California No. 3 state for economic growth, by GDP math

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of data and art.

Buzz: California’s economic rebound from the pandemic era outpaced all but two states in 2021 when measured by growth in the broadest measurement of business output.

Source: My trusty spreadsheet analyzed state-by-state gross domestic product data — that’s the dollars following through the economy, adjusted for inflation’s impact — from the U.S. Bureau of Economic Analysis.

Topline

California’s economy grew 7.8% in 2021, No. 3 among all states vs. 5.7% growth nationwide. The top state was Tennessee at 8.6%, followed by No. 2 New Hampshire at 8.5%.

Oh, and California’s top economic rivals Florida was up 6.9% (No. 5) while Texas grew 5.6% (No. 19).

Details

The growth rate is impressive considering just how big California’s economy is. The state produced $3.36 trillion of goods and services last year, earning the top spot in the nation’s $23 trillion economy. By the way, California’s output is also bigger than every national economy outside of the U.S., China, Japan and Germany.

And Texas? Its $1.99 trillion output ranks it No. 2 among the states. Florida’s $1.23 trillion is No. 4.

Yes, the sharp rebound came after a pandemic-iced 2020. Yet California’s performance in GDP terms is better than you’d guess, considering all the criticism of the state’s tough business-crimping restrictions designed to tame the spread of coronavirus.

California’s GDP fell 2.8% in 2020, but that was still the 18th best result among the states — tying Florida, no less. It topped a 3.4% loss nationwide. Texas fell 2.9%.

So, that means California’s business output last year was 104.8% of 2019’s levels — the seventh-best rebound among the states. The nation’s output was at 102%; Texas was 102.5% (No. 19) and Florida was 103.9% (No. 14).

Just so you know, California’s GDP grew 3.6% in 2019, No. 8 among the states — topping the nationwide rate of 2.3%, Texas’ 3.2% (No. 11) and Florida’s 3% (No. 12).

Worth noting

What boosted California’s economy in 2021?

The state’s renowned information-processing juggernaut was the key cog among 21 business niches carved out by the GDP math. Information businesses accounted for 23% of the state’s growth vs. 12% for all U.S. growth.

The manufacturing of durable goods kept factories humming, the state’s No. 2 boost — 15% of California’s 2021 growth vs. a 9% share in the U.S.

The work-from-home pivot didn’t cool two typical types of office work — finance was 14% of California growth and professional services took 12%. Both were the same share as the national economy.

And No. 5 was accommodations and food services, with 7% of California’s growth. That trailed the industry’s 9% U.S. share, a sign of the lingering impacts of tough business limitations California imposed on “fun” businesses.

Bottom Line

GDP is a rather impersonal statistic, and it also reflects one economic oddity of the pandemic era: Those who did well in these stressful years did very well.

So, I’d be remiss without mentioning recent job market trends.

California’s total employment grew 3.2% last year, No. 19 among the states. That brought the job count to 95.9% of 2019, the No. 32 pandemic era performance among the states.

Nationally, jobs grew 3.1% last year for a 96.8% rebound. Florida jobs jumped 4.6% (No. 5) to a 99.4% rebound (No. 9). And Texas’ 3.5% job growth (No. 17) pushed it to 99.2% of pre-pandemic days (No. 10).

But in this wealth vs. health debate, don’t overlook the pandemic’s other toll — deaths.

California has suffered 226 virus-linked deaths per 100,000 residents in the last two years — the 13th best performance and below the nation’s 296 rate. Texas had 303, 26th best, while Florida had 342, for 16th worst.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register