According to the Bureau of Economic Analysis, which released its report Wednesday, Maine’s increase ranked 16th in the U.S. Nationally, the GDP rose 1.9 percent in the third quarter – a sharp drop from the 3.8 percent growth in the second quarter of 2015 – and New England’s GDP as a whole rose 2.0 percent.
The state’s economic output grew from $54.6 billion in the third quarter of 2014 to $55.8 billion a year later. That’s less than the 2.5 percent increase cited by the bureau, but is based on annualized rates and other factors that affect the formulation.
Nationally, the bureau said retail trade and the combination of health care and social assistance accounted for much of the economic growth in the quarter, which held true in Maine as well.
Retail trade contributed 0.54 percentage points to the state’s overall growth, and health care and social assistance contributed 0.58 percentage points. Construction also picked up in the quarter, along with manufacturing of non-durable goods – products expected to last three years or less.
Higher retail spending last summer was likely a result of falling gas prices, said Curtis Picard, executive director of the Retail Association of Maine. Picard said the decline in gas prices picked up steam last summer and gave Mainers more money to spend on other things. The average price of a gallon of gasoline in July 2014 was $3.61, and by July 2015 it was $2.75 and continuing to fall.
Picard also said he attended a conference recently in which a speaker said to expect increased purchasing by young adults. As the economy has picked up and unemployment has fallen, he said, more recent college graduates have been able to move out of their parents’ homes. That means increases in the sales of furniture and household goods.
Maine retailers may have benefited from the start of that trend last summer, Picard said, and he expects it will carry over into this year.
Amanda Rector, Maine’s state economist, concurs with Picard about the economic boost in Maine from falling oil and gas prices.
Rector said she expects the numbers to show solid growth in the fourth quarter of 2015, although she said holiday sales were up only slightly from 2014.
“But it’s nice to see growth on growth,” she said.
Rector noted that Mainers continue to benefit from sharply lower heating oil costs and mild weather, which provided many households with even more disposable income this winter.
Maine’s GDP increase for the third quarter of 2015 was tops in New England. Massachusetts had the second-strongest growth, with its GDP increasing 2.2 percent. Rhode Island and Vermont followed with increases of 2.1 percent. New Hampshire was fifth, at 1.7 percent, and Connecticut lagged at 1.6 percent growth.
The only sector that contracted in Maine during the quarter was the wholesale trade, which subtracted 0.34 percentage points from the overall increase in the state.
South Dakota posted the biggest increase in GDP during the quarter, rising 9.2 percent. The slowest growth was in its neighboring state, North Dakota, where the economy contracted by 3.4 percent.