Enterprising States Report: Top Performers in Growth, Productivity and Livability
This article is taken from Enterprising States, a study produced by the National Chamber Foundation. The study was released at the U.S. Chamber's annual Jobs Summit on June 13, 2012.
Now two years past the low point in the national jobs crisis, nearly every state in the nation is beginning to return to private-sector job growth. The resource-rich states of the Great Plains and Intermountain West lead the way, fueled by the rapid expansion of the energy economy and recent stability of agriculture.
At the same time, Virginia and Maryland in the Mid-Atlantic have outperformed the nation with strong science, technology, and professional services growth, driven in part by the strong performance of the entire Washington, DC region.
The top performing states are determined by a combination of the following measures:
- Long-term job growth
- Short-term job growth
- Overall expansion of gross state product
- Productivity: state output per job
- Productivity growth: growth in output per job
- Income growth: growth in per capita personal income
- Livability: median income of four-person households adjusted for state cost of living
Top Performing States:
1. North Dakota – North Dakota was propelled to the top by a top-10 finish in six of the seven performance-ranking categories. The state is first in four growth categories: short-term jobs, long-term jobs, gross state product (GSP), and per capita personal income. It places second in productivity growth. While the state’s metropolitan areas have beaten the nation in job growth for a decade, the Peace Garden State’s economic prospects took off with the energy boom in western North Dakota in the past three years. Notably, the state has seen 34% growth in finance, 39% in professional and technical services, and nine consecutive years of growth in construction employment.
2. Wyoming – Another energy state, Wyoming finishes in the top 25 in all seven performance measures and is among the top five states in five measures. The state is second in long-term job growth and GSP growth, and is third in productivity growth and income growth. Up 61% since 2001, the state’s mining industry is 11 times more concentrated than the national average. The state’s small manufacturing sector – producing chemical products, metals and equipment – remained stable over the past decade, avoiding large job losses seen in other states.
3. Virginia – Virginia has the highest income in the nation for a family of four after adjusting for cost of living, making it perhaps the most “livable” state. The Old Dominion State is a strong performer overall, placing in the top 25 in all seven measures, including seventh in productivity growth and tenth in GSP growth. Already a major center for professional-services jobs, Virginia added another 135,000 jobs in these high-end services the past decade, with 36,000 new jobs in management consulting and 48,000 in computer-systems design.
4. Alaska – Alaska is second in overall productivity, fourth in long-term job growth, and eighth in GSP growth over the past decade. Employment in the state’s mining sector grew at 48% since 2001, helping to drive demand in locally oriented health care, finance, retail, accommodation and food-service sectors.
5. Maryland – Maryland places fifth overall with top-25 rankings in all seven performance measures. The Old Line State is fifth overall in adjusted income for a family of four and ninth in productivity growth. Benefitting from the recent economic stability provided by the nation’s capital, Maryland is one of the nation’s high-tech centers. Its most productive sector over the past decade has been professional, business, and technical services, particularly computer- systems design. Over the same time period, the state doubled its jobs in corporate headquarters and management offices.
6. Texas – The Lone Star State’s strongest categories are short- and long-term job growth (second and fifth) and GSP expansion (ninth), though it appears in the top 25 in six of seven measures. The energy economy and affordability help fuel widespread growth across nearly every super-sector of the state. Even so, the state is increasingly becoming a center for high-end services and business management; it has nearly doubled its management, scientific, and technical consulting jobs and nearly tripled its employment in corporate and business management offices to go with another 200,000 jobs in mining, and oil and gas extraction since 2002.
7. South Dakota – South Dakota is known as a center on the Plains for back-office finance, but manufacturing has been its most competitive sector since 2001. The state has seen significant growth in chemicals, machinery, fabricated metals, and transportation equipment. At the same time, the Mount Rushmore State added more than 5,000 jobs in professional services for 35% growth. The state is moving toward higher-value, more productive industries, as shown by its fourth-place rankings in growth in GSP-per-job and per capita personal income.
8. Washington – Led by the software industry, Washington is one of the few states with a growing information sector. Washington moved up five places into the top 10 largely due to its rapid short-term job growth over the past two years. The state’s manufacturing sector – led by aircraft and other transportation equipment building – significantly outperformed the national manufacturing industry since 2001. The Evergreen State added another 65,000 jobs in professional, scientific and technical services; 19,000 in securities and commodity contracts and 12,000 in electronic wholesale markets.
9. Iowa – Iowa is rapidly increasing the value of its economy, placing fifth in growth in economic productivity, sixth in per-capita income growth and eleventh in GSP growth. The state’s finance and insurance sector has seen 28% growth, led by 10,500 new jobs in commercial banking. The state is expanding its presence as a center for business and commerce, doubling its jobs in management offices and adding 7,800 new jobs in transportation and warehousing (11% growth).
10. New York – The Empire State’s large, complex economy performed well across all measures, placing in the top 25 in six of seven. The state moved up 11 spots in this year’s performance rankings due to rapid GSP expansion and per-capita personal income growth. New York is fourth in GSP per job and ninth in per-capita personal income growth in the past decade. Much of this growth has been driven by the rebound in various high-value finance sectors. The state’s private colleges and universities also expanded rapidly, adding nearly 55,000 jobs for a rate of growth of 30%.