Survey of Current Business
May 2019
Volume 99, Number 5
Regional Quarterly Report: GDP, personal income, and more... PDF

Advance real state GDP statistics for 2018

Real gross domestic product (GDP) for all states and the District of Columbia grew 2.9 percent in 2018. The percent change ranged from 5.7 percent in the state of Washington to −0.3 percent in Alaska, according to statistics released by the Bureau of Economic Analysis (BEA).

Washington, Utah, Idaho, Arizona, California, Colorado, Florida, Oregon, Texas, Nevada, and Tennessee led the nation in real GDP growth in 2018; each state grew faster than the 2.9 percent national growth rate. Except for Arizona, Nevada, and Tennessee, these states also led the nation in real GDP growth over the previous 5 years, growing faster than the 2.2 percent national compound annual growth rate from 2012 to 2017 (table 1).

Information and retail trade contributed the most to Washington’s 5.7 percent real GDP growth in 2018. Information contributed 1.8 percentage points, and retail trade contributed 1.1 percentage points. This contrasts with the much smaller contributions information and retail trade made to national real GDP growth (0.5 and 0.2 percentage point, respectively).

The large contributions from information and retail trade to Washington’s growth in 2018 are a continuation of the large contributions the industries made in 2017 and 2016, when their combined contributions were 2.6 and 2.9 percentage points, respectively.

Thirty-six states and the District of Columbia grew more slowly than the United States in 2018 as well as more slowly than the United States over the previous 5 years. Alaska’s real GDP fell 0.3 percent in 2018 after falling at a 1.9 percent compound annual rate from 2012 to 2017. Alaska was the only state with a decline in 2018 and was the state with the largest decline over the previous 5 years. Its 2018 real GDP was 9.3 percent below its 2012 peak.

Real GDP for mining fell 7.6 percent in Alaska in 2018 and accounts for much of the decline in Alaska’s real GDP over the previous 5 years.

The advance state GDP statistics for 2018 are based primarily on the national GDP by industry statistics and BEA estimates of earnings by state and industry.1 Substantially richer state source data are now available for earlier years and have been incorporated in revised GDP statistics for 2015–2017. In addition to a disaggregation into 65 three-digit industries (compared to 21 two-digit industries for the 2018 advance statistics), the state GDP statistics for 2015–2017 show the distribution of income from production to labor (compensation), capital (gross operating surplus), and government (taxes on production and imports less subsidies).

Current-dollar GDP for 2017 increased in every state after falling in nine states the previous year (table 2). Growth in 2017 was fastest in the state of Washington (6.0 percent) and slowest in Connecticut (1.0 percent).

The distribution of income from production varied substantially across industries:

  • For the nation in 2017, compensation ranged from 90 percent of GDP for nursing and residential care facilities to 5 percent for real estate.
  • Across private industries, taxes on production and imports ranged from 22 percent for retail trade to 1 percent for construction.
  • Subsidies were essentially zero for most industries, but were as high as 7 percent for farms.
  • Gross operating surplus ranged from 84 percent for real estate to 5 percent for nursing and residential care facilities.

The distribution of income from production varied markedly across states as well:

  • Almost all the growth in current-dollar GDP for 2017 in Connecticut was in compensation, which grew $2.2 billion (table 3). About $0.3 billion was in taxes on production and imports less subsidies and only $20 million was in gross operating surplus.
  • In Alaska, almost all the growth in current-dollar GDP for 2017 was in gross operating surplus ($2.1 billion) and in taxes on production and imports less subsidies ($0.2 billion). Compensation of employees fell slightly.2
  • Compensation growth for 2017 in New York ($39.8 billion) was greater than in Texas ($36.7 billion), even though Texas is the larger state as measured by GDP. Compensation growth for 2016 in New York was also larger than in Texas.
  • Gross operating surplus grew in 2017 in every state except Iowa and North Dakota. The 2017 decline in Iowa, $0.3 billion, was smaller than the $1.3 billion decline in the previous year and was primarily in insurance carriers (down $1.7 billion) and in farms (down $0.4 billion).3
  • Similarly, the 2017 decline in North Dakota, $0.1 billion, was smaller than the $2.2 billion decline in the previous year and was primarily in farms (down $0.5 billion) and in construction (down $0.2 billion).4

New source data

The updated state GDP estimates reflect the incorporation of newly available and revised state source data. The major source data incorporated as part of the update are summarized in table 4; additional information is provided in the state GDP methodology on the BEA website.