State Economies Hit Hardest By the COVID-19 Recession

Utah’s economy contracted by 0.1% in 2020, the smallest decline of any state. Due in large part to shutdowns of nonessential travel during the COVID-19 pandemic, the state’s arts, entertainment, recreation, accommodation, and food services sector contracted by 22.3% over that period, more than any other industry. Declines in industries related to tourism were partially offset, however, by growth in the state’s construction, information, and real estate sectors.

Economic contraction contributed to job losses in Utah. Overall employment fell by 1.6% from 2019 to 2020 in the state. Despite the decline, Utah’s job market is relatively strong. As of April, unemployment in the state stood at 2.8%, less than half the 6.1% U.S. jobless rate.

Washington is one of only three states where GDP fell by less than 1% between 2019 and 2020. Steep declines in the industries hit hardest by the COVID-19 pandemic were partially offset by growth in sectors like utilities and agriculture.

Washington is also home to some of the largest tech companies in the world, some of which reported strong earnings during the pandemic, such as Amazon and Microsoft. Partially as a result, the information sector was by far the largest contributor to growth in the last year, contributing to a net increase of 2.2 percentage points in GDP.

Arizona’s 0.9% economic contraction in 2020 ranks as the third smallest among states. While sectors like entertainment and travel were hit hard due to pandemic-related shutdowns, other industries, like agriculture, information, and utilities thrived. During a period of mass layoffs across multiple industries, employment in Arizona’s utilities sector expanded by 9.4%, more than any other industry in the state and the sector’s strongest job growth in the country.

Due in part to strong job growth in the state’s utilities sector, overall employment fell by just 3.1% in Arizona in 2020, well below the 5.8% employment decline nationwide that year.

Idaho’s economy contracted by 1.1% in 2020, a far smaller decline than most other states and less than one-third the comparable national economic contraction. Population growth can drive economic growth, and there are tens of thousands of more people living in Idaho today than there were last year. The state’s one-year population growth of 2.1% was the highest of any state over that period.

Population growth likely helped fuel Idaho’s construction industry. The sector’s output grew by 6.1% in 2020 and contributed 0.3 percentage points to overall GDP growth — a larger overall net contribution to the state’s economy than any other industry.

Colorado’s economy contracted by just 1.5% in 2020, the fifth smallest decline among states. Strong growth in Colorado’s information sector helped offset steep declines in industries related to tourism.

While Colorado’s decline in economic output was modest relative to most states, job losses were steeper. Due in part to the mining and logging industry, which shed nearly a quarter of its workforce in Colorado throughout 2020, overall employment in the state fell by 5.2% from 2019 to 2020, only slightly lower than the 5.8% national employment decline during that time. As of April, unemployment in Colorado stood at 6.4%, compared to the 6.1% U.S. unemployment rate.