A cluster of Southern states will lead the nation in economic growth next year, according to a new report from Standard & Poor’s, the credit ratings agency. The report predicts that the economic output will grow by more than 3.5 percent next year in those four states: Arkansas, Louisiana, Oklahoma and Texas.
According to the quarterly report, which forecasts how the national economy is expected to fare through the remainder of this year and into the next, the recovery has been wobbly, but there are reasons to believe it will continue. The labor market has improved consistently over the past 12 months, for example, and a big drop in oil prices — roughly 20 percent since June — could make it easier for Americans to open their wallets, contributing to the economy.
“On balance,” the S&P report’s authors write, “we believe continued slow economic growth is most likely.”
But that outlook isn’t uniform across the country, according to the report. State governments are generally stable, though some suffer either from poorly executed fiscal policy or a reality that has fallen short of expectations. Local governments are generally in a good place, too, though a lot depends on how they’re managed.
Also forecast: The recovery should be stable and modest in New England, though economic growth will be slow because of demographics. The South Atlantic region — defined below — will be the Eastern Seaboard’s shining star, thanks to rebounding real estate and construction in Florida and the manufacturing, service and hospitality sectors in Georgia and North Carolina. The West North Central region (which includes a number of Midwestern and Western states) will likely see growth through the rest of this year and next. A handful of Southern states that comprise the West South Central region will lead the nation in terms of GDP growth.
Here’s a look at some of the report’s predictions for 2014 and 2015 for the following nine regions identified by S&P:
- New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
- Mid-Atlantic: New Jersey, New York, Pennsylvania
- South Atlantic: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia
- East South Central: Alabama, Kentucky, Mississippi, Tennessee
- East North Central: Illinois, Indiana, Michigan, Ohio, Wisconsin
- West North Central: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota
- West South Central: Arkansas, Louisiana, Oklahoma, Texas
- Mountain: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming
- Pacific: Alaska, California, Hawaii, Oregon, Washington