N.H., Mass. seen as region’s economic leaders
The New England economy is expected to experience slow growth, and uncertainty in the housing market could have a significant negative influence in the region, says economist Ross Gittell in his latest regional forecast.
But Gittell, a University of New Hampshire professor and vice president of the New England Economic Partnership, predicted that the New Hampshire and Massachusetts economies would be the strongest of the region’s six state economies.
“The outlook is for a slow-growing New England economy,” said Gittell, who presented his fall 2006 New England economic forecast at the partnership’s fall conference held yesterday in Boston. “Adding to a relatively bleak economic outlook is high downside risk in the forecast. This is most influenced by uncertainty in the housing market. A weaker and longer to recover housing market nationally and in the region (than in the forecast) would have a significant negative influence on the regional economy.”
According to Gittell, regional employment growth is expected to remain below the national average from 2005 to 2010. Overall economic activity also is expected to grow below the national average throughout the forecast period, he said.
“New England gross product growth is expected to average 2.3 percent per year over the forecast period. This compares to the forecasted national growth of 3.2 percent. Growth in the region’s total employment is expected to average .8 percent per year, compared to the forecasted national average of 1.3 percent,” according to Gittell.
With New Hampshire and Massachusetts expected to have the strongest regional economies, Maine is forecasted to have the weakest. Maine’s economy continues to suffer from the loss of manufacturing jobs and will be negatively impacted by the closure of the Brunswick Naval Air Station, Gittell said.
The Bay State is expected to lead the region in growth in gross state product, posting the highest average annual growth in gross state product at 2.8 percent. New Hampshire is expected to lead the region in total employment growth and be the only state to grow at a rate near the national average. New Hampshire also is forecasted to lead the region in employment growth in a majority of industry sectors.
“In several sectors, New Hampshire is the only state in the region expected to have employment growth above the national average. In the Granite State, employment is expected to grow at 1.2 percent per annum compared to the U.S. average of 1.3 percent per year,” Gittell said.
Finally, the region’s real per capita income is expected to grow well below the national average over the forecast period, 2.5 percent per year compared to the national average of 3.4 percent.
According to Gittell, New Hampshire is expected to have per capita income growth just below the U.S. average, at 3.2 percent. The other states in the region are expected to have annual real per capita income growth ranging from 2.7 percent in Connecticut to 2.2 percent in Rhode Island. – JEFF FEINGOLD/NEW HAMPSHIRE BUSINESS REVIEW