Often one can hear the different industries in Montana claim to be the state’s largest. Agriculture is commonly considered Montana’s largest, but a recent analysis by 24/7 Wall St., concludes that its hospitals, nursing, and residential care facilities, which is true of only five states.
The study excluded real estate, the largest contributor to GDP, because housing is a universal need and fails to illuminate economic differences.
As in the other states with the same largest industry, Montana’s population is older than that of the U.S. as a whole. The typical state resident is 40 years old compared to the 38 years median national age. Additionally, 17.6% of the population is age 65 or older, well above the comparable 15.2% share of Americans nationwide.
Montana’s elderly population is growing rapidly, likely driving the industry’s growth. In the last five years, the number of retirement age state residents climbed by 21.8%. Over the same period, the state’s largest industry grew by 14.0%.
The industry contributed $2 billion to the state’s economy, or about 4.8 percent, a growth of 14 percent over the past five years. It employs 36,683 people with an average salary of $47,496.
Nationwide, the largest industry after real estate is ambulatory and outpatient health care services — accounting for 3.7% of GDP.
Each of the 50 U.S. states has a unique history, geography, demographic makeup, and political climate. These factors have considerable economic implications and lay the foundation of a state’s industrial composition.
The dominant industries in each state are as distinct as farming, computer manufacturing, oil extraction, and publishing.
The majority of states are similarly diversified—not overly reliant on a single industry, with the largest industry accounting for less than 6% of GDP. Still, there are seven states where the largest industry outside of real estate accounts for over 10% of GDP.
For many states, geography, topography, and the presence of natural resources largely explains their industrial makeup.
For example, Louisiana’s location along the Gulf Coast makes it a practical destination for international oil shipments. As a result, the state is home to 18 oil refineries that account for nearly a fifth of total U.S. refining capacity. Similarly, Wyoming has over a third of all recoverable U.S. coal reserves. It is no coincidence that mining is the state’s largest industry, accounting for 12.7% of its GDP. Meanwhile, farming is the largest industry in Idaho largely because its ideal soil conditions and climate. All told, in 11 states the largest industry is the direct result of the state’s natural resources and location.
Nuanced legal codes and tax incentives have also been instrumental in developing major industries in some states. In Georgia, for example, broadcasting is the dominant industry largely because of tax breaks lawmakers put in place over a decade ago. As a result, film and television production spending in the state climbed from $93 million in 2007 to $2.7 billion in fiscal 2018. Similarly, South Dakota became a banking hub shortly after state lawmakers eliminated regulatory caps on interest rates and fees for banks in an attempt to attract new business during the economic recession in the early 1980s.
Demographics and the overall age of a state’s population also can explain why a certain industry is dominant. Hospitals, nursing, and residential care facilities — including nursing homes — is the largest industry in five states: Maine, Massachusetts, Michigan, Missouri, and Montana. In each of those states, the typical resident is older than the typical American. Similarly, each of those states is home to a larger share of 65 and older residents than the 15.2% national share.
The largest industries in each state vary considerably in size. Vermont’s largest industry, outpatient medical services, generated $1.3 billion in 2016. Meanwhile, Texas’s oil and gas extraction sector generated $137.2 billion in 2016 — more than the entire GDP of Montana, Vermont, and Wyoming combined.