Connecticut was dead last in economic growth last year, the only state
in the nation where the combined total of goods, services and salaries paid
within the state shrank compared with 2011.
The bad news for the Nutmeg State in Thursday's report from the Bureau of Economic Analysis doesn't stop there. Not only did the state equivalent of GDP, or gross domestic product, fall by 0.1 percent in 2012, it fell by the same amount in 2011, a substantial downward revision from the last year's initial estimate of 2 percent growth.
And in 2010, when the initial estimate suggested Connecticut had one of the strongest growth patterns in the country, the state's GDP only grew by 1.2 percent, half the rate of the nation.
The only good news in the revisions is that the drop in 2009 was not nearly as large as first estimated. Initially, Bureau of Economic Analysis reported that the state's economy shrank by 5.3 percent that year. Now the bureau says the economy only fell by 3.6 percent, just a little worse than the national GDP drop of 3.3 percent.
Why is Connecticut lagging every other state? While nearly every sector is growing more slowly than the nation, the biggest culprits are government austerity and troubles in financial services and insurance.
Nationally, government job cuts and furloughs subtracted about a half of one percent from GDP growth, and the end result was 2.5 percent growth.
In Connecticut, government job cuts were six times worse, and it was a 0.25 percent drag.
Nationally, the finance and insurance sector rebounded and contributed 0.28 to the 2.5 growth rate. The sector's strength was second only to durable goods manufacturing.
In Connecticut, finance and insurance shaved 0.57 percentage points from the state's GDP, according to this first estimate. The size of the drop in output and salaries and bonuses in that sector was so dramatic that it almost swamped the combined total of economic growth in construction, retail and wholesale trade, tamp services, private education, arts, restaurants and hotels.
The only three sectors in the state that were strong in 2012, were durable goods manufacturing, a category that covers consulting firms and private equity firms; and information, which includes both information technology and companies such as ESPN.
(c)2013 The Hartford Courant (Hartford, Conn.)
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Distributed by MCT Information Services
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