California's economy has surpassed that of the United Kingdom to become the world's fifth largest, according to new federal data made public Friday, the AP reports. California's gross domestic product rose by $127 billion from 2016 to 2017, surpassing $2.7 trillion, the data says. Meanwhile, the UK's economic output slightly shrunk over that time when measured in US dollars, due in part to exchange rate fluctuations. The data demonstrate the sheer immensity of California's economy, home to nearly 40 million people, a thriving technology sector in Silicon Valley, the world's entertainment capital in Hollywood, and the nation's salad bowl in the Central Valley agricultural heartland. It also reflects a substantial turnaround since the Great Recession.
"We have the entrepreneurial spirit in the state, and that attracts a lot of talent and money," says Sung Won Sohn, an economics professor at 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." All economic sectors except agriculture contributed to California's higher GDP, says Irena Asmundson, chief economist at the California Department of Finance. Financial services and real estate led the pack at $26 billion in growth, followed by the information sector, which includes many technology companies, at $20 billion. Manufacturing was up $10 billion. California last had the world's fifth largest economy in 2002 but fell as low as 10th in 2012 following the Great Recession.