated $93.1 billion in 2015, more than the entire economy of 14 other states.
Excluding real estate, a given state’s largest industry often reflects certain unique characteristics of that state. For example, the elderly often require more regular medical care and doctor visits than younger people, and in Florida, a destination for retired Americans, about 1 in every 5 residents are 65 and older, the largest share of any state. It is not likely a coincidence health care is Florida’s largest industry, generating some $39.3 billion in 2015.
In other cases, a state’s natural resources have a significant effect on the economic landscape. Natural resource extraction or production are the largest industries in nine resource-rich states, including Alaska, North Dakota, and Texas.
Sometimes, a state’s unique laws have attracted companies that drive economic activity. South Dakota, for example, removed restrictions on interest rate and fee caps for banks in the early 1980s. Since then, several major banks have relocated their credit department headquarters to the state. Today, credit intermediation is the largest industry in South Dakota.
While every state has an industry that is larger than the rest, very few states are dominated by a single industry. Nationwide, ambulatory health care services, the largest industry after real estate, accounts for only 3.7% of economic output. In most states, the largest industry accounts for less than 6.0% of total GDP.
The exceptions to this rule are largely energy producing states, like Alaska, where oil and gas extraction accounts for nearly 20% of total GDP.
To identify the largest industry in each state, 24/7 Wall St. reviewed each state’s industries and their respective GDP contributions from the Bureau of Economic Analysis. All BEA data is as of 2015, the most recent period for which detailed data is available. With only a few exceptions, the largest industry in each state is real estate. In order to identify regional industrial differences, we excluded the real estate sector in our examination. All government sectors were also excluded. Only industries on the same subsector level were included, and as a result, broader categories such as manufacturing, construction and retail were not considered. Employment and wage figures for private employees in each industry came from the Quarterly Census of Employment and Wages. The QCEW and BEA industry data were aligned according to their North American Industry Classification System codes. Median age and share of the population 65 and older are from the U.S. Census Bureau’s American Community Survey and are for 2015. Economic output and GDP are used interchangeably regarding industry contribution.