An annual study published by Business Insider ranks every state economy in the United States. This year, Providence Business News reports that Rhode Island has jumped from number 33 to number 9 on the list. This major jump is the result of sound economic policies across the state that have led to a turnaround after the recession.
How State Economies Are Ranked
Business Insider uses a variety of metrics to rank the state economics. They factor in metrics from the labor market including average weekly wages, wage growth, job growth, and unemployment rates. They also look at the macroeconomic picture of per capita GDP and GDP growth. From there, the metrics are averaged between the changes with the YTD growth ending in December. The numbers are pulled from a combination of government federal and state data sets. You can read more about how the numbers are determined here.
Why Rhode Island Made Such A Dramatic Jump
The biggest drive behind Rhode Island’s dramatic jump is that last year, Rhode Island saw the third highest rate of wage growth. Between December 2016 and 2017, average hourly wages increased by 8.3%. Rhode Island also experiences very high GDP growth in the third quarter. The average rate across the country was 2.9%, while Rhode Island saw a 3.5%. As a result of the growth, Governor Gina M. Raimondo released a news statement stating “We’ve invested in job training and education. We’ve opened our doors to new businesses and put cranes in the air. And we’ve slashed our unemployment rate by one-third. Today we have more jobs than at nearly any other time in our state’s history, and we’re still on the move.”
How Other New England States Stack Up
Massachusetts was the highest ranking New England state on the list. The status is credited to the thriving tech firms that increased its GDP per capita and high weekly wages. Other New England states have no ranked as well. Connecticut is ranked 22nd with a low rate of job growth. New Hampshire is ranked was ranked 24th as a result of decreasing hourly earnings. Maine was ranked 27th because of its high unemployment rate of 3% and lowest GDP growth in the country. Finally, Vermont was ranked as 34th as a result of having the eighth-worst weekly wage growth in the country.
Great News For The Real Estate Market
The favorable economic conditions of the state is great news for the real estate market. Anytime an economy grows the real estate market booms. Specifically, with the increase in wages, more people are able to purchase a home. The last year has been a growth year for the real estate market as well. With the economy booming, Rhode Island should see more even more buyers interested investing in a home in 2018. Furthermore, with new business and GDP growth, more people will be looking to relocate to Rhode Island to benefit from the great economy.