California's economy is now bigger than the United Kingdom. If the state was an independent country, it would have the fifth biggest economy in the whole world.
Surpassed UK's Economy
California, which has a population of 40 million people, managed to surpass the economy of the United Kingdom, which has a far larger population of 65 million people.
New federal data released on Friday, May 4, revealed that the Golden State's gross domestic product of $2.7 trillion surpassed UK's 2.6 trillion.
California's GDP increased by $127 billion from 2016 to 2017. UK's economic output slightly dropped over that time in terms of U.S. dollars, partly because of fluctuations in exchange rate. World Bank figures also show that the British GDP has steadily fallen from $3 trillion in 2014.
The state's economy is now behind the United States, China, Japan, and Germany.
Economic Boom Driven By Worker Productivity
California's tech sector in Silicon Valley and the entertainment capital of the world, Hollywood, have immensely contributed to the economy of the state. Most of economic activities are around big cities along the coast namely San Jose, Los Angeles, San Diego, and San Francisco.
Experts said that California's strong economic performance is driven by worker productivity. Its population comprises only 12 percent of the whole nation's population but the state has 16 percent contribution to the total job growth between the years 2012 and 2017.
"We have the entrepreneurial spirit in the state, and that attracts a lot of talent and money," said Sung Won Sohn, from California State University Channel Islands. "And that's why, despite high taxes and cumbersome government regulations, more people are coming into the state to join the parade."
Contribution Of California's Economic Sectors
California Department of Finance chief economist Irena Asmundson said that with the exception of agriculture, each of California's economic sectors made contributions to the state's higher GDP.
The real estate and financial services grew $26 billion, while the information sector increased by $20 billion. Manufacturing climbed by $10 billion.
Other US States With The Biggest Economies In The World
California was also in fifth place in 2002 but fell to the 10th place in 2012 following the recession. Texas and New York are also included in the latest list of the largest economies in the world. Texas is in 11th place with an economy of $1.7 trillion and New York is in the 13th spot with $1.5 trillion.
