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September 30, 2022

Updated: CT 2Q real GDP decreased 4.7%, one of largest declines in U.S.

By Greg Bordonaro

Real gross domestic product decreased 4.7% in Connecticut during the second quarter of 2022, one of the steepest declines in the nation, according to the U.S. Bureau of Economic Analysis.

Real gross domestic product decreased in 40 states and the District of Columbia in the second quarter of 2022, with the percent change in real GDP ranging from 1.8% in Texas to –4.8% in Wyoming, BEA data shows. 

The finance and insurance industry was the leading contributor to the decrease in Connecticut, which experienced the second-largest decrease in the country, according to BEA. 

Nationally, second quarter GDP declined 0.6%. During the second quarter nationally, real GDP decreased in eight of the 23 industry groups. Construction; nondurable-goods manufacturing; and wholesale trade were the leading contributors to the decrease in national real GDP.

In a statement, Chris DiPentima, president and CEO of the Connecticut Business & Industry Association, said "the GDP numbers clearly highlight the impact the state’s labor shortage crisis - along with inflation and supply chain bottlenecks - is having on our economy. The finance and insurance and manufacturing sectors, two critical components of our economy, saw some of the biggest declines in the  quarter. The performance of those sectors, along with contraction in the construction and real estate sectors - which typically act as early warning signs - is very troubling."

He also noted that Connecticut’s 2.2% personal income growth in the second quarter was last in the country, well behind U.S. average growth of 5.8%.

“That continues a multi-year decline for a key measure of our economic competitiveness," he said. "While we still have the second highest personal income in the country, we are heading in the wrong direction. These numbers should sound alarm bells for the state’s policymakers and those running for elected office this fall."

State officials noted the economic news wasn't all bad. For example, the Bureau of Economic Analysis revised its first GDP estimate for Connecticut from a 1.4% decline to a 5.5% increase, one of the strongest growth rates in the country. 

And over the past 12 months, Connecticut's real GDP growth of 1.2% ranks 24th of 50 states. 

 

 

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