Vermont Economy: Tourism, Dairy, and Small Manufacturing

Vermont is the second-smallest state economy by GDP — the dollar value of everything a place makes and sells in a year. The Vermont economy is built on tourism, dairy, small-batch manufacturing, and healthcare, with a unique cluster of food and beverage companies whose brands are recognized far beyond state lines.

This is a plain-English tour. For the national picture, see The State of the U.S. Economy and the Economy hub.

How big is the Vermont economy?

For example, recent state GDP for Vermont has run around $40 billion, according to the Bureau of Economic Analysis. Population is roughly 0.65 million, per the U.S. Census Bureau. Burlington and the Champlain Valley anchor the largest regional economy, with Montpelier (the state capital), Rutland, and Brattleboro hosting smaller hubs.

The biggest industries

Vermont's industry mix is unusual for its size. The main pillars are:

• Tourism and recreation — ski resorts (Killington, Stowe, Sugarbush, Mount Snow), fall-foliage tourism, summer lake and mountain visitors, and a deep agritourism scene drive a large hospitality economy.
• Dairy and agriculture — Vermont is one of the most dairy-dependent state economies per capita, supplying milk to regional processors and cheese makers, plus maple syrup, apples, craft cider, and vegetables.
• Food and beverage manufacturing — Ben & Jerry's, Cabot Creamery, King Arthur Baking, Lake Champlain Chocolates, and a famously deep craft brewery scene anchor a small but high-value food cluster.
• Healthcare — the University of Vermont Medical Center in Burlington is the largest single employer in the state and serves much of northern New England.
• Higher education — UVM, Middlebury College, Norwich University, and a long list of smaller colleges are important employers and economic anchors.
• High-tech and advanced manufacturing — GlobalFoundries operates a major semiconductor fab in Essex Junction; specialty machinery and aerospace components are also part of the mix.

Jobs and wages

Vermont labor data is published by the Vermont Department of Labor, with national-level numbers from the Bureau of Labor Statistics. For example, the Vermont unemployment rate is consistently among the lowest in the country, often well below the national average, with the Burlington metro especially tight.

The Vermont minimum wage is indexed to inflation and adjusts each January. It sits well above the federal floor of $7.25. Many large employers in healthcare and tech pay above that on their own.

Taxes in Vermont

Vermont has a graduated state income tax with a relatively high top rate. Most retirement income is taxed, with limited exemptions for Social Security at lower incomes.

The state sales tax rate is 6%, with local options that can add 1% in some municipalities. Groceries, clothing, and prescription drugs are exempt. State tax forms and rules live at the Vermont Department of Taxes. You can read more about how sales tax works in our glossary.

Cost of living

Cost of living in Vermont runs above the national average, especially for housing, energy, and healthcare. Burlington and surrounding Chittenden County are the most expensive; rural counties remain more affordable but have seen housing prices rise sharply with remote work and second-home demand. The federal government tracks region-specific Consumer Price Index data through the BLS New England region, and HUD publishes Fair Market Rents for every county at HUD User.

Tourism, foliage, and the ski economy

Vermont's tourism economy runs on three main seasons: ski and snowboard winters, fall-foliage Octobers, and summer lake and mountain visitors. The ski industry — anchored by Killington, Stowe, Sugarbush, Okemo, and Mount Snow — supports a deep network of lodging, food and beverage, and retail businesses across the Green Mountains. Fall foliage draws visitors from around the world during a short, intense window each year.

Dairy and food

Vermont punches well above its weight in food and beverage. Cabot Creamery, owned by a multistate dairy cooperative, is one of the largest cheese producers in the U.S. Ben & Jerry's, founded in Burlington, remains a major ice cream brand. King Arthur Baking, headquartered in Norwich, is one of the largest U.S. flour brands. Vermont produces a large share of U.S. maple syrup each year, and the state's craft brewing scene — anchored by The Alchemist, Hill Farmstead, and Lawson's Finest Liquids — is regularly ranked among the best in the country.

GlobalFoundries and the tech base

The Essex Junction semiconductor fab, originally built by IBM and now owned by GlobalFoundries, is one of the largest single manufacturing facilities in northern New England. It is a major source of high-wage technical jobs and supports a deep base of suppliers and contractors around Burlington.

How does the Vermont economy fit into the national picture?

Vermont is one of the smallest, most rural state economies, with an unusual concentration of nationally recognized food brands and a tourism economy heavily tied to weather and travel cycles. Population is essentially flat, and the state has been working to attract and retain workers across most major industries.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and the Vermont Department of Taxes for the most current data.