Tuesday, June 7, 2011

Colorado GDP up 1.4 percent in 2010, lags US

Real gross domestic product (GDP) increased in 48 states in 2010 as Colorado growth lagged the national average. According to new GDP data released today by the Bureau of Economic Analysis:

Durable–goods manufacturing, retail trade, and finance and insurance were leading contributors to the upturn in U.S. economic growth. U.S. real GDP by state grew 2.6 percent in 2010 after declining 2.5 percent in 2009.

Retail trade and finance and insurance were also leading contributors to real GDP growth. Retail trade contributed to growth in all eight BEA regions and in every state, and was the leading contributor in Oklahoma and Florida. Finance and insurance was the leading contributor to real GDP growth in five states, contributing more than one percentage point to growth in New York and Connecticut.

Although mining was not an important contributor to real GDP growth for the nation, it was a large contributor in several states. In North Dakota, the fastest growing state in 2010, mining contributed nearly two percentage points to real GDP growth of 7.1 percent.

In contrast to other industries, construction continued to be a drag on real GDP growth. Nationally, construction declined for the sixth consecutive year and detracted from growth in most states. Nevada was particularly hard hit—construction subtracted nearly two percentage points from the state's real GDP growth.

In Colorado, real GDP increased 1.4 percent from 2009 to 2010, but lagged the US average which was 2.5 percent in the year-over-year comparison.

In addition, the Rocky Mountain region posted the smallest growth rate of any region,with growth of 1.4 percent from 2009 to 2010. The Southeast region, for example, posted a gain of 2.3 percent while the Plains showed growth of 2.5 percent.

The first graph shows Colorado GDP growth compared to the national rate since 1998:

We can note that Colorado GDP growth was lower than the US rate in 2002, 2003, 2004, 2006 and 2010. This reflects what many observers of the Colorado economy have noted, namely that Colorado did not see an economic boom on the same level as the national economy during the past decade (especially from 2002-2007), and this can be seen in the GDP comparisons. Job growth often lagged during this same period.

The second graph shows GDP growth in all industries against growth in private industry only. Since 2008, government industry growth has become relatively more robust than private industry growth, pushing up overall GDP totals. (This graph is for Colorado.)

With the exception of 2009, 2010 growth in all industries and in private industries only were at 6-year lows.