US Gross Domestic Product (GDP) increased by 5.7% in 2021. This was the highest GDP growth rate in 37 years.
But not all states contribute to GDP equally. The largest states by population tend to contribute more to GDP than smaller states. But the productivity and income of each state matter too.
Looking at GDP by state can reveal the complexity and diversity of the nation’s economy.
Which states contribute the most or the least to GDP?
California, Texas, New York, Florida, and Illinois have the highest state GDP in the US. Combined, these states contribute 41% of the national GDP.
The states with the lowest GDP include Vermont, Wyoming, Alaska, Montana, and South Dakota. The combined GDP of these states accounts for 1.1% of US GDP.
What is each state’s biggest contributor to the nation’s GDP?
Each state’s economy has different strengths based on their natural resources and core industries. For example, Washington DC is the home of much of the federal government. So, it’s not surprising that federal government enterprise is the biggest contributor to GDP for the district.
About 24% of GDP in the US is contributed by two sectors, manufacturing and real estate[1].
Real estate is the top contributor to GDP in 20 states, the most of any industry. Manufacturing leads GDP in 18 states.
The finance and insurance industry contributes the most to GDP in Connecticut, Delaware, New York, and South Dakota.
In North Dakota, West Virginia, and Wyoming, the mining, quarrying, and oil and gas extraction industry contributes the most to state GDP.
In addition to Washington DC, six states have unique industries as their largest contributor to GDP.
For example, in Massachusetts, the sector that contributes the most to state GDP is professional, scientific, and technical services.
In Washington, the information sector contributes the most to GDP. The information sector includes six subsectors, some of which include broadcasting, telecommunications, and data processing services.
New Mexico and Oklahoma both gained the most GDP from state and local government enterprises, such as law enforcement and administrative occupations.
Tennessee’s largest industry is agriculture, forestry, fishing, and hunting. Alaska’s largest industry contributing to GDP is the transportation and warehousing industry.
How has GDP changed by state since the COVID-19 pandemic began?
From 2020 to 2021, GDP increased for all states and Washington DC, as economic activity ramped up after the initial shock of the pandemic.
Comparing state GDP with 2019 can provide insight into how economic activity compared with pre-pandemic levels in 2021.
Twelve states and Washington DC had a lower GDP than in 2019. However, five of those states and Washington DC had a decrease of less than 1%.
Hawaii, Louisiana, Alaska, Oklahoma, and Connecticut had the largest GDP decline compared with other states. At the same time, Montana, Nebraska, Idaho, South Dakota, and Iowa had the highest increases in state GDP, each increasing more than 7%.
In 2021, US GDP grew about 2% from the pre-pandemic levels of 2019. Twenty-three states had increases in GDP higher than 2% over that time.
To learn more about the US economy and the COVID-19 recovery, visit the COVID-19 Impact and Recovery Hub.
[1] The Real Estate and Rental and Leasing sector comprises establishments primarily engaged in renting, leasing, or otherwise allowing the use of tangible or intangible assets, and establishments providing related services. The major portion of this sector comprises establishments that rent, lease, or otherwise allow the use of their own assets by others. The assets may be tangible, as is the case of real estate and equipment, or intangible, as is the case with patents and trademarks.
