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All Contents © 2020The Kiplinger Washington Editors
By David Payne, Staff Economist
Glenn Somerville, Associate Editor
| August 7, 2018
America’s economic engine will continue to hum across all major regions throughout 2018.
The strongest growth is in the West, with plenty of high-wage jobs being created in tech-related hardware and software, plus aircraft, finance and business services. The South is seeing higher demand for exports such as industrial machinery and other equipment. The Midwest is enjoying a surge in demand for manufactured goods, and it leads in productivity gains, though slower auto sales could ding growth in Michigan. The Northeast is benefiting from its high-tech clusters, such as Boston. Mid-Atlantic states have limited exposure to growing trade fights, compared with other areas that rely on exports. Mountain West states stand to benefit from the recovery in oil and minerals prices.
But it’s not all good news. For instance, the commodities-heavy economies of the Plains states face some dark clouds. A slowdown in the farming industry and new international tariffs will hit hard.
Read on for Kiplinger’s exclusive 2018 economic outlook – including projected job-growth and unemployment rates – for each state, listed alphabetically.
Intern Cece Biagini also contributed to this package.
Population: 4,874,7472018 job growth: 1.3%2017 job growth: 1.0%New jobs in 2018: 26,800New jobs in 2017: 19,100Unemployment rate by year-end 2018: 3.8%Unemployment rate at year-end 2017: 3.8%
Alabama’s job growth lags that of the other Southeast states, and labor-force growth is poor, though there are bright spots in the economy. Huntsville, with its tech, auto and aerospace sector, is seeing the fastest job growth. Two new rocket engine plants are being built there. Aircraft production is ramping up in Mobile.
The state’s automotive sector had previously been a bright spot, as Alabama had landed auto plants from Mercedes, Honda, and Hyundai, and a new plant from Toyota/Mazda. 57,000 workers in the automotive sector build a million vehicles a year. It’s the third-largest state for U.S. auto exports. However, the expected auto sales slowdown this year and the prospects of rising tariffs are casting clouds. Alabama has been successful at attracting manufacturing because it has the fifth-lowest costs in the country, and this will help it once again after the clouds pass.
Population: 739,7952018 job growth: -0.7%2017 job growth: -1.3%New jobs in 2018: -2,200New jobs in 2017: -4,400Unemployment rate by year-end 2018: 7.1%Unemployment rate at year-end 2017: 7.2%
A rebound in prices for crude oil is benefiting Alaska, but follows years of battering that drove it into recession and left its economy with the highest unemployment rate of any state. More job cuts are likely this year, but the rate of losses is declining, and there are glimmers of hope that the economic downturn may be near bottoming out. The cost has been severe: some 11,700 high-paying oil industry jobs were lost between 2015, when oil prices were slumping, and the end of this year. State officials are hopeful a huge infrastructure project to develop a liquefied natural gas (LNG) capability can be completed by 2024 or 2025. Alaska has huge reserves of the clean-burning fuel, and global demand for it is strong. Helping to cushion the blow from the loss of oil-industry momentum in recent years has been growth in Alaska’s manufacturing, health care, and tourism sectors. Alaska also has a strong and growing military presence due to its strategic location. That is boosting construction, including $169 million budgeted in 2018 at Eielson Air Force Base for two squadrons of F-35s arriving in 2020.
Population: 7,016,2702018 job growth: 2.4%2017 job growth: 2.4%New jobs in 2018: 67,000New jobs in 2017:65,200Unemployment rate by year-end 2018: 4.5%Unemployment rate at year-end 2017: 4.7%
Steady population growth for rapidly growing cities like Phoenix as well as expanding high-tech businesses, including Amazon’s plans to create a new distribution center in Tucson employing 1,500 people, keep Arizona’s economy on a solid growth trajectory. Its sunny climate is a magnet for retirees, who fuel growth in health care and other professional services, while its relatively lower living costs are attractive for younger, educated workers from coastal cities like Los Angeles. Construction is under way on a $1.5 billion Intel semiconductor plant in Chandler that is to be completed in 2021, further contributing to the southwest region’s reputation as a growing tech center. Arizona’s more flexible regulatory environment is attractive to a wide variety of businesses from health care to banking. Payrolls went up significantly over the past year at defense contractors Raytheon and Orbital ATK, as well as at UnitedHealthcare, Walgreens, Charles Schwab and Wells Fargo.
Population: 3,004,2792018 job growth: 0.7%2017 job growth: 1.0%New jobs in 2018: 8,200New jobs in 2017: 12,000Unemployment rate by year-end 2018: 3.8%Unemployment rate at year-end 2017: 3.7%
These are difficult times for Arkansas’ efforts to breathe more vitality into labor markets, partly because of the state’s lack of success to date in luring high-tech businesses -- but also a result of less interest in Fayetteville Shale, the state’s gas reservoir. Houston-based Southwestern Energy is halting its drilling in the state after laying off hundreds of employees and will auction off its shale assets. A bid by state capital Little Rock to develop a technology park has not attracted any high-tech companies and now is being rescaled to accommodate smaller businesses. Meanwhile, a rapidly changing merchandising landscape is compelling the state’s signature company, Bentonville-based Wal-Mart Stores Inc., to keep cutting its headquarters staff with as many as 1,000 jobs to disappear this year and next. There is modest hiring growth in smaller-scale manufacturing, including a new plant in Fort Smith under construction by Silgan Plastic Food Containers that will employ 150, but otherwise the state’s labor markets are struggling with job growth slowing.
Population: 39,536,6532018 job growth: 1.8%2017 job growth: 2.1%New jobs in 2018: 294,300New jobs in 2017: 340,200Unemployment rate by year-end 2018: 4.1%Unemployment rate at year-end 2017: 4.5%
There's solid job and wage growth, but spiraling housing costs and high taxes paint a mixed picture for California’s giant economy – in dollar terms now rated the fifth-largest in the world. Retail giant Amazon is hiring hundreds of people for its massive new warehouse in Fresno, a $77-billion high-speed rail system between Los Angeles and San Francisco is under construction, and carmaker Tesla is supporting tens of thousands of jobs in the state – all typical of the high-powered industrial activity taking place within the state. But liberal California faces a relatively hostile federal government in Washington that is critical of the state’s relatively lenient attitude toward immigration. It is also dealing with a scarcity of affordable housing as well as an exodus of businesses, including prominent ones like Toyota and Jacobs Engineering Group, and threats by more companies to pull up stakes if taxes and other costs of operating keep rising.
2018 job growth: 2.7%
2017 job growth: 2.2%
New jobs in 2018: 70,900
New jobs in 2017: 56,100
Unemployment rate by year-end 2018: 2.6%
Unemployment rate at year-end 2017: 3.0%
The state’s major urban centers, including Denver and its surrounding environs, are booming and helping generate development of professional and business services and leisure and hospitality businesses, as well as an expanding high-tech sector. A 10,000-square-foot Microsoft Technology Center opened this year in Denver, catering to business professionals, while in neighboring Aurora Amazon has about 1,000 employees at work at its warehouse distribution facility. Google has about 500 employees at a recently opened campus in Boulder and intends to triple that number eventually. Colorado also is a major force in the aerospace industry, home to roughly 400 companies employing about 28,000 in the field. Two of the nation’s top aerospace engineering programs are at the University of Colorado at Boulder and the Air Force Academy in Colorado Springs. That attracts talented employees in well-paying positions to the state to participate in an industry that prizes innovation. Tourists are drawn to Colorado year-round by its abundance of recreational activities, including more than two dozen ski resorts, and to visit the scenic Rocky Mountains.
2018 job growth: 0.8%
2017 job growth: :0.1%
New jobs in 2018: 13,500
New jobs in 2017: 2,300
Unemployment rate by year-end 2018: 4.4%
Unemployment rate at year-end 2017: 4.5%
Connecticut is making a return to growth on the strength of increased manufacturing activity that owes significantly to a pickup in defense spending. But there is also more hiring in service sectors, including healthcare and in professional services such as accounting and banking. General Dynamics’ Electric Boat division is making a major long-term investment at Groton, spending more than $800 million over 17 years to up its capacity for producing submarines to three per year by 2021 from two currently. It will be adding close to 2,000 jobs over a period of years. United Technologies Corp., an aerospace and commercial building manufacturer, will boost its workforce in the state by 7,000 immediately and add another 2,000 by 2022. Connecticut is also drawing more high-tech businesses, including IT provider Infosys, which is developing a training hub at Hartford and will create about 1,000 jobs by 2022. In addition, genomic testing firm Sema4 is moving a laboratory from New York City to Stamford and adding 400 jobs over five years.
The faster economic tempo will help Connecticut bounce back from a 0.2% contraction in GDP during 2017 to about a 2% expansion this year. There is some risk for its high-value-added manufacturing industries because of tariffs that the Trump administration has imposed against imported steel and aluminum, which effectively drives their costs up. But there are enough orders in the pipeline for helicopters, submarines, jet engines, and other defense items to ensure that the economy has room to run.
Population: 961,9392018 job growth: 1.2%2017 job growth: 0.7%New jobs in 2018: 5,500New jobs in 2017: 3,200Unemployment rate by year-end 2018: 3.8%Unemployment rate at year-end 2017: 4.5%
Delaware has a reputation as a low-tax state, attractive to financial services firms. Hiring is strong in professional and business services, and some of the job creation is in innovative start-ups that are applying technology to services. Online credit card company Fair Square Financial aims to double its workforce in Wilmington during the next two years. It’s an important tourist venue, known for its sandy beaches, and its three casinos may now be revitalized as a result of the recent legalization of individual sports betting. State officials have reached agreement with Gulftainer Group, a privately owned port operator, to build a new container shipping facility on the Delaware River. The company is to invest $580 million over nine years in the new operation, which is expected to result in substantial new hiring.
Population: 20,984,4002018 job growth: 2.3%2017 job growth: 2.2%New jobs in 2018: 193,400New jobs in 2017: 181,500Unemployment rate by year-end 2018: 3.7%Unemployment rate at year-end 2017: 3.9%
Florida GDP is expected to grow about 3.8% in 2018 and 2019, well above the national average. Construction is booming: a new high-rise is going up in Miami, and many retail strips are being converted to upscale. Housing starts will rise 10% this year and 6% next year, with home prices continuing to rise 6% to 10% on high demand. Florida still faces an oversupply of luxury condos, but cheaper housing is tight in most areas of the state. The manufacturing sector is surging, along with much of the service sector. Workers are becoming scarcer, as unemployment rates are dropping fast in many metro areas. Residual effects of the Hurricane Irma evacuation are still keeping labor force growth low in the southwest and the southern Atlantic coast. Orlando continues to be the hottest growth area, with gains in tech, aerospace, and healthcare. Also, the resort beaches of the Panhandle are beginning to be discovered.
Domestic tourism to Florida is still setting records, but international tourism is down, especially to Miami. Latin American currencies have fallen in relation to the dollar this year. Overseas immigration to the state is also down. The tax law change limiting the amount of property deductions may increase relocations to the Florida Atlantic coast from the Northeastern states. Any effect should be seen later this year and next.
Population: 10,429,3792018 job growth: 1.8%2017 job growth: 1.9%New jobs in 2018: 80,000New jobs in 2017: 81,500Unemployment rate by year-end 2018: 4.0%Unemployment rate at year-end 2017: 4.5%
Georgia is attracting numerous distribution and warehouse jobs, given Atlanta’s major airport and transportation hubs. The port deepening project at Savannah is about halfway complete (due in 2022), which will further add to the state’s connection to the global economy. Healthcare continues to be a strong sector for the state.
The Atlanta metro area will remain a hotbed of housing construction, but job growth is slowing to just a moderate pace. Strong job growth is shifting further east to Gainesville, Athens, and now even Augusta, which had been fairly quiet until recently. This is attracting some of the migrant inflow that would normally go to Atlanta. Downstate is more sedate, though even some of these housing markets are beginning to see strong price increases.
Population: 1,427,5382018 job growth: 1.6%2017 job growth: 1.0%New jobs in 2018: 10,300New jobs in 2017: 6,600Unemployment rate by year-end 2018: 2.1%Unemployment rate at year-end 2017: 2.1%
A cloud hangs over a key part of the island state’s economy, literally, because of the continuing Kilauea volcanic eruptions on Hawaii’s Big Island, which could last for months or up to two years. Tourism is Hawaii’s top employer, supporting upward of 200,000 jobs last year and generating nearly $17 billion in visitor spending, but it is feeling the impact now of publicity about the eruptions. Though Hawaiian authorities are aiming to reassure visitors that the eruptions are relatively localized, losses from reduced hotel bookings, canceled cruise ship calls and reduced tourism activities are taking a toll on what officials had expected to be a record year. Hawaii has other economic pluses in its favor, however, including the benefit it reaps from military spending due to its strategic location. In 2015, nearly $8 billion worth of contracts added up to about 10% of Hawaii’s overall economic activity, with local firms such as BAE Systems and Raytheon sharing the bounty, as did the University of Hawaii for research into areas including climate change and alternative energy.
Population: 1,716,9432018 job growth: 3.0%2017 job growth: 3.3%New jobs in 2018: 21,300New jobs in 2017: 22,700Unemployment rate by year-end 2018:2.7%Unemployment rate at year-end 2017: 3.0%
The state’s relatively small economy has bounced back strongly from the 2007-2009 recession, with Boise and areas around the southwest leading the charge. It is benefiting from an influx of population, including educated workers from Seattle and the San Francisco area in search of lower living costs but still with the opportunity to sign on with high-tech firms such as Boise-based Micron. That’s drawing out-of-state investors, from Los Angeles, Chicago and Las Vegas among other places, and driving increased construction of homes as well as retail and industrial spaces. Business and professional services are growing, and the rise in population is driving growth in government employment. Idaho is home to large staffs of federal employees for the U.S. Forest Service, Bureau of Labor Management, Bureau of Reclamation and the Federal Bureau of Investigation in Pocatello. The state also is a draw for tourists attracted to its ski hills and its ample boating and fishing opportunities.
Population: 12,802,0232018 job growth: 1.1%2017 job growth: 0.7%New jobs in 2018: 63,700New jobs in 2017: 42,900Unemployment rate by year-end 2018: 4.3%Unemployment rate at year-end 2017: 4.9%
Illinois has seen its unemployment rate drop to 4.3%, the lowest since 2006. The rate is likely to drop further, as labor-force growth is nil because of all the people leaving the state. Illinois stands out for having one of the highest out-migration rates in the country, along with New York and Hawaii. The out-migration of both of the latter states is related to a high cost of living. In Illinois, it is likely related to the government’s fiscal mess, and high-earners are leaving because they don’t want to pay for it. State and local government pensions are woefully underfunded, the state rainy-day fund is at zero, and the state’s government budget problems are among the worst in the country. The political system has been deadlocked for a long time.
Nevertheless, construction activity is booming, and manufacturing is picking back up off the floor. Leading indicators for growth in the near-term are bullish, as the state is enjoying some catch-up growth after falling behind relative to its peers last year. Job growth in the Chicago area is expected to improve to just over 1.0%. Kankakee and the Quad cities (Rock Island-Moline) will do well, but the agricultural recovery that was boosting Caterpillar, located in Peoria, and much of central Illinois, will likely be threatened by the trade war with China. As a result, the Trump Administration has proposed to send aid to U.S. farmers hurt by tariffs.
Population: 6,666,8182018 job growth: 0.9%2017 job growth: 1.0%New jobs in 2018: 27,000New jobs in 2017: 30,100Unemployment rate by year-end 2018: 3.1%Unemployment rate at year-end 2017: 3.4%
Indiana’s unemployment rate this year is the lowest since 2000. Jobs in construction, health care, and professional and business services will grow the fastest. Employment growth in the capital city of Indianapolis will pick up from 1.4% to 1.7%, and the metro area will outperform many in the Midwest region because of the diversity of its industrial base and its low costs. Indianapolis is building a high-tech sector - Infosys plans to make 3,000 new hires over the next five years - and has attracted many transportation and logistics firms. Other metros across the state are doing even better: Elkhart’s recreational vehicle industry is booming; Ft. Wayne, Evansville, Kokomo and Lafayette are also growing quickly, and the growth rate is strengthening. Indianapolis and Ft. Wayne are attracting migrants that are boosting their labor-force growth. Some of these are immigrants: Ft. Wayne boasts the largest population of Burmese in the world outside of Myanmar. Only Gary and northwestern Indiana are struggling to gain momentum, though at least their employment levels have stabilized.
Population: 3,145,7112018 job growth: 1.0%2017 job growth: 0.1%New jobs in 2018: 15,200New jobs in 2017: 2,000Unemployment rate by year-end 2018: 2.7%Unemployment rate at year-end 2017: 2.9%
Iowa is another farm state coping with the damages to its important agricultural sector as tariff walls keep rising between the United States and its major trading partners. Its major farm revenue producers are grains including corn and soybean, as well as hogs and dairy products. Mexico and China already have levied tariffs on U.S. pork exports. China is also targeting soybeans. In addition, Mexico is increasingly turning to Brazil for its imported corn because it fears that a bid by the United States, Canada and Mexico to renegotiate the North American Free Trade Agreement, now in apparent limbo, could fail and jeopardize its U.S. supplies. Despite those concerns, other sectors and notably manufacturing are doing well and in some cases cite shortages of labor. Iowa’s jobless rate is a low 2.8%. Commercial truck manufacturers Stellar Industries Inc., located in Garner near Mason City, would add workers if it could find them. Facebook is expanding its data center complex in the Des Moines metropolitan area at a projected $1.5 billion cost, and Apple is building a $1.3 billion data center in Waukee. Looking to the future, Iowa public officials also are pouring $3.4 billion into infrastructure projects to improve highways and rebuild bridges over a five-year period.
Population: 2,913,1232018 job growth: 1.5%2017 job growth: 0%New jobs in 2018: 20,800New jobs in 2017: -200Unemployment rate by year-end 2018: 3.4%Unemployment rate at year-end 2017: 3.5%
Significant strains are facing the state’s two key sectors – agriculture and manufacturing – because of recently imposed tariffs on imported steel and aluminum, as well as China’s imposition of retaliatory penalties against an array of U.S. food and other exports. Roughly 19% of jobs in Kansas are supported by businesses that trade with other countries. About 21,000 new jobs are forecast for the state this year, a big improvement over 2017 when there were no net new jobs, and if it holds, a return to the strong growth years of 2012-14. Service sectors are the fastest-growing -- notably professional business services, food services, and transportation and warehousing. Manufacturing is expanding, though there is concern about the rising costs that stem from new tariffs on imported steel and about the availability of skilled labor. Plants that produce chemicals and processed food items are posting a significant business pickup, and so are some manufacturers of durable products. Flow International, a maker of industrial waterjets, is shifting its manufacturing operations employing 110 people to a plant in Kansas owned by parent Shape Technologies, from Washington state.
Population: 4,454,1892018 job growth: 0.3%2017 job growth: 0.6%New jobs in 2018: 5,500New jobs in 2017: 11,600Unemployment rate by year-end 2018: 4.2%Unemployment rate at year-end 2017: 4.5%
Kentucky’s unemployment rate this year is its lowest since 2000. Professional and business services are growing strongly. Manufacturing growth will slow, as much of it is related to the auto industry. Kentucky’s major metros of Louisville and Lexington will continue to see decent job growth of about 1.4%. The area around the Cincinnati airport is seeing lots of new warehousing and distribution jobs. Coca-Cola is adding 430 and Kroger 250. The coal area of eastern Kentucky will continue to be depressed, however.
Kentucky’s fiscal situation continues to be tight, with several public pensions underfunded and a near-zero rainy day balance at the state level.
Population: 4,684,3332018 job growth: 1.0%2017 job growth: -0.1%New jobs in 2018: 19,300New jobs in 2017: -2,100Unemployment rate by year-end 2018: 4.7%Unemployment rate at year-end 2017: 4.7%
State GDP has contracted in each of the past two years, and Louisiana continues to contend with a stubbornly high 4.7% unemployment rate. Despite the upward trend in world oil prices, much of its offshore oil-drilling industry remains becalmed. A significant reason for that is because of the backlash from the explosion eight years ago of the BP Deepwater Horizon exploratory well off Louisiana’s coast. That incident pumped millions of barrels of oil into waters off Louisiana, Mississippi, Alabama and Florida and contaminated hundreds of miles of beaches and coastal marshes, making offshore drilling controversial to this day. The number of offshore rigs operating has slumped to 17 from 47 that were operating before the Deepwater Horizon disaster. On land, the slump in drilling is even more pronounced – plummeting to 39 currently from 168 eight years ago. Louisiana also is in a sensitive position because of current trade tensions with Asia and Europe. The ports of New Orleans, South Louisiana and Baton Rouge handle a significant portion of total U.S. trade with the rest of the world, including 60% of grain exports from the Midwest that now are being threatened with retaliatory tariffs by America’s trade partners. State officials recognize that greater economic diversity would offer more protection from a prolonged downturn in resource-based sectors. DXC Technology opened new offices this year in New Orleans and is hiring 300 people this year, with the intention to eventually take on about 2,000 more over six years for software development and other high-tech ventures. Similarly, software company Accruent plans to create 350 jobs in New Orleans producing IT products used by retail, corporate, higher education and food and beverage sectors for managing their operations.
Population: 1,335,9072018 job growth: 1.1%2017 job growth: 0.8%New jobs in 2018: 7,000New jobs in 2017: 4,700Unemployment rate by year-end 2018: 2.7%Unemployment rate at year-end 2017: 3.1%
Steady expansion has led to near full employment in Maine. With unemployment now under 3%, labor scarcity may become a problem, especially in view of the state’s rapidly aging population, which leaves a smaller pool of people looking for work. Construction industries are booming, and more businesses are looking for building sites. Montana-based SmartLam LLC intends to build a factory in Maine within 18 months to make engineered wood products. LignaTerra Global LLC is building a $30-million plant in Millinocket that will employ more than 100 making extra-strong composite wood-building materials. Drawing on another of the state’s natural resources, Nordic Aquafarms is investing at least $450 million to build a land-based salmon farm at a coastal site in Belfast where it will have ample access to both freshwater and salt water. Demand for medical services is rising as Maine residents age, helping drive a big $512-million expansion of the Maine Medical Center in Portland already underway with construction to last at least through 2019. Tourism is big business for scenic Maine, and officials expect a trend of increases in the number of visitors to continue this year.
Population: 6,052,1772018 job growth: 0.6%2017 job growth: 1.0%New jobs in 2018: 16,300New jobs in 2017: 26,400Unemployment rate by year-end 2018: 4.2%Unemployment rate at year-end 2017: 4.1%
Here's another state like Virginia where the economy is significantly influenced by government spending and employment but with one big difference – Maryland is more oriented toward nondefense spending than is neighboring Virginia. So while the economy is helped by Congress’ agreement on a longer-term budget plan, Maryland isn’t getting as much extra boost as Virginia is, because most of the increase is in defense spending where Virginia is a bigger player. Maryland-based companies are significant participants in life sciences, cybersecurity and information technology, but those areas of federal spending aren’t likely to accelerate this year. Its two biggest economic centers, Baltimore and Silver Spring, gain stability from the spillover of federal government jobs from Washington, D.C. State officials are investing in infrastructure improvement, including road and bridge repair in Baltimore. In addition, a variety of companies including toolmaker Stanley Black & Decker are expanding operations. Stanley Black is adding to its headquarters in the Baltimore area and will add 400 new jobs to its existing 2,300-person workforce. In addition, Bank of America will increase its workforce by about 600 new jobs at a call center and staff support operation in Baltimore, after creating nearly 300 jobs in 2017.
Population: 6,859,8192018 job growth: 1.8%2017 job growth: 1.3%New jobs in 2018: 66,000New jobs in 2017: 44,600Unemployment rate by year-end 2018: 3.3%Unemployment rate at year-end 2017: 3.5%
Boston’s dominant position as a popular location for key growth sectors, including high-tech businesses and health care, gives Massachusetts a significant boost as the region’s economic leader. Amazon has a major expansion project underway in the city’s Seaport District that will add about 2,000 new technology jobs, and Boston remains a contender for Amazon’s coveted second headquarters and the estimated 50,000 jobs that will come with it. Construction is booming with multiple residential, retail, and office building projects under way. Some of Boston’s and the state’s strength is linked to its top-ranked universities, including Harvard and Massachusetts Institute of Technology. For example, Massachusetts ranks among the tops in the nation in terms of inventor patents filed. But tourism is a big revenue generator, too, and a $960-million MGM resort-casino is opening at Springfield to entertain. Overall, GDP growth will accelerate to about 3% this year from 2.6% in 2017, and one of the biggest challenges that employers are likely to face is finding the numbers of employees that they need, particularly as growing numbers of Baby Boomers retire.
Population: 9,962,3112018 job growth: 1.3%2017 job growth: 1.2%New jobs in 2018: 54,700New jobs in 2017: 53,100Unemployment rate by year-end 2018: 4.5%Unemployment rate at year-end 2017: 4.7%
Michigan’s unemployment rate this year is its lowest since 2001. Construction activity continues to boom, but the auto industry is expected to slow, which will hurt growth in Detroit and other areas of the state. Ann Arbor, where the University of Michigan is located, and Grand Rapids in the western part of the state will continue to enjoy robust 2% job growth.
In a positive development, Detroit has been granted release from state oversight of its finances, less than five years since it went into bankruptcy. For the first time in 40 years, its elected leadership has complete control over government functions. It has had a balanced budget each of the past three years, and has received large investments from Ford, Quicken Loans, and Little Ceasars. However, it will have to resume pension and debt payments in 2024, and still needs to spend about 10% of its budget each year to raze abandoned buildings, given its large population decline over the decades.
Population: 5,576,6062018 job growth: 1.1%2017 job growth: 1.4%New jobs in 2018: 32,200New jobs in 2017: 39,700Unemployment rate by year-end 2018: 3.0%Unemployment rate at year-end 2017: 3.3%
The central part of the state’s economy is well-diversified, driven by proximity to the thriving Twin Cities metro region of Minneapolis-St Paul. The state has some 17 Fortune 500 companies in fields ranging from healthcare to banking to food processing that provide a solid base for hiring and expansion. The Mayo Clinic in Rochester is continuing with a long-term expansion plan that will pump an additional $1.2 billion into capital projects from 2018-2022.
Further north, around the port city of Duluth, efforts are under way to diversify beyond its longstanding roots of mining, shipping and manufacturing. Those traditional jobs are important and well-paying –- some 7,500 are engaged in mining and shipping, while manufacturing employs about 6,000. But state officials want to diversify in order to reduce economic volatility, particularly in mining, possibly by developing tourism or other industries that might help keep young people in the area. Their efforts have produced some success stories. Cirrus Aircraft, a maker of personal aircraft, now has about 1,000 employees in the Duluth area.
Population: 2,984,1002018 job growth: 1.4%2017 job growth: 0.5%New jobs in 2018: 16,100New jobs in 2017: 5,500Unemployment rate by year-end 2018: 4.6%Unemployment rate at year-end 2017: 4.8%
One of Mississippi’s major strengths is the growing presence of global automakers in the state. Unfortunately, that also is becoming a source for worry because of the Trump administration’s tough line on trade with its allies. One of the major concerns in Mississippi is that efforts to renegotiate the 24-year-old North American Free Trade Agreement, or NAFTA, with neighbors Canada and Mexico seem to have stalled over U.S. demands. Washington wants a significantly higher percentage of auto production to occur within U.S. borders, a condition that automakers say would disrupt global supply lines and make them less competitive. Nissan and Toyota have large and long-established assembly plants in Mississippi, and about 55,000 jobs statewide depend upon automaking, so the level of anxiety about the outcome of NAFTA talks is high. Unemployment already is edging up, reaching 4.7% in May, with most hiring coming in construction and service sectors, including health care as well as business and professional services. There are glimmers of light if trade talks take a more positive turn, including Toyota’s commitment to invest $170 million at its Blue Springs plant to make the next generation of its popular compact-sized Corolla sedans, with 400 new jobs. The state has deepwater ocean ports and a major shipbuilding industry, helping Ingalls Shipbuilding at Pascagoula win another U.S. Navy contract for $57 million to repair a destroyer damaged in a June 2017 collision.
Population: 6,113,5322018 job growth: 1.2%2017 job growth: 1.0%New jobs in 2018: 35,100New jobs in 2017: 29,400Unemployment rate by year-end 2018: 3.4%Unemployment rate at year-end 2017: 3.7%
There is solid progress in attracting new investment, such as the $60-million plant that French automotive supply company Faurecia is building in Blue Springs to make and assemble door panels and instrument panels. In addition, the increased use of lithium-ion batteries that run on cobalt is raising the possibility of bringing old mines back into production. Soaring prices for cobalt – used widely in electric-powered vehicles – could lead to reopening old lead mines and produce up to 300 new jobs. But concern over global trade relations is high among state officials, especially about stalled efforts to renegotiate the North American Free Trade Agreement, or NAFTA, with neighbors Canada and Mexico. Both are key markets for Missouri farmers. Most recent data, for 2015, show that the state earned $1.1 billion from exports of soybeans, $331 million from corn, $248 million from pork and $107 million in beef – and Canada and Mexico were by far Missouri’s two top trading partners.
Population: 1,050,4932018 job growth: 0.7%2017 job growth: 1.1%New jobs in 2018: 3,300New jobs in 2017: 4,900Unemployment rate by year-end 2018: 3.8%Unemployment rate at year-end 2017: 4.1%
There are a mix of challenges and opportunities ahead for Montana’s basic industries: its agricultural sector faces a global glut of some grains, notably wheat, but that is offset to a degree by a pickup in prices for natural resource commodities like oil and copper generated by healthy U.S. and global economic growth. Montana has substantial reserves of coal, but chances for growth are diminishing as its use for generating electricity decline. The Colstrip power plant east of Billings is scaling back its operations, and Westmoreland Coal Co. that supplies it says it may go bankrupt. There is modest progress in developing a high-tech sector, with Missoula and Bozeman as its hubs. Companies such as Cross Tx, which develops healthcare software, and cyber-security software company Hoplite Industries are increasing their employee headcounts and adding to the state’s profile as a base for high-tech business.
Population: 1,920,0762018 job growth: 1.3%2017 job growth: 0.3%New jobs in 2018: 12,900New jobs in 2017: 2,900Unemployment rate by year-end 2018: 2.9%Unemployment rate at year-end 2017: 2.9%
Unemployment is low at 2.9%, but, after slowing in 2017, economic growth is sluggish in rural areas particularly, where low agricultural commodity prices hold back Nebraska’s substantial farm economy. Farm incomes are forecast to decline by nearly 7% this year, though some of the slack should be picked up by manufacturing, construction and service businesses. Also, the Trump Administration has proposed to send aid to U.S. farmers hurt by tariffs.
Among other products, the state produces farm machinery, Kawasaki powersports equipment and motorcycles, and products from Kellogg’s and Purina Dog Food. Hiring is brisk among factories and service industries, to a degree that leads Nebraska businesses to cite labor shortages and quality as their top issue. In contrast to the strain being experienced in rural areas, Nebraska’s major metropolitan centers of Omaha and Lincoln are thriving and generating strong hiring by their financial sectors as well as in professional and business services. Omaha continues to develop a high-tech core, most recently attracting Silicon Valley financial technology firm i2c Inc., which is bringing 300 jobs to a new operations center in the city.
Population: 2,998,0392018 job growth: 2.9%2017 job growth: 3.3%New jobs in 2018: 38,900New jobs in 2017: 42,600Unemployment rate by year-end 2018: 4.5%Unemployment rate at year-end 2017: 4.9%
Nevada is a regional and national standout as a construction boom gathers steam in Las Vegas, and manufacturers, notably electric-car maker Tesla, ramp up operations at a multi-billion-dollar factory near Reno that is expected to provide as many as 10,000 jobs when it is completed. Tesla is the biggest but far from the only clean-energy firm investing and creating jobs in Nevada. Panasonic is working with Tesla and has about 1,500 employees, while others such as tech company Switch are planning massive solar farms in the sunny desert state. Ample construction jobs are open on Las Vegas’ fabled strip, where six new casino projects are underway that are expected to boost hotel-room capacity by 10% upon completion in 2020. It’s also becoming a sports center, attracting a professional hockey team and will become the new home of the Oakland Raiders football franchise in 2020. That’s an extra boon when the gaming industry also is experiencing an upsurge of domestic and international tourists. Las Vegas’ housing markets are strong, not at the boom levels they touched in the mid-2000s, but strengthening steadily and benefiting from a larger population of retirees and transplants from higher-cost neighboring states.
Population: 1,342,7952018 job growth: 1.8%2017 job growth: 1.0%New jobs in 2018: 12,100New jobs in 2017: 6,900Unemployment rate by year-end 2018: 2.6%Unemployment rate at year-end 2017: 2.6%
Activity is humming across a wide variety of economic sectors from biotechnology to defense production and manufacturing. To some extent, New Hampshire benefits from the spillover from the Boston metro area, and it is seizing that advantage and running with it. Manchester is transforming itself from an historic textile mill town to a center for firms involved in biomedical engineering and life sciences. Hichiner Manufacturing Co. Inc. is spending $50 million to expand its operations in Milford to produce castings for the aerospace, defense and automotive industries. Meanwhile, defense contractors such as BAE Systems are increasing an already robust presence in the state. BAE is adding 580 positions this year in skilled fields including engineering, operations and manufacturing. Job growth is strong in leisure and hospitality fields, as well as in other service industries including education and health care. The combined result is a significant boost to projected economic expansion in 2018, with GDP growth likely to rise to 3.1% from 1.9% in 2017.
There are some causes for worry, principally because of a shrinking working-age population. In addition, the risk of an outright trade war as the U.S. and its competitors and allies levy tariffs on one another could affect about $30 million a year of exports from the state to Canada, Mexico, China and the European Union. New Hampshire exports building materials, industrial adhesives, clothing, lamps and seafood among other items.
Population: 9,005,6442018 job growth: 1.4%2017 job growth: 1.4%New jobs in 2018: 56,900New jobs in 2017: 56,300Unemployment rate by year-end 2018: 4.3%Unemployment rate at year-end 2017: 4.7%
New Jersey saw relatively weak growth in 2017 until late in the year, when the state's economy picked up some momentum that carried into 2018. Some expansionary vigor continues in manufacturing and in the leisure and hospitality industry. Atlantic City is enjoying a modest rebound with two new casinos coming online. That supports jobs and growth in tax revenues, plus gaming will get an extra boost with the recent legalization of sports betting. Global company TEVA Pharmaceuticals USA is relocating its U.S. headquarters to Parsippany-Troy Hills from Pennsylvania, which will result in about 1,000 jobs, including transfers to the new location. New Jersey has a rapidly aging population, which will support employment increases in healthcare, one of the state’s growth industries in recent years. But the risk of an expanding trade war with China is a potential headwind because of the importance of trade with China through the Port of New York and New Jersey. China is New Jersey’s fourth-largest trading partner behind Canada, Mexico and Britain and will suffer if disruptions to global supply chains lead to reduced trade volumes. The fastest growing source of job creation currently is in transportation and warehousing, which would be hurt if trade falls off.
Population: 2,088,0702018 job growth: 1.3%2017 job growth: 0.4%New jobs in 2018: 10,700New jobs in 2017: 3,300Unemployment rate by year-end 2018: 4.9%Unemployment rate at year-end 2017: 6.0%
New Mexico’s economy has improved this year, with good growth in most industries. It is also one of the few states to have seen a complete recovery in the number of operating oil rigs back to the 2014 peak. But the state’s economy still relies to a significant degree on mining. State authorities are making efforts to diversify the economy through a series of measures, including development of manufacturing jobs in the solar industry. Though China has captured global markets for conventional solar panels, New Mexico is aiming to exploit advanced technologies such as concentrating solar power to supply new sources of clean energy. It estimates that could create about 6,800 new jobs a year directly and through manufacturing and supply chains from 2018 through 2030. Construction industries are doing well, partly because of a mild winter that kept homebuilding on a healthy track. In addition, a major project is underway in Los Lunas where Facebook is building a $1 billion data center that employs about 1,000 during construction and will offer the opportunity of advanced, well-paying jobs when completed late this year.
Population: 19,849,3992018 job growth: 1.2%2017 job growth: 1.3%New jobs in 2018: 111,600New jobs in 2017: 121,500Unemployment rate by year-end 2018: 4.4%Unemployment rate at year-end 2017: 4.7%
New York will continue to see job growth in key areas, including on Wall Street and among its vibrant healthcare sector, but there also are a number of risks facing the state’s economy. The labor market is tightening and house prices are steadily rising. Federal tax reform has scaled back on state and local tax deductions, which may play out in a weaker market for luxury goods and real estate. Concern about rising global trade tensions also is a potential downside, not so much because New York is a major exporting state but because it has an important role in channeling capital inflows and in finance, both areas that may be adversely affected. New York City is still a magnet for the best and brightest in financial fields. It now also is home to a new 80-story, $2.7-billion office building at the World Trade Center. It’s also becoming a biopharma hub, with the addition of a new life-sciences incubator, JLABS@NYC that will foster development of biotech, pharmaceutical, medical device and consumer health companies. The three biggest employers in the state – still adding to their staffs – are healthcare systems Northwell Health with 54,000 employees, Montefiore Health System with 32,000 and Mount Sinai Health System with 29,000. In an indication how important employment in professional and business services and healthcare are to New York’s economy, the two sectors combined accounted for about half of last year’s economic expansion and continue to be key drivers of growth.
Population: 10,273,4192018 job growth: 2.3%2017 job growth: 1.7%New jobs in 2018: 102,500New jobs in 2017: 74,100Unemployment rate by year-end 2018:4.1% Unemployment rate at year-end 2017: 4.5%
The hotspots of North Carolina’s growth are still the Charlotte and Raleigh-Durham areas, with job growth about 3%. Jobs are attracting migrants from in-state and out-of-state. Housing construction is still on a tear in these two metro areas, because of extremely low levels of inventory. Charlotte is a center for financial services (three new bank towers are being developed downtown) and health care, while 13% of Raleigh-Durham’s jobs are in tech. The Triangle area (Raleigh-Durham-Chapel Hill), along with Fayetteville, is accounting for almost all of the state’s growth in tech job openings, which just hit a new peak in June. This also indicates the shortage of skilled labor in the state. Professional and business services growth in Raleigh is also very strong, especially in the life sciences. Job growth in the rest of the state seems to be moderating, though unemployment rates are declining in most metros.
North Carolina’s 3% corporate tax rate and business-friendly climate will continue to attract new business to the state.