In the first quarter of 2025, the U.S. saw an overall 0.5% contraction in real GDP at an annualized rate. Visual Capitalist+2Eye On Housing+2 Only 10 states posted positive real-GDP growth; South Carolina led with about +1.7%. In contrast, Iowa and Nebraska plunged significantly, each with around –6.1% declines. Bureau of Economic Analysis+2Eye On Housing+2
Key sectors dragging down growth: finance & insurance (falling in all 50 states + DC), agriculture/forestry/fishing/hunting, and wholesale trade. Real estate and rental & leasing is one of the few sectors broadly contributing to growth, especially in places like South Carolina. Bureau of Economic Analysis+1
Implications for government contracting / federal agencies:
- Federal contractors operating in states with sharp GDP declines may face reduced demand, slower state government payments, or budget tightening.
- Projects dependent on state/local matching funds could be at risk in states with weakening economies.
- On the flip side, sectors that are resilient or growing (e.g. real estate/rental, leasing) may offer more stable contracting opportunities.
- Agencies should be mindful of regional variation when planning procurement, grants, or deployment of resources; some states may need more stimulus or contract work to stabilize.
Read more: https://www.visualcapitalist.com/mapped-real-gdp-growth-by-state-in-q1-2025/