Connecticut's GDP Grows 4.7% in Third Quarter » CBIA

Connecticut’s economy saw its best performance of the year in the third quarter, with GDP growing 4.7%—27th among all states—after three soft quarters.

GDP grew in all 50 states in the third quarter as the U.S. economy expanded 4.9%. The New England regional economy grew 4.7%.

Maine led the region with 4.9% growth—19th best in the country—driven by strong gains in the retail trade, construction, and healthcare sectors.

Massachusetts’ economy expanded 4.8%, followed by Connecticut, New Hampshire (4.5%), Vermont (3.9%), and Rhode Island (3.9%).

Connecticut posted 2.9% GDP growth in 2022—17th best in the country—despite lackluster fourth quarter growth, which continued through the first half of this year.

Labor Shortage

CBIA’s Chris DiPentima said it “was no coincidence” the state’s third quarter economic performance matched strong job and labor force growth over the same period.

“You can’t have economic growth without job growth and Connecticut’s job growth has not kept pace with the demands of our economy,” he said.

“There’s no doubt the labor shortage has slowed our post-pandemic recovery, with employers continuing to report hiring challenges despite strong demand for products and services.”

Connecticut reached full recovery of the historic 292,400 jobs lost to 2020 pandemic lockdowns in October, with the U.S. at 121%.

The state has 89,000 job openings—19,000 (27%) more than before the pandemic—while the labor force has declined by 37,800 people (2%) over the same period.

“Connecticut has 1.3 job openings for every unemployed person,” DiPentima said. “We have the jobs—what we need are the people to fill those jobs.

“Pursuing policy solutions that address the state’s high cost of living, housing, and childcare and expand opportunities and career pathways for all residents has never been more critical.”

Sector Performance

Connecticut’s $343.2 billion economy accounts for 24% of New England’s $1.41 trillion GDP, and is the second largest in the region behind Massachusetts ($741.3 billion).

Fifteen of the 23 industry sectors that BEA tracks posted productivity gains in the third quarter, led by retail trade—the worst performing sector in 2022—which expanded 1.24%.

Information grew 1%, followed by construction (0.56%), nondurable goods manufacturing (0.53%), finance and insurance (0.47%), professional services (0.32%), durable goods manufacturing (0.29%), real estate (0.29%), healthcare (0.25%), management (0.18%), transportation (0.15%), state and local government (0.13%), military (0.12%), educational services (0.07%), and accommodation and food services (0.01%).

Productivity in the agriculture and federal government sectors was unchanged in the third quarter.

Utilities posted the largest decline (-0.5%), followed by other services (-0.21%), administrative services (-0.07%), arts, entertainment, and recreation (-0.04%), agriculture (-0.04%), and wholesale trade (-0.01%).

Kansas’ economy grew 9.7% in the third quarter to lead all states, followed by Texas (7.7%), Nebraska (7.5%), Idaho (7%), and Louisiana (6.6%).

Arkansas posted the slowest GDP of any state (0.7%), followed by Mississippi (0.8%), Maryland (2,7%), Michigan (2.9%), and North Dakota (2.9%).

Personal Income

Connecticut personal income grew 3.9% in the third quarter—13th best in the nation—after growing 2.9% last year (24th).

U.S. personal income grew 3.5% in the third quarter after growing 2% last year.

The New England states averaged 3.6% growth, with Connecticut leading the region.

Personal income grew 3.8% in Maine, followed by Massachusetts (3.7%), New Hampshire (3.2%), Vermont (2.9%), and Rhode Island (2.4%).

Texas saw the country’s best growth at 5.2%, followed by South Carolina (4.9%), Kansas (4.9%), Colorado (4.8%), and Idaho (4.6%).

Arkansas’ personal income was unchanged, the worst quarterly performance of the 50 states, followed by Mississippi (0.4%), North Dakota (0.5%) Washington (0.9%), and Iowa (2.1%).