MONTGOMERY, Ala. — New research from the Bureau of Economic Analysis (BEA) found that while the Gross Domestic Product (GDP) of the United States as a whole grew 2.2 percent last year, Alabama’s GDP growth was only about a third of that, or 0.7 percent.
GDP, one of the more commonly used statistics to measure economic growth, is the measure of the monetary value of all finished (final) goods and services created in an area over a specific amount of time.
According to BEA, professional, scientific, and technical services; nondurable goods manufacturing; and real estate rental and leasing were significant contributing factors to the nationwide growth.
Mississippi and Alaska were the only two states that had negative growth over 2014, with -1.2 and -1.3 percent GDP growth, respectively. Although all of Alabama’s neighbors, save Mississippi, posted higher growth rates, ten other states also posted slower GDP growth than the Yellowhammer State.
While Alabama’s 0.7 percent growth may be underwhelming, it is important to understand that there are a few significant outlier states whose extremely high rate of growth skew the average higher.
North Dakota, reaping the benefits of its fuel boom, came in highest at 6.3 percent growth, with Texas not far behind at 5.2 percent growth. West Virginia grew 5.1 percent while its Eastern neighbor Virginia posted no growth at all.
However, if Alabama’s economic growth had kept pace with the national average, it is also likely that the current budget crunch would not be nearly as severe, even though most of the tax revenue that grows with the economy flows into the Education Budget, rather than the cash-strapped General Fund.
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015