California is a State, bigger than UK

California is now the world’s fifth-largest economy, according to data released Friday morning by the U.S. Department of Commerce. Its 2017 Gross State Product was $2.747 trillion, surpassing the United Kingdom’s $2.625 trillion Gross Domestic Product.

The new ranking marks the highest point for California’s relative GSP since 2002. The state had slipped to the 10th-largest world economy in 2012, when its GSP was just $2.003 trillion.

Texas was the U.S.’s next highest-producing state with a GSP of $1.696 trillion, followed by New York, Florida and Illinois. Vermont, Wyoming and Montana produced the least valuable goods and service in the U.S.

California trails only Germany ($3.685 trillion), Japan ($4.872 trillion), China ($12.015 trillion) and the United States (16.644 without California) among the world’s leading economies.

California’s strong economic performance relative to other industrialized economies is driven by worker productivity, said Lee Ohanian, an economics professor at University of California, Los Angeles and director of UCLA’s Ettinger Family Program in Macroeconomic Research. The United Kingdom has 25 million more people than California but now has a smaller GDP, he said.

Most of the economic activity is centered around California’s big cities along the coast – including San Francisco, San Jose, Los Angeles and San Diego.

“The non-coastal areas of CA have not generated nearly as much economic growth as the coastal areas,” Ohanian said in an email.

The state calculates California’s economic ranking as if it were a country by comparing state-level GDP from the Bureau of Economic Analysis at the U.S. Department of Commerce with global data from the International Monetary Fund.

The data demonstrate the sheer immensity of California’s economy, home to nearly 40 million people, a thriving technology sector in Silicon Valley, the world’s entertainment capital in Hollywood and the nation’s salad bowl in the Central Valley agricultural heartland. It also reflects a substantial turnaround since the Great Recession.

All economic sectors except agriculture contributed to California’s higher GDP, said Irena Asmundson, chief economist at the California Department of Finance. Financial services and real estate led the pack at $26 billion in growth, followed by the information sector, which includes many technology companies, at $20 billion. Manufacturing was up $10 billion.