How COVID-19 Affected Arizona’s Economy

The U.S. economy reported its worst quarterly decline in modern history during the COVID-19 pandemic, with gross domestic product shrinking at an annual rate of 31.4% in the second quarter. The economy bounced back in the third quarter, but efforts to contain the virus’s spread throughout 2020 still resulted in a 3.5% annual economic contraction in the United States.

Arriving on the heels of a historic period of growth, COVID-19 brought about a decline in gross domestic product in every state in the country. However, no two state economies are alike, and partially as a result, some states were hit far harder than others.

Arizona’s 0.9% economic contraction in 2020 ranks as the third smallest among states. While sectors like entertainment and travel were hit hard due to pandemic-related shutdowns, other industries, like agriculture, information, and utilities thrived. During a period of mass layoffs across multiple industries, employment in Arizona’s utilities sector expanded by 9.4%, more than any other industry in the state and the sector’s strongest job growth in the country.

Due in part to strong job growth in the state’s utilities sector, overall employment fell by just 3.1% in Arizona in 2020, well below the 5.8% employment decline nationwide that year.

States are ranked based on the percentage change in real GDP from 2019 to 2020. Data on GDP and industry-specific real GDP came from the BEA. Data on average annual employment and the seasonally adjusted monthly unemployment rate each came from the Bureau of Labor Statistics.

Rank State Change in GDP, 2020 (%) April 2021 unemployment (%) Change in nonfarm employment, 2020 (%)
1 Hawaii -8.0 8.5 -9.4
2 Wyoming -7.0 5.4 -4.1
3 Oklahoma -6.1 4.3 -4.9
4 New York -5.9 8.2 -10.3
5 West Virginia -5.5 5.8 -6.6
6 Louisiana -5.5 7.3 -1.8
7 Vermont -5.4 2.9 -9.3
8 Michigan -5.4 4.9 -5.8
9 Alaska -4.9 6.7 -8.7
10 Tennessee -4.9 5.0 -17.5
11 New Hampshire -4.7 2.8 -6.7
12 Nevada -4.6 8.0 -10.4
13 Rhode Island -4.5 6.3 -8.8
14 Wisconsin -4.5 3.9 -6.3
15 Pennsylvania -4.4 7.4 1.9
16 Maine -4.1 4.8 -6.4
17 Connecticut -4.1 8.1 -7.7
18 New Jersey -4.1 7.5 -8.4
19 South Carolina -4.1 5.0 -5.1
20 Illinois -4.0 7.1 -7.1
21 Ohio -4.0 4.7 -6.1
22 Delaware -3.9 6.4 -6.0
23 Massachusetts -3.8 6.5 -9.0
24 Minnesota -3.7 4.1 -6.9
25 Kentucky -3.7 4.7 -5.6
26 Missouri -3.6 4.1 -4.8
27 North Dakota -3.5 4.2 -6.7
28 Texas -3.5 6.7 -4.3
29 New Mexico -3.1 8.2 -6.7
30 Indiana -3.1 3.9 -5.5
31 Montana -3.0 3.7 -3.1
32 Kansas -3.0 3.5 -4.6
33 Florida -2.9 4.8 -5.2
34 Oregon -2.8 6.0 -6.6
35 Mississippi -2.8 6.2 -4.3
36 California -2.8 8.3 -7.4
37 Alabama -2.7 3.6 -4.3
38 Maryland -2.6 6.2 -6.8
39 Arkansas -2.6 4.4 -3.0
40 Georgia -2.5 4.3 -4.6
41 North Carolina -2.5 5.0 -4.3
42 Virginia -2.5 4.7 -5.0
43 Iowa -2.3 3.8 -5.1
44 Nebraska -2.1 2.8 -3.6
45 South Dakota -1.7 2.8 -3.4
46 Colorado -1.5 6.4 -5.2
47 Idaho -1.1 3.1 -0.7
48 Arizona -0.9 6.7 -3.1
49 Washington -0.7 5.5 -5.3
50 Utah -0.1 2.8 -1.6

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This article was published on June 16, 2021 and is reproduced with permission from The Center Square.