California Surpasses UK In World Economy Rankings
California’s economy has surpassed that of United Kingdom’s, which made them the fifth of the world’s largest economies. California’s gross domestic product increased by $127 billion from 2016 to 2017, exceeding $2.7 trillion. On the other hand, the UK’s economic output shrunk during that period partly because of exchange rate fluctuations.
The data presents California’s sheer immensity regarding the economy. California houses nearly 40 million people with a booming technology sector in Silicon Valley, the entertainment capital in Hollywood, and the nation’s salad bowl in the agricultural heartland of Central Valley. The figures in the data show a significant turnaround since the Great Recession.
Irena Asmundson, the chief economist at the Department of Finance of California, said that all of California’s economic sector, excluding agriculture, contributed to its higher GDP. Financial services and real estate comprised a majority of their economy at $26 million. The information sector is the second largest contributor at $20 billion. Meanwhile, manufacturing was at $10 million.
In 2002, California also placed fifth in the world’s largest economies, but they fell to the tenth spot in 2012 following the Great Recession. Since that time, the state has added 2 million jobs and grew its GDP to $700 million.
California currently makes up 12 percent of the United States’ population but contributed 16 percent of the country’s job increase between 2012 and 2017. Its share to the national economy also increased from 12.8 percent to 14.2 percent during the period.
Lee Ohanian, an economics professor at the University of California, Los Angeles, said that the state’s worker productivity caused its strong economic performance. California’s economic center concentrated in the coastal metropolises around places such as San Francisco, San Jose, Los Angeles, and San Diego. Meanwhile, the non-coastal areas have not produced much economic growth compared to the coastal regions.
By comparing state-level GDP from the Bureau of Economic Analysis at the US Department of Commerce along with data from the International Monetary Fund, the state calculates California’s economic ranking as if it were a country. The overall GDP of the US, China, Japan, and Germany surpassed California’s economic output.