Forecast Shows Slow Growth for CT
The Connecticut economy is projected to continue its recovery, reaching a pre-recession “normal” by 2017, but the state’s economy may continue to lag behind the levels of growth seen in other states and the nation, according to the New England Economic Partnership’s semi-annual economic forecast.
The report, which was released by NEEP — a non-profit conglomerate of regional economists — on Wednesday, said Connecticut had regained 40.1 percent of the 121,000 jobs it lost during the recession as of February, but the national rate of recovery was around 66 percent.
According to the report, the unemployment rate in Connecticut is 8 percent, compared to 7.7 percent nationally, but the economists projected that it will take four years to reach a pre-recession level 5.7 percent.
Significant gains were made in trade, professional service, education, hospitality, and health jobs. The hospitality sector alone added 4,300 jobs since February last year. But the construction, manufacturing, and financial service industries saw net losses, particularly the manufacturing sector, which lost 2,600.
NEEP will present the report at their Spring Economic Outlook Conference today in Boston.
NEEP’s report indicated that Massachusetts and Vermont are seeing the strongest overall economic recovery, while Rhode Island and Vermont are continuing to lag behind. NEEP economists suggested economic conditions continue to be affected by federal sequestration and a poor economic state in Europe.
NEEP uses economic models prepared by Economy.com to prepare its economic forecasts and produces the reports twice yearly. The Spring Economic Outlook Conference will be hosted by the New England Council and held at the Federal Reserve Bank in Boston today from 9 a.m to 2 p.m.
At the state Capitol Wednesday, Connecticut Business and Industry Association Executive Vice President of Policy Joseph Brennan said despite the loss of manufacturing jobs in Connecticut the industry has elicited renewed national focus in recent years.
“When you have a service-based economy, you’re not really generating anything new. It’s just money trading hands” Brennan said. “Manufacturers sell outside the state and overseas. That’s how you grow.” He added that manufacturing jobs also carry a “multiplier effect,” meaning each manufacturing job can generate four more jobs in support services.
Steven Lanza, the executive editor of The Connecticut Economy and an economics professor at the University of Connecticut, said that even after decades of declines in job rates for the state’s manufacturing industry, the sector may prove to be the state’s most dynamic and promising. Lanza developed a system of comparing Connecticut’s manufacturing industry with other states nationwide, and found it to be among the most promising.
“Connecticut owes its high [rank] to impressive scores in employee compensation and a concentration in technological sophistication,” Lanza told UConn Today. “These attributes offer promise that the manufacturing industry will continue to be a cornerstone of the state’s economy in the 21st century.”
However, Brennan said Connecticut still has a tough environment for growing these types of jobs because of its high energy and labor costs, but Connecticut is at the forefront of developing a type of manufacturing technology known as additive manufacturing or 3D printing. Brennan added that manufacturers in the state have been working to attract younger workers of the workforce.
“Connecticut manufacturers are working hard to raise awareness,” Brennan said. “Connecticut is highly-trained and has a high-quality workforce. Some people don’t think of manufacturing as a career option.”
But Brennan added that the modern manufacturing industry looks significantly different from the one the U.S. began exporting 40 years ago. He said facilities are “quieter, cleaner, and computer driven” and make use of robotics.