88.7% of the New England Gross Domestic Product was from the private sector in 2015
The GDP data is sourced from the Bureau of Economic Analysis (BEA). For the country as a whole private sector Gross Domestic Product only changed to 87.6% of total GDP in 2015 from 87.3% in 1997, and the goods-producing sector’s share has only fallen to 19% from 22.6% over the same period. The New England private sector GDP is above the national average at 88.7% and the goods-producing sector only contributed 14% to GDP in 2015, down from 19.6% in 1997. The services sector is growing much faster than the goods sector as will be seen below. There are also significant variations across the states, which are also revealed below.
The Goods-Producing Sectors
There are four sectors classified as goods-producing by the BEA:
- Mining
- Agriculture
- Construction
- Manufacturing
The goods producing industries GDP grew by 40% in the New England region but by 76% nationally. Goods-producing industries have suffered most in New Hampshire (+8% in $ terms since 1997, the lowest in the country), Rhode Island (+27%), Maine (+32%), Vermont (+33%), Connecticut (+42%), and Massachusetts (+50%), all of which are below the national average.
Index calculations of growth prepared using 1997 as the base year
For ease of reference two tables have been prepared to illustrate the growth from 1997 to 2015 in the private sector GDP attributable to services and goods. Using 1997 as index 100 the tables give a quick snapshot of the relevant performance of each sector in each state.
The Private Services-Providing Industries 2015 GDP Growth Index by State
The Growth Index for New England’s goods sector was 140 compared to 212 for the services sector, so the service sector grew 1.8 times faster than the goods sector, hence the decline of the goods sector as a percentage of GDP.
However the reason for the steep decline is not because New England’s service sector has done so well, but because its goods producing sector did so badly. It has only grown by 40% in eighteen years but only the Massachusetts and Connecticut goods sector exceeded that growth rate. All of the other 4 states had lower rates of growth, with New Hampshire’s goods GDP only growing by 8% since 1997.
The Private Goods-Producing Industries 2015 GDP Growth Index by State
Further analysis is done on this below.
89.6% of Connecticut’s Gross Domestic Product was from the private sector in 2015
The 2015 proportion of Connecticut’s Gross Domestic Product attributable to the goods-producing industries was 14.5% which is just above the average for the New England region. The proportion has declined from 18.7% in 1997 because the service sector grew at a faster rate. The service sector actually grew twice as fast over the period compared to the goods sector.
Connecticut’s economy did struggle relative to the other states in both sectors however. Nationally the goods grew by 76% and the services by 123% and Connecticut’s growth was the 13th and 5th slowest respectively when compared to other states.
In 2015 Connecticut’s private sector GDP was valued at $229bn in an economy worth $256bn in total. It is the 23rd largest in the country, just ahead of Louisiana and Oregon.
85.9% of Maine’s Gross Domestic Product in 2015 was from the private sector
The proportion of Gross Domestic Product attributable to the goods-producing sector of Maine’s economy fell to 14.7% in 2015 from 20.8% in 1997 and was now almost on a par with the government sector. The Growth Indices of 132 for goods and 204 for services were both below the national averages of 176 and 223 so the Maine’s economy struggled overall. But the goods sector only grew at a third the rate the service sector grew and that was the reason the proportion attributable to the goods sector fell so much.
Compared to other states Maine’s goods sector ranked 7th and service sector ranked 12th lowest for growth from 1997 to 2015.
In 2015 Maine’s Gross Domestic Product was worth $57bn of which $49bn was from the private sector. Maine’s economy is the 8th smallest in the country, just ahead of Rhode Island.
89.2% of Massachusetts’ Gross Domestic Product in 2015 was from the private sector
The proportion of Massachusetts’ Gross Domestic Product attributable to the goods producing sector fell to 13.7% in 2015 from 18.8% in 1997. The service sector has been growing faster at a time when the goods sector has struggled to grow in line with the national average.
The services sector Growth Index of 222 in comparison to the goods sector Growth Index of 150 confirms the former grew 140% faster than the latter. Massachusetts’ goods-producing economy did grow the most in the New England region since 1997 but was still 17th slowest in the country. Unlike Connecticut, the decline in share has been steady since 1997.
Massachusetts’ Gross Domestic Product in 2015 was $488bn with $435bn coming from the private sector. It was also as big as all the other New England states combined and was the 11th largest in the country, ahead of Virginia, and just behind North Carolina.
88.4% of New Hampshire’s Gross Domestic Product in 2015 was from the private sector
The 88.4% private sector contribution to New Hampshire’s economy in 2015 may be only down 0.2% on the same measure in 1997, but the ratio of services sector to the goods sector has changed dramatically in that time.
The goods producing sector’s proportion of total New Hampshire’s Gross Domestic Product has fallen to 14.8% in 2015 from 26.6% 1997 and this really is a case of the goods sector doing badly as opposed to the service sector doing well.
The goods sector Growth Index of 108 confirms the sector has only grown by 8% in eighteen years compared to 76% growth nationally and 40% in New England. It is the worst performance by a state in this sector and only New Mexico’s is on a par.
The New Hampshire service sector Growth Index of 230 was the best in the region but only just above the national average of 223. The differences between the growth rates for goods and services in New Hampshire means the state is transitioning to a service economy faster than any other state in the country.
New Hampshire’s Gross Domestic Product was valued at $74bn in 2015 with $66bn coming from the private sector. It was the 12th smallest in the country, ahead of West Virginia, and just behind Hawaii.
86% of Rhode Island’s Gross Domestic Product in 2015 was from the private sector
The 2015 proportion of Rhode Island’s Gross Domestic Product attributable to its goods-producing industries was 12.6%, which was just below the average for the New England region. Back in 1997 it accounted for 18.9%. The decline of 33% since 1997 is the 4th steepest decline nationally, behind New Hampshire, Arizona and New Mexico and just ahead of near neighbor Vermont. However it should be noted that back in 2009 the ratio was 12.5%, so the entire decline has come prior to the recovery from the Great Recession of 2008.
The goods sector Growth Index of 127 is the 4th slowest in the country, behind New Hampshire (108), New Mexico (108) and New Jersey (120) and well down on the national index of 176.
Meanwhile the services Growth Index of 213 was much better and ranked 19th slowest when the national index was 223.
Rhode Island’s Gross Domestic Product in 2015 was valued at $55bn in 2015 with $48bn coming from the private sector. It is the 7th smallest economy in the country, ahead of Alaska, and just behind Maine.
85.2% of Vermont’s Gross Domestic Product in 2015 came from the private sector
The 2015 proportion of Vermont’s Gross Domestic Product attributable to the goods-producing industries fell to 15.2% from 22.4% in 1997, one of the steepest declines nationally, and similar to New Hampshire and Rhode Island.
The goods sector Growth Index of 133 is well below the 176 national and 140 New England averages. It was the 8th slowest growth rate in the country but neighbors Maine, Rhode Island and New Hampshire all grew slower, so four of the bottom eight states were in New England.
On the service sector side of Vermont’s economy, the Growth Index of 211 is ranked 17th lowest, though it is just in line with the New England BEA region.
Vermont’s economy is the smallest in the country. Vermont’s Gross Domestic Product in 2015 was worth $30bn and $26bn of that came from Vermont’s private sector.
Gross Domestic Product data is sourced from the Bureau of Economic Analysis (BEA) and is up to date as of June 20th 2017.
