N.H. still setting economic pace
The strongest economy among the six New England states is expected once again to be New Hampshire’s, according to a University of New Hampshire economist.
Ross Gittell, James R. Carter Professor at the Whittemore School of Business and Economics, earlier this month presented his latest research on the New England economy at the New England Economic Partnership’s Fall 2005 Economic Outlook Conference. Gittell is the partnership’s forecast chair.
Gittell said New Hampshire is the only New England state expected to achieve overall economic and employment growth above the U.S. average over the forecast period.
The Granite State is forecast to average 3.5 percent gross state product growth per year, he said. Connecticut is expected to grow at an average annual rate of 3.2 percent, just below the U.S. average of 3.3 percent. Massachusetts’ economy is expected to grow 3 percent per year. Maine and Vermont are forecasted to have the slowest overall growth in the region, approximately 2.4 and 2.8 percent per year respectively, according to Gittell.
Total employment is forecast to grow at 1.5 percent per year in the Granite State. Rhode Island’s average annual total employment growth is expected to be just below the New Hampshire and national average, or 1.3 percent per year. Maine, Connecticut, Massachusetts and Vermont are expected to have the slowest growing employment at below 1 percent annually.
Overall, according to Gittell, New England will feel the economic impact of Hurricanes Katrina and Rita in the second half of 2005, but the region is expected to recover the dampened growth with stronger growth in early 2006.
Gittell said the region will experience resilient, yet slow growth in the coming months, with slightly lower growth at the end of 2005 and stronger growth in early 2006 than anticipated in his spring NEEP forecast.
“This is mainly a result of the impact of Hurricanes Katrina and Rita on the national and regional economies. The hurricanes have increased energy and overall prices and dampened growth in the nation and region in the second half of 2005. Much of dampening of growth from the hurricanes in the region is expected to be recovered, with stronger growth in early 2006 than previously anticipated,” said Gittell.
He said the overall regional economy is expected to grow 3.1 — below the national 3.3 percent average over the forecast period. Growth in the region’s economy is expected to peak in the second quarter of 2006 at 3.5 percent and then level off and remain at about 2.5 percent through the first half of 2007 before rising again above 3 percent.
Regional employment growth also is expected to be below the national average. Growth in total employment is expected to average 1.1 percent per year, compared to the national average of 1.4 percent over the forecast period. Regional employment is expected to return to its 7.083 million first-quarter of 2001 peak level in the second quarter of 2006.
In all the major North American Industrial Classification System (NAICS) super-sectors of the economy — with the exception of manufacturing — employment growth in the region is expected to be below the national average, said Gittell.
The gap in the United States compared to New England growth is expected to be greatest in financial activities and least pronounced in information industries. In manufacturing, the slight decline forecasted for New England is just below the expected average annual decline in the nation.
Professional and business services and leisure and hospitality are forecasted to be the fastest-growing NAICS super-sectors in the region, with average annual growth rates at twice the total employment average, or 2 percent annually. While growing faster than other sectors of the regional economy, professional and business employment in all the New England states is expected to grow below the U.S. average of 2.6 percent per year.