BEA Publishes (and Revises) State GDP Data … Is There a Better Yard Stick?

June 15, 2015

This week we look at the recently released State level GDP data.

State GDP a helpful measure of economy size, but Geo Score a better indicator of health 

Last week the U.S. Bureau of Economic Analysis released its first estimate of GDP by State for 2014 and published revisions to prior years’ statistics.

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Each of the worst performing States has shown a multi year trend of lagging the national economy.  The chart below displays the average Geo score for these States for the last four years.

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Notable among the worst performing States is Virginia.  Growth in Virginia’s economy has lagged the US since 2011.

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The mining, construction and non-durable goods manufacturing sectors have been the biggest drags on growth in Virginia’s economy.

Texas and North Dakota as national leaders in GDP growth was not a surprise, but this is likely to change for 2015 as the impact of declining energy prices on their economies will be reflected in their GDP statistics.

While energy prices began their decline during the middle of 2014, the data on continuing claims for unemployment indicates that the economic impact was not felt until late 2014/early 2015.

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An interesting aspect of the recently released GDP statistics is the large impact of revisions to prior data.  This year’s release included revisions to statistics dating back to 1997. The BEA indicated that the years since 2011 were most heavily impacted.

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The revised GDP data estimates that the economies of Wyoming and North Dakota are over 9% smaller than previously thought.  The size of the State of New York economy was revised up by 2%.

While GDP is a helpful measure of the rough size of a State’s economy and its various sectors, we prefer other measures (like the DIVER Geo Score) for measuring economic health instead of the GDP data due to the infrequent, lagged nature (TX, ND) and the large impact of revisions (WY, ND).

Have a great week,


Michael Craft, CFA

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