In this article, we will be taking a look at the 20 most powerful states in the US. If you want to skip our detailed analysis of the global defense industry, you can go directly to see the 5 Most Powerful States in the US.
The Global Defense Industry: Powers in Motion
The global defense industry is experiencing significant growth driven by ongoing geopolitical tensions. According to new data on global military spending published by the Stockholm International Peace Research Institute (SIPRI), total global military expenditure reached $2.443 trillion in 2023, marking a 6.8% increase in real terms from the previous year. This rise represents the steepest year-on-year increase since 2009, driven primarily by escalating tensions and conflicts around the world. The ten largest military spenders, including the US, China, and Russia, all raised their defense budgets.
Notably, Russia’s military spending surged by 24% to an estimated $109 billion in 2023, reflecting a 57% increase since 2014. In 2023, Ukraine’s military spending was 59% of Russia’s military spending. Ukraine also received at least $35 billion in military aid from various countries, including $25.4 billion from the US. When combined with Ukraine’s own spending, this amounts to around 91% of Russia’s military expenditure.
Military expenditure in the Middle East rose by 9% to reach $200 billion in 2023, marking the highest annual growth rate in the region over the past decade. This increase was largely driven by Israel, which saw its military spending grow by 24% to reach $27.5 billion, following its large-scale offensive in Gaza after the October attack by Hamas. Iran also ranked as the fourth largest military spender in the Middle East, with an expenditure of $10.3 billion in 2023. Diego Lopes da Silva, a senior researcher with the Stockholm International Peace Research Institute (SIPRI), noted that the surge in military spending reflects the rapidly changing dynamics in the region, from improving diplomatic relations to fears of a broader conflict.
The United States remains the world’s largest military spender. In 2023, the US raised its military budget by 2.3%, bringing total spending to $916 billion. Meanwhile, China, the second-largest military spender, allocated approximately $296 billion to its defense efforts, reflecting a 6% increase from the previous year.
READ ALSO: 30 Least Peaceful Countries in the World and 20 Countries with the Best Economy in the World in 2024.
Growing Budgets: A Win for Defense Contractors
The increase in military spending signals a growing demand for military equipment, new weapons systems, advanced technologies, and modernization efforts. This trend can lead to increased revenues and growth for companies in the defense sector, as governments seek to enhance their military capabilities in response to global security challenges.
Lockheed Martin Corporation (NYSE:LMT) is one of the largest companies in the defense and technologies industry. In April, the corporation was awarded a significant $17 billion contract by the US Missile Defense Agency (MDA) to develop the Next Generation Interceptor (NGI), which aims to enhance the country’s missile defense capabilities. As the prime contractor, Lockheed Martin Corporation (NYSE:LMT) will create a modern, reliable, and technically advanced interceptor designed to protect the US from long-range ballistic missile threats posed by rogue nations like North Korea and Iran. This contract is part of a modernization effort for the Ground-Based Midcourse Defense (GMD) system, which includes a network of radars and interceptors. The first NGI interceptor is expected to be operational by 2028, marking a crucial advancement in national security efforts.
LMT has shown impressive performance in 2024, driven by strong demand for its defense technology solutions and a backlog of nearly $160 billion, more than double its annual revenue. In the second quarter, the company reported a 9% year-over-year increase in sales, reaching over $18 billion. The company reported earnings per share (EPS) of $7.11, surpassing expectations by $0.66. As of October 3, Lockheed Martin Corporation (NYSE: LMT) has seen its stock price increase by 35% over the past 6 months.
The company has also demonstrated a commitment to shareholder value through consistent dividend increases and aggressive share buybacks. On October 2, Lockheed Martin (NYSE:LMT) announced a fourth-quarter dividend of $3.30 per share, marking a $0.15 increase from the previous quarter and the company’s 22nd consecutive year of dividend growth. Additionally, the board authorized an increase of up to $3 billion for its share repurchase program, bringing the total authorization for future buybacks to approximately $10 billion.
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With this background in mind, let’s explore the 20 most powerful states in the US.
Copyright: dolgachov / 123RF Stock Photo
Methodology
In this article, we have listed the 20 most powerful states in the US. We utilized two key metrics: population and Gross Domestic Product (GDP). Economic strength and population numbers are effective metrics for assessing a state’s overall power as they provide insights into economic capacity and human resources. While military strength is often considered when discussing state power, our focus on population and GDP allows for a broader understanding of how states can leverage their workforce potential and economic capabilities to assert influence. Population reflects the potential workforce and market size, while GDP indicates economic strength and resource availability, both of which are essential for assessing a state’s overall power.
We gathered data from the United States Census Bureau, which provided us with estimated populations of US states as of July 2023. Additionally, we consulted the US Bureau of Economic Analysis (BEA), which provided us with the GDP data for each state in 2023. We then ranked each state based on both population and real GDP. Subsequently, we calculated the average ranking of these two metrics and assigned a score to each state, which helped us identify the most powerful states in the US.
A lower Insider Monkey Score indicates a better overall ranking in terms of GDP and population. In the case where multiple states had the same score, we used GDP as a tie-breaker. The 20 most powerful states in the US are listed below in ascending order.
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20 Most Powerful States in the US
20. Missouri
Real Gross Domestic Product (2023): $344.11 Billion
Total Population (2023): 6,196,156
Insider Monkey Score: 19.5
Missouri, a landlocked state in the Midwestern region, is one of the 20 most powerful states in the US. According to recent estimates by the US Bureau of Economic Analysis, Missouri’s real GDP in 2023 was $344.11 billion. Manufacturing, healthcare, real estate, aerospace, and transportation are major sectors that contribute to the state’s GDP.
19. Indiana
Real Gross Domestic Product (2023): $401.47 Billion
Total Population (2023): 6,862,199
Insider Monkey Score: 18
Indiana is a state in the Midwestern region of the US. It is the 17th-most populated of the 50 states. Indiana has a diverse economy and the state’s real GDP in 2023 was $401.47 billion.
18. Maryland
Real Gross Domestic Product (2023): $420.99 Billion
Total Population (2023): 6,180,253
Insider Monkey Score: 18
Maryland is a small state in the Mid-Atlantic region. It is one of the most densely populated states in the US. Maryland boasts a highly diversified economy that includes key sectors such as manufacturing, retail services, real estate, information technology, defense contracting, healthcare, and biotechnology. It is one of the top US states by median household income. In 2023, Maryland’s real GDP was $420.99 billion.
17. Colorado
Real Gross Domestic Product (2023): $428.04 Billion
Total Population (2023): 5,877,610
Insider Monkey Score: 18
Colorado is one of the Mountain states in the Western United States. Key sectors that contribute to the state’s economy include government and defense, real estate, mining, and agriculture. As one of the most powerful states in the US, Colorado recorded a real GDP of $428.04 billion in 2023.
16. Arizona
Real Gross Domestic Product (2023): $414.27 Billion
Total Population (2023): 7,431,344
Insider Monkey Score: 16
Arizona, a state in the Southwestern region of the United States, is the 6th-largest by area and the 14th-most-populated of the 50 states. Some of the state’s largest sectors are real estate, healthcare, and manufacturing. In 2023, Arizona’s real GDP was $414.27 billion.
15. Tennessee
Real Gross Domestic Product (2023): $425.41 Billion
Total Population (2023): 7,126,489
Insider Monkey Score: 15.5
Tennessee is a landlocked state in the Southeastern region that ranks among the top 15 on our list of the most powerful states in the US. The state has a diverse economy comprising various sectors, including real estate, manufacturing, agriculture, healthcare, and finance. Tennessee recorded a real GDP of $425.41 billion in 2023.
14. Massachusetts
Real Gross Domestic Product (2023): $615.14 Billion
Total Population (2023): 7,001,399
Insider Monkey Score: 14
Massachusetts is a state in the New England region of the Northeastern US that ranks among the states with the best economy. With a real GDP of $615.14 billion in 2023, Massachusetts is one of the most powerful states in the US.
13. Virginia
Real Gross Domestic Product (2023): $590.8 Billion
Total Population (2023): 8,715,698
Insider Monkey Score: 12.5
Virginia is a state in the Southeastern and Mid-Atlantic regions of the US. Arms and aerospace, technology, and banking and finance are major sectors that contribute to the state’s GDP. The state of Virginia’s real GDP in 2023 was $590.8 billion. It ranks 13th on our list of the most powerful states in the US.
12. Michigan
Real Gross Domestic Product (2023): $547.77 Billion
Total Population (2023): 10,037,261
Insider Monkey Score: 12
Michigan is a state in the Great Lakes region that ranks 12th on our list of the most powerful states in the US. It is the 10th largest state by area. Michigan recorded a real GDP of $547.77 billion in 2023.
11. New Jersey
Real Gross Domestic Product (2023): $656.48 Billion
Total Population (2023): 9,290,841
Insider Monkey Score: 10.5
New Jersey, located in the Mid-Atlantic and Northeastern regions, is the most densely populated state in the US. The state’s economy is highly diversified, featuring key sectors such as biotechnology, healthcare, information technology, finance, and tourism. In 2023, New Jersey’s real GDP was $656.48 billion.
10. Washington
Real Gross Domestic Product (2023): $672.12 Billion
Total Population (2023): 7,812,880
Insider Monkey Score: 10.5
Washington state, in the Pacific Northwest region, ranks among the top 10 on our list of the most powerful states in the US. Washington state has a strong economy. Key economic sectors include government, real estate and rental leasing, information, and manufacturing, along with important contributions from fruit and vegetable production and hydroelectric power. In 2023, the state of Washington recorded a real GDP of $672.12 billion.
9. North Carolina
Real Gross Domestic Product (2023): $625.68 Billion
Total Population (2023): 10,835,491
Insider Monkey Score: 10
North Carolina, a state in the Southeastern region, is one of the most powerful states in the US. The state serves as a major banking and finance center, with other important sectors including agriculture, manufacturing, and technology. North Carolina’s real GDP in 2023 was $625.68 billion.
8. Georgia
Real Gross Domestic Product (2023): $661.11 Billion
Total Population (2023): 11,029,227
Insider Monkey Score: 8.5
Georgia, a state in the Southeastern region, ranks 8th on our list of the most powerful states in the US. Atlanta, the capital city of the state, is a global city and a major hub for finance, insurance, technology, manufacturing, real estate, services, logistics, and transportation. The Hartsfield–Jackson Atlanta International Airport is the world’s busiest airport. In 2023, the state of Georgia recorded a real GDP of $661.11 billion.
7. Ohio
Real Gross Domestic Product (2023): $698.21 Billion
Total Population (2023): 11,785,935
Insider Monkey Score: 7
Ohio is a state located in the Midwestern region of the US. The state’s key sectors include banking and insurance, research and development, bioscience, steel production, manufacturing, and traditional industries such as agriculture. As one of the most powerful states in the US, Ohio recorded a real GDP of $698.21 billion in 2023.
6. Pennsylvania
Real Gross Domestic Product (2023): $789.5 Billion
Total Population (2023): 12,961,683
Insider Monkey Score: 5.5
Pennsylvania, located in the Northeastern region of the United States, ranks 6th on our list of the most powerful states. The state is home to a thriving manufacturing sector, and it plays a crucial role in the state’s economy. Pennsylvania’s real GDP in 2023 was $789.5 billion. It is the fifth most populated state in the US.
5. Illinois
Real Gross Domestic Product (2023): $875.56 Billion
Total Population (2023): 12,549,689
Insider Monkey Score: 5.5
Illinois, a state in the Midwestern region, ranks among the top 5 on our list of the most powerful states in the US. Illinois has a highly diversified economy, with strengths in agribusiness and food processing, as well as advanced manufacturing, energy, life sciences and biotechnology, and business and professional services. In 2023, Illinois recorded a real GDP of $875.56 billion.
4. Florida
Real Gross Domestic Product (2023): $1.27 Trillion
Total Population (2023): 22,610,726
Insider Monkey Score: 3.5
Florida, a state in the Southeastern region, ranks high among the most powerful states in the US. Florida’s economy is supported by various sectors, including agriculture, tourism, construction, international banking, biomedical and life sciences, healthcare research, aerospace and defense, and commercial space travel. Florida’s real GDP in 2023 was $1.27 trillion. It is also one of the best states in the US to live in.
3. New York
Real Gross Domestic Product (2023): $1.77 Trillion
Total Population (2023): 19,571,216
Insider Monkey Score: 3.5
New York State is a Mid-Atlantic state in the Northeastern US. It ranks among the top 3 on our list of the 20 most powerful states in the US. The state has a significant manufacturing sector and is a leading center for banking, finance, and communication in the United States. In 2023, New York State recorded a real GDP of $1.77 trillion.
2. Texas
Real Gross Domestic Product (2023): $2.03 Trillion
Total Population (2023): 30,503,301
Insider Monkey Score: 2
Texas, in the South Central region of the United States, is the second-largest state by both area and population. Key sectors contributing to the state’s economy include manufacturing, aerospace, aviation and defense, biotechnology and life sciences, energy, information technology, petroleum refining, and chemical products. With a real GDP of $2.03 trillion in 2023, Texas ranks second on our list of the most powerful states in the US.
1. California
Real Gross Domestic Product (2023): $3.23 Trillion
Total Population (2023): 38,965,193
Insider Monkey Score: 1
California, located in the Western United States, tops our list of the most powerful states in the US. It is the most populated state in the US. California’s economy is diverse, featuring significant sectors such as finance, business services, and manufacturing. Additionally, California’s Silicon Valley is home to some of the world’s biggest technology companies. California ranks as the most powerful state in the US due to its combination of population size and wealth, boasting a real GDP of $3.23 trillion in 2023. If it were a separate country, California would be among the five largest economies globally, thanks to its enormous GDP.
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Disclosure: None. This article was originally published on Insider Monkey.
