Published
August 10, 2026 8:48 am
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By
Jenna Ross
Design
- Zack Aboulazm
The following content is sponsored by Terzo
Productivity by State: Where Work Is Becoming More Productive
Productivity is one of the biggest drivers of long-term economic growth and rising living standards. But where in America is work becoming more productive?
This graphic, created in partnership with Terzo, maps labor productivity growth across U.S. states. It’s part of our Markets in a Minute series, which delivers quick economic insights.
Ranking Labor Productivity Changes
D.C. and Arizona led in productivity growth, which measures the change in the amount of goods and services produced per hour worked.
Both areas saw output increase while hours worked decreased. In other words, workers were producing more in less time.
| State or District | Labor Productivity Change, 2024-2025 |
|---|---|
| District of Columbia | 5.2% |
| Arizona | 4.4% |
| California | 4.2% |
| Massachusetts | 3.7% |
| Oregon | 3.7% |
| New Hampshire | 3.6% |
| Minnesota | 3.5% |
| Vermont | 3.4% |
| Colorado | 3.2% |
| Louisiana | 3.1% |
| Connecticut | 3.0% |
| Delaware | 3.0% |
| Montana | 3.0% |
| South Carolina | 3.0% |
| Kentucky | 2.8% |
| South Dakota | 2.7% |
| Tennessee | 2.7% |
| New York | 2.5% |
| Iowa | 2.4% |
| Hawaii | 2.3% |
| Arkansas | 1.8% |
| Ohio | 1.8% |
| Virginia | 1.8% |
| North Carolina | 1.7% |
| Utah | 1.6% |
| Alabama | 1.5% |
| Wisconsin | 1.5% |
| Maryland | 1.3% |
| Florida | 1.1% |
| Indiana | 1.1% |
| New Mexico | 1.1% |
| Rhode Island | 1.1% |
| Illinois | 0.9% |
| Maine | 0.9% |
| Missouri | 0.9% |
| Washington | 0.8% |
| Michigan | 0.6% |
| Texas | 0.6% |
| Georgia | 0.4% |
| New Jersey | 0.4% |
| North Dakota | 0.4% |
| Kansas | 0.1% |
| Pennsylvania | 0.1% |
| Nebraska | -0.3% |
| Nevada | -0.3% |
| Oklahoma | -0.4% |
| West Virginia | -0.4% |
| Wyoming | -0.7% |
| Mississippi | -1.3% |
| Alaska | -2.3% |
| Idaho | -2.5% |
| U.S. | 1.8% |
Source: U.S. Bureau of Labor Statistics. Data is for the private nonfarm sector, which excludes government, farms, and non-profit organizations.
California came in third place at 4.2%. Because of the state’s economic size, California contributed nearly one-third of the labor productivity growth the U.S. saw nationally in 2025.
States With the Biggest Drops
While all states saw an increase in output, the hours worked climbed faster in some areas.
Eight states became less productive, with Alaska and Idaho seeing the biggest drops. In particular, Alaska saw the highest output growth of 3.8%, but also the largest gain in hours worked of 6.2%.
Why Productivity Matters
The differences across states highlight an important principle: economies and businesses become more productive when they can create more value without a proportional increase in labor. Businesses with strong productivity growth are often better positioned to expand margins, invest in innovation, and remain competitive.
While technology plays a major role, productivity gains also come from removing inefficiencies that slow teams down. Streamlining workflows, automating repetitive tasks, and giving employees better access to information can free up time for work that drives greater business value.
That’s where platforms like Terzo come in. By using AI to uncover contract insights, identify savings opportunities, and automate time-consuming contract workflows, Terzo helps organizations spend less time searching for information and more time making strategic decisions.
See how you can unlock over 10% in cost savings with Terzo.
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