A victory lap and a forecast for another good year

In my last column, I shared some anecdotes that help tell the story of the New Hampshire economy, but I would not make any important decisions based on the laments of my Lyft driver or rumors about remote working from skiers on the gondola at Loon.

For data-crunching, we have people like Brian Gottlob, director of the state Economic and Labor Market Information Bureau.

Gottlob offered his outlook for 2024 at a recent virtual forum presented by the Greater Manchester Chamber.

“I call this a part of my victory tour,” Gottlob said during his Feb. 15 talk. “At this time last year, most economists were suggesting the U.S. economy would be in recession.”

Not Gottlob. More importantly for his Queen City audience, Gottlob also correctly predicted Manchester would experience faster job growth than both New Hampshire and the rest of the country. While Gottlob expects conditions to slow in the year ahead, he predicts Manchester’s job growth will hit 1.5%, faster than New Hampshire’s 0.9% and the nation’s 1%.

Not exactly boom times, but growth is still growth. So why are people still bummed about the economy?

“One of the things that I think astounds me and continues to astound me is how confidence has remained unrealistically soft,” Gottlob said. “Although in the last month or two we have seen consumer sentiment looking a little bit better.”

“And more importantly, consumers have been spending, regardless of how they say they feel about the economy,” he said. “There’s not an indication that they have significantly cut back on spending.”

The growth of the job market continues to be one of the nation’s and the state’s biggest challenges, Gottlob said. While it remains strong, it has yet to return to pre-pandemic levels.

“That’s the biggest problem I think that we’re facing right now in terms of limiting our job growth in the state and in the region,” he said.

But the state did not suffer large job losses last year, and he expects that trend to continue in 2024.

“Without large job losses, you don’t see a big decline in income. And if you don’t have a big decline in income, consumer spending remains resilient. And in that scenario, it’s almost impossible to have a recession nationally,” he said.

While tech giants like Amazon, Facebook, Google and Meta have laid off thousands of workers nationally, they represent a “very small portion” of overall employment, Gottlob said.

And those laid-off workers won’t be out idle for long.

“While this will sound very, very insensitive when I think about those people and their layoffs, do you know how long they’ll be without a job? For as long as they want to be,” Gottlob said. “Their skills are in demand. They will easily and quickly be rehired by other organizations.”

While some businesses may be reluctant to hire additional workers, Gottlob is not overly concerned about layoffs.

“Businesses are reluctant to lay people off, because they know how difficult it will be to hire back if the economic conditions or economic outlook improves,” he said.

Want younger workers? Build more apartments.

Manchester’s challenge in the years ahead, much like the rest of the state, is to build enough housing to attract all those young workers it would love to attract to work in the city’s growing biotech efforts in the Millyard.

Gottlob used his hometown of Dover to illustrate how Manchester needs to add more multi-unit developments to its housing stock.

“I just picked Dover because I know it so well, and because it is kind of an extreme. I looked at housing units authorized by building permits in buildings with at least five units per 1,000 residents,” Gottlob said.

Between 2010 and 2022, Dover authorized 17.1 units per 1,000 residents, compared to 9.2 statewide and 7.2% in Manchester, according to Gottlob’s data.

The added rental housing in Dover has helped to attract more young people to the city, he said.

“I think it really speaks to one of the key issues in Manchester and that’s attracting young people,” he said, “particularly when you see all of the exciting things that are happening in the economy of Manchester and all the dynamic employment opportunities in the Millyard, which tend to be in industries that have a younger demographic.”

That means more projects similar to the new apartment buildings recently completed or under construction around the Market Basket center on Elm Street.

“Adding two- to four-unit buildings doesn’t really go very far in addressing the shortage,” Gottlob said.

Mike Cote is editor of NH Business Review and New Hampshire Magazine. Contact him at mikecote@yankeepub.com.