Which states are growing the fastest?
The Bureau of Economic Analysis just released their compilation of GDP performance by state. The results are pretty striking: the Great Plains and Rocky Mountains are growing well, while the Northeast is mired in slow grown.
Energy prices have a lot to do with what’s happening. Mining isn’t a significant contributor to national economic growth, but it plays a key role in several states. In North Dakota, the fastest growing state, mining contributed 3.6 points to the state’s 9.7 percent growth rate. It also made up a large portion of the growth of the next four fastest growers: Wyoming, Oklahoma, Colorado, and West Virginia. While the US economy grew 1.8% last year, the Rocky Mountains and Great Plains regions expanded at a 3.1% rate
The Northeast, by contrast, is growing much slower. New England and the Northeast only grew 0.8%. Part of this has to do with high energy costs here, and the fact that we don’t have much exposure to the booming energy and mining industries.
Over the next several years, the growth in domestic energy production will impact economic growth across the US. It just hasn’t had much effect yet.
Douglas R. Tengdin, CFA
Chief Investment Officer