North Dakota, New York, Indiana and Massachusetts topped the list of states enjoying the most economic growth last year, according to statistics breaking down GDP by state that the U.S. Department of Commerce released last week. With all but two states experiencing expansion in 2010, the new data confirm a trend towards recovery in 2010 from weakness the previous year.
Leading the expansion last year was North Dakota, which grew 7.1% from the previous year. The Great Plains state benefited from mining and rising oil prices; new hydraulic extraction techniques have focused investor attention on the region’s rich shale oil deposits. North Dakota, with the second-smallest GDP of any of the states, did not suffer a housing crisis; its 3.8% unemployment rate is the lowest in the nation.
New York’s economy grew 5.1% last year, the second-highest growth rate. The cyclical financial services industry was cycling high in 2010, when the U.S. stock market clocked its second consecutive annual rally at year end. The Commerce Department’s Bureau of Economic Analysis, which broke down the state data by industry, credits finance and insurance with contributing more than a percentage point of New York’s GDP gains last year.
Indiana’s 4.6% expansion came in third in the state rankings, and there as in No. 7-ranked Oregon, durable-goods manufacturing contributed more than two of those percentage points.
Massachusetts grew 4.2%, buoyed by strength across the durable goods manufacturing, retail trade and financial services sectors, and mining center West Virginia, with 4% growth, rounded out the top 5.
Nationwide, 2010 GDP growth averaged 2.6% after declining by nearly as much (2.5%) the previous year. Durable goods manufacturing, retail trade and finance and insurance led the growth across the states. The biggest drag on growth nationally continued to be construction, which declined for the sixth straight year. The ailing sector subtracted 2 percentage points from Nevada’s growth rate. The Silver State’s GDP was one of just two states to decline in 2010, contracting 0.2%, a hair above Wyoming’s worst-in-the-nation economic performance of minus 0.3%.
Arizona was the third-worst performing state, with 0.7% growth, followed by Oklahoma (1%) and Montana (1.1%).
All eight economic regions tracked by the Bureau of Economic Analysis were in positive territory for the year, with the area stretching from the nation’s capital up through New England enjoying the strongest growth, in general, and the Rocky Mountain region down to the Southwest and Southeast, in broad terms, exhibiting the weakest growth.