Special Report

State Economies Hit Hardest By the COVID-19 Recession

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45. South Dakota
> 1-yr. GDP change: -1.7%
> 2020 GDP: $46.8 billion (4th smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-18.6%)
> Fastest growing industry, 2019-2020: Agriculture, forestry, fishing and hunting (+17.5%)
> April 2021 unemployment: 2.8% (4th lowest)

Economic output in South Dakota fell by 1.7% from 2019 to 2020. The three largest drags on the state’s economy over the last year were the arts, entertainment, and hospitality, educational services, and real estate sectors. Meanwhile, agriculture, construction, and utilities were net positives on economic growth.

Overall employment in the state dipped by 3.4% in 2020, with the steepest job losses in the hospitality industry. Still, South Dakota’s job market remains one of the strongest in the country with unemployment at just 2.8% — less than half the 6.1% national jobless rate.

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44. Nebraska
> 1-yr. GDP change: -2.1%
> 2020 GDP: $115.0 billion (17th smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-21.6%)
> Fastest growing industry, 2019-2020: Mining, quarrying, and oil and gas extraction (+14.9%)
> April 2021 unemployment: 2.8% (4th lowest)

Nebraska’s economy contracted by 2.1% in 2020. The largest detractors to GDP growth were the sectors most affected by efforts to contain the spread of the coronavirus. For example, transportation accounted for a net 1.3 percentage point decline in the state’s GDP, and arts, entertainment, recreation, accommodation, and food services, which contracted more than any other industry in the state, dragged Nebraska’s GDP down by half a percentage point.

Due in large part to layoffs in many of the state’s fastest shrinking industries, employment declined 3.6% in Nebraska year over year. The state’s leisure and hospitality industry alone shed 15,000 jobs in 2020r. Still, unemployment in Nebraska stands at 2.8%, tied with three other states as the lowest in the country.

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43. Iowa
> 1-yr. GDP change: -2.3%
> 2020 GDP: $169.5 billion (21st smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-24.2%)
> Fastest growing industry, 2019-2020: Agriculture, forestry, fishing and hunting (+9.9%)
> April 2021 unemployment: 3.8% (10th lowest)

Iowa is one of only eight states to report an economic contraction of less than 2.5% in 2020. Iowa’s 2020 GDP of $169.5 billion was 2.3% lower than it was in 2019. Efforts to contain the spread of the coronavirus slowed economic activity in the state. Two of the industries that detracted the most from growth were transportation and arts, entertainment, recreation, accommodation, and food services.

Just as economic decline was not as steep in Iowa as in much of the rest of the country, neither were job losses. Employment fell by 5.1% in the state in the last year, below the 5.8% national decline.

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42. Virginia
> 1-yr. GDP change: -2.5%
> 2020 GDP: $476.9 billion (13th largest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-24.5%)
> Fastest growing industry, 2019-2020: Utilities (+4.5%)
> April 2021 unemployment: 4.7% (21st lowest)

Virginia’s economy contracted by 2.5% between 2019 and 2020. Declines in sectors related to entertainment and tourism were steep enough to offset gains in construction and utilities — the only two sectors in the state that expanded in 2020.

Employment declines were even more pronounced in Virginia. The state’s leisure and hospitality sector shed over one-fifth of its workforce, and partially as a result, overall employment declined by 5.0%.

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41. North Carolina
> 1-yr. GDP change: -2.5%
> 2020 GDP: $498.7 billion (12th largest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-27.4%)
> Fastest growing industry, 2019-2020: Utilities (+3.7%)
> April 2021 unemployment: 5.0% (24th highest)

Along with neighboring Georgia and Virginia, North Carolina’s economy contracted by 2.5% in 2020. Also like its neighbors that reported similar economic contractions, the fastest growing industry in the state was utilities, which expanded by 3.7%, and the fastest shrinking industry was arts, entertainment, recreation, accommodation, and food services, which contracted by 27.4%.

Employment in North Carolina has also fallen in 2020, by 4.3%, resulting in a loss of nearly 200,000 jobs. Still, the state’s monthly unemployment stands at 5.0%, slightly less than the 6.1% U.S. jobless rate.