Special Report

State Economies Hit Hardest by COVID-19

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21. Kentucky
> 1-year GDP change: -2.6%
> Fastest growing industry: Utilities (+10.1%)
> Fastest shrinking industry: Mining, quarrying, and oil and gas extraction (-24.4%)
> Nov. 2020 unemployment rate: 5.6%

Over the last year, Kentucky’s economy contracted by 2.6%, in line with the 2.8% national economic decline over the same time. Unlike much of the rest of the country, however, mining, quarrying, and oil and gas extraction reported the largest decline in output over the past year in Kentucky, while nationwide the hardest hit industry has been arts, entertainment, and recreation.

The mining and resource extraction industry’s decline in Kentucky was due in large part to declines in global commodity prices precipitated by the COVID-19 pandemic. The price of coal was down about 50% in 2020 from early 2019, and Kentucky is the fifth largest coal-producing state in the country.

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22. Delaware
> 1-year GDP change: -2.7%
> Fastest growing industry: Utilities (+7.0%)
> Fastest shrinking industry: Arts, entertainment, and recreation (-36.8%)
> Nov. 2020 unemployment rate: 5.1%

Delaware’s economy generated $62.5 billion in Q3 of 2020, 2.7% less than it did in the same quarter the previous year. The finance insurance sector, the largest in the state by total output, expanded by just 1.2% over the past year, below the 4.3% national industry expansion over the same period. The industry that reported the largest year-over-year decline in economic output in Delaware was arts, entertainment, and recreation. The industry shrank by 36.8% over the past year, which was actually smaller than the industry’s contraction nationwide of 45.3%.

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23. Missouri
> 1-year GDP change: -2.7%
> Fastest growing industry: Utilities (+7.9%)
> Fastest shrinking industry: Arts, entertainment, and recreation (-30.2%)
> Nov. 2020 unemployment rate: 4.4%

Over the past year, Missouri’s economy contracted by 2.7%, in line with the national economic contraction of 2.8%. The decline in Missouri was driven by a 3.3% reduction in economic output in the manufacturing sector — the largest in the state. Nationwide, manufacturing contracted by 0.9%. Missouri’s arts, entertainment, and recreation industry reported the largest decline, at 30.2%.

Contractions in these industries were partially offset by growth in utilities, finance and insurance, and management sectors.

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24. Minnesota
> 1-year GDP change: -2.8%
> Fastest growing industry: Agriculture, forestry, fishing and hunting (+23.8%)
> Fastest shrinking industry: Arts, entertainment, and recreation (-38.0%)
> Nov. 2020 unemployment rate: 4.4%

Minnesota’s GDP declined 2.8% from Q3 2019 to Q3 2020, the same as the overall U.S. economic contraction over that same period. The state has one of the largest agriculture, forestry, fishing and hunting industries of any state, generating over $9.7 billion in Q3 2020 — a 23.8% increase compared to a year earlier.

Minnesota also reported relatively high growth in its utilities and its finance and insurance sectors, helping to mitigate some of the large declines in its information, management, and government sectors. The state has a relatively resilient job market, with monthly unemployment rates consistently that were consistently lower than the overall U.S. unemployment rates throughout the COVID-19 pandemic.

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25. Montana
> 1-year GDP change: -2.8%
> Fastest growing industry: Utilities (+12.7%)
> Fastest shrinking industry: Arts, entertainment, and recreation (-27.2%)
> Nov. 2020 unemployment rate: 4.9%

Montana is one of two states with a one-year 2.8% GDP decline, in line with the overall U.S. decline. The state’s economic output fell from over $48.2 billion in the third quarter of 2019 to less than $46.9 billion in the third quarter of 2020.

Though construction GDP declined by 1.4% nationwide from Q3 2019 to Q3 2020, the sector actually grew by 3.6% in Montana during that time. The state’s utilities economic output grew by 12.7% during that time as well — more than double the 5.2% nationwide increase in the sector, and the fifth highest share of any state. All but three states lost jobs amid the pandemic. Montana’s employment declined by 2.1% from September 2019 to September 2020, one of the smallest declines among states.