N.H. remains region’s economic pacesetter
As it has for much of the last decade, New Hampshire is expected to set the economic pace among New England states over the next several years.
According to the latest forecast put together by Ross Gittell, a professor at the University of New Hampshire and the New England Economic Partnership’s vice president and forecast manager, growth in gross regional product, total employment and income in New England is expected to be below the national average through 2011, but the regional economy is forecast to be slightly stronger than it has been in recent years, with growth closer to the national average.
Among the six New England states, he said, New Hampshire — with overall growth at the national average and employment growth slightly above the national average — and Connecticut — with growth in real income per capita above the national average — “are the only exceptions to growth across the region below the U.S. average.”
New Hampshire is expected to have the strongest economy in New England, with overall economic growth at the national average of 2.9 percent a year and average employment growth slightly above the U.S. average, 1.3 percent annually compared to 1.2 percent average for the nation, over the forecast period – 2006 to 2011.
New Hampshire is also forecast to lead the region in total employment growth. It is the only state in the region expected to grow at a rate above the national average.
The housing market is another story, Gittell said.
He predicted that the region’s housing prices will keep on declining through the second quarter of 2008, with the sharpest declines expected in the last three quarters of 2007, followed by a more modest decline, and then a slow recovery.
New Hampshire will suffer among the most pronounced declines in housing prices in the region, with a drop of 12 percent predicted through the second quarter of ’08. Only Massachusetts (14 percent) and Rhode Island (13 percent) are expected to see bigger decreases.
Connecticut is forecast to have a decline of 10 percent and Maine 9 percent. Vermont is expected to have the smallest decline in the region (4 percent) and the only decline in the region that is lower than the national average.
Housing prices are not expected to return to their peak level in the region until the middle of 2010, Gittell predicted, although it “is not expected to be as pronounced as the decline in the last housing recession in the late 1980s and early 1990s.”
Region below average
As for the New England economy as a whole, the region’s real gross product growth is expected to average 2.6 percent a year from 2006 to 2011. This compares to the forecasted national growth of 2.9 percent. Growth in total employment is expected to average 0.9 percent a year in the region, compared to the national average of 1.2 percent.
Along with New Hampshire, Connecticut and Massachusetts are expected to lead the region in growth in gross state product. Connecticut and Massachusetts are expected to have average annual growth in gross state product of 2.8 and 2.6 percent, respectively.
All of the other states in the region are expected to see overall economic growth at least 0.5 percent below the U.S. annual average, ranging from Vermont at 2.5 percent growth per year to Rhode Island at 1.9 percent.
The region’s real per capita income is expected to grow below the national average over the forecast period, 2.3 percent a year compared to the national average of 2.5 percent, according to Gittell’s forecast. Connecticut is expected to be the only state in the region with per capita income growth above the U.S. average at 2.8 percent.
Health and education services is expected to be the fastest-growing sector of the regional economy at 2.1 percent a year over the forecast period. Professional and business services, and leisure and hospitality, are both expected to grow at 1.7 percent average annual rates. The weakest regional employment sectors are expected to be manufacturing (0.5 percent annual decline) and construction (0.4 percent annual decline).