California, along with Oregon, had the nation’s highest rate of economic growth in 2015 and has vaulted to sixth largest economy in the world.
The federal Bureau of Economic Analysis says that California’s economy expanded by 5.7 percent in 2015, second only to Oregon’s 5.9 percent in nominal terms and tied with Oregon at 4.1 percent in constant dollars.
The BEA pegged the state’s economic output last year at $2.46 trillion and with several of its international rivals, particularly Brazil and France, experiencing slumps, that would place California at sixth place, behind only the U.S., China, Japan, Germany and the United Kingdom. The state had been the eighth largest economy, and passed France and Brazil with the release of the latest report.
The BEA data were released just as Gov. Jerry Brown and legislators are finalizing a 2016-17 budget that’s based, in part, on recent declines in revenue growth and Brown’s oft-voiced warnings that the state is overdue for recession after a very long recovery from last decade’s Great Recession.
“The next recession is getting closer,” Brown warned in his revised budget last month, “even if we cannot tell exactly when it will hit.”
Brown’s warning is rooted, in part, on a global economic slowdown because the state’s economy is highly interconnected with that of other nations.
The most recent estimates of global economic trends say that while the U.S. and China both saw gains in 2015, Japan, Germany and the United Kingdom faded slightly, and the economies of France, Italy and Brazil dropped sharply – in Brazil’s case by nearly 30 percent. In 2014, California and Brazil were virtually tied, but by 2015 California’s economy was more than a third larger.
In broad BEA categories, California’s finance and insurance sector was the largest in 2015 at $535 billion, with government at $300 billion and manufacturing at $278 billion following. Agriculture, once an economic mainstay, was just $39 billion.