Connecticut Ranks 4th Nationally in 3Q GDP Growth at 5.6%

Connecticut’s economy expanded at a 5.6% annual rate in the third quarter of 2025, ranking the state fourth nationally in real gross domestic product growth, according to new estimates released by the U.S. Bureau of Economic Analysis.

Only Kansas (6.5%), South Dakota (6.3%) and Arkansas (5.8%) posted faster growth for the July-through-September period. Pennsylvania and North Carolina also recorded 5.6% growth.

Nationally, U.S. real GDP rose at a 4.4% annual rate, BEA said. Connecticut’s third-quarter increase followed 4.6% GDP growth in the second quarter, according to BEA.

An industry-level breakdown showed Connecticut’s growth was driven primarily by private-sector gains.

Durable-goods manufacturing was the largest single contributor, adding 1.25 percentage points to the state’s third-quarter growth rate. Finance and insurance contributed 1.12 percentage points, while manufacturing overall added 1.05 percentage points, offset in part by nondurable-goods manufacturing, which subtracted 0.2 percentage points.

Other major contributors included information (0.81 percentage points) and professional, scientific and technical services (0.62). Additional gains came from retail trade (0.46), health care and social assistance (0.29), utilities (0.22) and wholesale trade (0.2).

Not all sectors contributed positively. Construction subtracted 0.1 percentage points from the state’s third-quarter growth.

The Connecticut Business & Industry Association, the state’s largest business organization, said the report highlights the strength of the state’s economy and the need to build on that progress.

“This performance is a testament to the strength and adaptability of our employers and employees who are navigating ongoing uncertainty and rising costs and finding innovative ways to boost productivity and drive growth,” said CBIA President and CEO Chris DiPentima.

DiPentima also said employers “continue to support their workforces with wages outpacing inflation,” but noted that Connecticut’s personal income growth slowed to 39th nationally.

He said the state’s fiscal position is also playing a role in business decision-making.

“The fiscal stability the state has built in recent years is helping give businesses the confidence they need to make important long-term investments,” DiPentima said.

Still, he urged state lawmakers to prioritize competitiveness and cost issues as the 2026 legislative session approaches.

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