Riding high on the fortunes of the financial and insurance industries, Connecticut’s economy grew by 7% in the fourth quarter of 2020 on a linked quarter basis, the fourth-biggest improvement of any state in the country.
However, the coronavirus pandemic still had an overall negative impact on Connecticut and the national economies last year.Â
For all of 2020, Connecticut’s GDP, or the value of all goods and services produced in the state, shrank by 4.1%, placing it in the middle of the pack when compared to other Northeast states such as New York (-5.9%), Massachusetts (-3.8%), and Rhode Island (-4.5%), according to data released this morning by the U.S. Bureau of Economic Analysis.
Connecticut’s fourth quarter GDP increase far exceeded the national average of 4.3% growth, putting the state in the company of South Dakota (up 9.9%), Texas (up 7.5%), Utah (up 7.1%), and Tennessee (up 6.7%) as the top gainers.
Government researchers attributed Connecticut’s fourth quarter upswing to growth in the insurance, finance, professional services, health care, and waste management sectors, which all reported gains of over 0.5% between October and December.
The finance and insurance industries were by far the largest contributors, with combined growth of 1.48% compared to the third quarter of 2020.
Connecticut lost ground with the agriculture, utilities, education, and government services sectors.
Year-to-year, the nation’s economic performance was, as anticipated, bleak, with the COVID-19 pandemic causing a drop in real GDP in all 50 states when measured against 2019.
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