BEA released its Q4 2025 and preliminary annual GDP by state data this morning — the first time national and state estimates have come out together in a single combined release. (It was originally scheduled for March 27 but got pushed to today because of the October–November government shutdown.)
I wont bury the lede: Connecticut was the 12th fastest growing economy in the country in 2025, growing 2.39% — comfortably ahead of the national average of 2.11%. Our now $375B economy added **$19.6 billion** in GDP over the year.
To put this in context, prior to the pandemic we were one of the worst performing economies in the country. From 2008-2018 we contracted. Then went flat. And now we are back in rarified air.
If you've been following along, you'll recall that through Q3 we were the 3rd fastest growing economy in the country, right behind Massachusetts and New York. What happened? Q4 happened — to everyone. National GDP growth came in at just 0.5% in the fourth quarter, revised down from an initial estimate of 1.4%. Only 35 states grew at all in Q4. Private goods-producing industries declined 1.8%, government declined 7.8%. A soft quarter nationally reshuffled the full-year rankings, but the story for Connecticut remains strong.
Connecticut and Massachusetts (both at 2.45%) once again lead New England. The rest of the region has some work to do — Rhode Island at 42nd, Vermont at 37th, Maine at 47th. We continue to be the economic engine here.
A few things jump out from the national picture. The Sun Belt states that dominate a lot of the growth narrative — South Carolina, Florida, Texas, North Carolina — are all in the top 10, as expected. But so are we, New York (#3), California (#9), and Massachusetts (#11). This isn't just a Sun Belt story.
What's driving the CT economy
The ~$20 billion in GDP growth was broad-based, but a few sectors did the heavy lifting.
**Professional, scientific, and technical services (+5.2%)** was the single largest industry contributor. This is the consulting, engineering, R&D, legal, and technical talent base — and at 5.2% growth it's outpacing the overall economy by a wide margin. This sector is now $28 billion and increasingly defines what Connecticut does.
**Durable goods manufacturing (+4.3%)** continues to be the workhorse. This is our defense industrial base — Pratt, Sikorsky, Collins, Electric Boat, and the hundreds of smaller companies in their supply chains. Durable goods manufacturing is now $33 billion and has been the most consistent growth engine in the state for several years running.
**Health care and social assistance (+3.4%)** was another strong contributor — and at $33 billion it's one of our largest sectors outright.
**Real estate and rental and leasing (+2.2%)** grew steadily. At nearly $50 billion this is the single largest industry line in the state, so even modest percentage growth translates to big absolute numbers.
**Finance and insurance (+1.7%)** grew, but at a slower pace than the economy overall. This is a $50 billion sector — the second largest in the state — spanning Hartford's insurance carriers, Fairfield County's hedge funds and asset managers, and banking statewide. The detailed sub-industry breakout for 2025 isn't available yet, but as of 2024, insurance carriers alone account for roughly $24 billion of this bucket, with securities and investment management at $12 billion and banking at $10 billion. At 1.7% growth, F&I is contributing but not leading. This trend emerged recently so we have prioritized our work at the DECD to address.
**Transportation and warehousing (+8.8%)** was the fastest growing major sector by percentage — a smaller base but moving quickly.
**Wholesale trade (+3.4%)** rounded out the top contributors.
Opportunities to Improve
**Nondurable goods manufacturing (-5.2%)** was the biggest drag on growth. Chemical manufacturing and other nondurables have been under sustained pressure for a long time — a meaningful offset to the strength in durables. Overall manufacturing still grew 2.1%, but that number masks a tale of two economies: durables up 4.3%, nondurables down 5.2%.
**Retail trade (-1.2%)** declined, consistent with the national consumer pullback in Q4 and broader structural shifts in the sector.
**Federal civilian (-5.5%)** is the obvious one. The government shutdown and ongoing federal workforce reductions hit us directly. Federal civilian GDP dropped 6.1% in Q4 alone. Military was also down 4.1% in Q4, though roughly flat for the full year.
**Finance and insurance (+1.7%)** isn't declining, but it's growing well below its historical pace. For a sector this large in the CT economy, the difference between 1.7% and 3%+ growth is billions of dollars. We're on it.
The big picture
Ours is now a **$375 billion economy** - and growing. The CT economy continues to punch above its weight, led by professional services, advanced manufacturing, health care, and real estate, with finance and insurance providing a massive foundation. The drags are real but concentrated: nondurables, retail, and the federal pullback.
CONNECTICUT IS BACK. We are going to continue our strategy of investing behind the trendlines we are seeing, and where Connecticut has real competitive advantage.
Join us!
*Source: BEA (https://bea.gov/news/2026/gdp-third-estimate-industries-corporate-profits-state-gdp-and-state-personal-income-4th).