Dozens of industries across all 50 states comprise the U.S. economy — the world’s largest economy accounts for more than a quarter of global GDP. Several states, including California and New York, generate more output than several countries, including Belgium, Poland, and Turkey. Texas’s largest industry alone produces more in economic output than the entire economies of 19 states.
Real estate is by far the largest industry in the United States and the largest contributor to the economy in most states. But since housing is a universal need irrespective of geography, it fails to illuminate regional economic differences. Apart from real estate, economic value is created in a variety of ways across the country. In order to capture the unique economic features of each state, 24/7 Wall St. reviewed the largest industry in each state by GDP contribution — excluding real estate.
Gross domestic product (GDP) is the estimated value of the goods and services produced by a nation’s economy. This figure can also be calculated for regions and for industries. Income from an industry is earned by owners of capital through interest, rent, and profit, as well as by workers through wages.
Martin Kohli, a senior regional economist with the Bureau of Labor Statistics, explained in an interview that because the GDP — or economic output — of an industry reflects incomes earned by these individuals, a state’s largest industry is almost always relatively high paying. Though many people work in retail trade, for example, “you don’t see retail trade as the largest industry in any state.”
> Largest industry: Federal Reserve banks, credit intermediation, and related services
> Industry GDP contribution: $88.06 billion
> Industry output as pct. of GDP: 7.1%
> Industry private workforce: 163,758
New York’s $1.2 trillion economy is the third largest in the country, trailing only California and Texas. As a global banking and finance hub, New York City is the state’s major economic engine. Down from $98.1 billion the year prior, the banking industry now contributes $88.1 billion to the state’s total GDP. Despite the contraction, the industry remains the largest in the state.
The average annual salary of workers in the United States is $48,320. In the largest industry of 38 states, the average annual salary is higher. Workers in these industries also tend to earn more than the national average salary for that industry.
Subsectors of the health care industry dominate the economies of 17 states. In nine states, hospitals and nursing homes is the largest industry, and in another eight states, the ambulatory health care services sector comprises the largest share of total GDP.
Many of these states, including Florida, Maine, and Vermont, are home to especially high shares of residents 65 and older. Since the elderly typically require more frequent medical care than younger adults, the health care industry will likely only expand in the coming years as the baby boom generation continues to age. The BLS projects employment in the health care and social assistance industry to increase by at least 20% over the next decade, well above the average projected growth rate.
To identify the largest industry in each state, 24/7 Wall St. reviewed each state’s industries and their respective GDP contributions from the Bureau of Economic Analysis. All BEA data is as of 2014, the most recent period for which data is available. With only a few exceptions, the largest industry in each state is real estate. In order to identify regional industrial differences, we excluded the real estate sector in our examination. Employment and wage figures for private employees in each industry came from the Quarterly Census of Employment and Wages (QCEW). The QCEW and BEA industry data were aligned according to their NAICS codes.