Special Report

State Economies Hit Hardest By the COVID-19 Recession

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40. Georgia
> 1-yr. GDP change: -2.5%
> 2020 GDP: $533.6 billion (10th largest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-20.2%)
> Fastest growing industry, 2019-2020: Utilities (+6.1%)
> April 2021 unemployment: 4.3% (17th lowest)

Economic output fell by 2.5% in Georgia in 2020, a smaller contraction than in most states. The smaller than average economic decline during the COVID-19 pandemic in the state was due in part to strong performances in the utilities and finance, insurance, and real estate sectors, which each had a net positive impact on economic growth in the state. Declines in industries hard-hit by the pandemic like transportation and entertainment, recreation, and hospitality were also less pronounced in Georgia than they were nationwide.

Economic decline brought about job losses in Georgia. Overall employment in the state fell by 4.6%, or 214,000 jobs, in 2020.

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39. Arkansas
> 1-yr. GDP change: -2.6%
> 2020 GDP: $114.4 billion (16th smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-17.7%)
> Fastest growing industry, 2019-2020: Utilities (+11.2%)
> April 2021 unemployment: 4.4% (18th lowest)

Arkansas’ annual GDP stands at $114.4 billion — 2.6% lower than it was in 2019. As was the case in many states, arts, entertainment, recreation, accommodation, and food services was the fastest shrinking industry in Arkansas in 2020. Over the course of the year, as nonessential travel effectively ground to a halt in much of the country, the sector contracted by 17.7%. However, no industry had a greater negative impact on Arkansas’ economy than manufacturing, which accounted for a 0.6 percentage point contraction in the state’s total GDP.

Economic decline in Arkansas resulted in relatively minimal job losses. Overall employment in the state fell by 3.0% in 2020, compared to 5.8% nationwide.

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38. Maryland
> 1-yr. GDP change: -2.6%
> 2020 GDP: $364.2 billion (15th largest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-25.6%)
> Fastest growing industry, 2019-2020: Agriculture, forestry, fishing and hunting (+7.0%)
> April 2021 unemployment: 6.2% (18th highest)

Maryland’s economy contracted by nearly $9.9 billion in 2020, or 2.6%. While the state’s economic decline was less pronounced than in most of the rest of the country, job losses were relatively steep. Overall employment fell by 6.8% in Maryland in 2020, a full percentage point greater than the comparable 5.8% employment decline nationwide. There were nearly 190,000 fewer jobs in Maryland in 2020 than there were in 2019.

Job losses hit the state’s leisure and hospitality sector especially hard, with more than one in every four jobs in the industry gone. Information and retail trade followed, with 7.9% and 8.2% employment declines, respectively.

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37. Alabama
> 1-yr. GDP change: -2.7%
> 2020 GDP: $195.5 billion (24th smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-23.2%)
> Fastest growing industry, 2019-2020: Agriculture, forestry, fishing and hunting (+4.3%)
> April 2021 unemployment: 3.6% (8th lowest)

Alabama is one of only 18 states with an economy that reported a contraction of less than 3% in 2020. Alabama’s GDP from $200.8 billion in 2019 to $195.5 billion in 2020, a 2.7% decline. As was the case in most states, Alabama’s arts, entertainment, recreation, accommodation, and food services contracted the most due to steep reductions in nonessential travel during the pandemic. Economic decline in many sectors Alabama was offset partially by growth in the agriculture, utilities, and professional business services sectors.

Over the course of the last year, Alabama shed 89,000 jobs, or 4.3% of its workforce. Still, the state’s 3.6% unemployment rate is among the lowest in the country.

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36. California
> 1-yr. GDP change: -2.8%
> 2020 GDP: $2.7 trillion (the largest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-28.9%)
> Fastest growing industry, 2019-2020: Agriculture, forestry, fishing and hunting (+8.7%)
> April 2021 unemployment: 8.3% (2nd highest)

California’s GDP declined to $2.7 trillion in 2020. The staggering $77.7 billion drop is a larger decline than the entire annual economic output of over a dozen states. Still, as California’s economy is by far the largest of any state, its contraction in 2020 amounted to just 2.8%, a smaller decline than most states reported.

While economic decline in California was less pronounced than in much of the country, the state’s job market was hit especially hard. Overall employment fell by 7.4% in the state in 2020. Due to mass layoffs in services, retail trade, and hospitality, there were nearly 1.3 million fewer people working in California on average in 2020 than there were in 2019.