New England is doing better than you might think
Despite the second snowstorm in April, spring is here. We have seen a definite up tick in brokerage activity — and we hope it will last!
A recent Jeff Thredgold e-newsletter itemized good economic data:
The stock market has stabilized and bounced back after the China stock market’s reaction in mid-February. Tens of thousands of stock market traders and investors looked at the housing activity issue, examined the subprime lender issue and studied dozens of other economic facts, and their consensus is a Dow average now north of 12,500 again, suggesting U.S. economic growth will continue.
There are 152 million people working in the United States. The unemployment rate dropped from 4.5 percent to 4.4 percent in March. That means 141,000 more people were working. Much of the gain was from small businesses. The construction sector had a net gain of 56,000 jobs in March. The good news is that those laid off from residential construction got work in commercial construction.
Education and health care added 54,000 jobs in March — the health-care sector represented one in six net new jobs over the past six months. Average hourly wages rose 6 cents (0.3 percent) to $17.27 an hour. The 4 percent rise over the past 12 months is slightly greater than the measured inflation, at 3.8 percent.
But in New Hampshire we still face challenges of high energy and transportation costs. Global competition is intense. High housing costs are part of the reason our young people are moving south. Those employment gains in education and health care result in double-digit increases in costs.
Plan for the 21st century
The other night I was reading an article that included this passage: “The reality of enhanced global competition and unaffordable government-sponsored social programs raise anxieties, including a substantial outsourcing of jobs, unemployment, a lackluster educational system, an aging society, along with new global competitors, especially in China, India and numerous Eastern European countries.”
The topic was “Old Europe,” in particular France, Germany, Italy and Spain. But I couldn’t help thinking that the same might be said about the United States. While we are still the world’s largest economy, government spending has escalated out of control. In 14 years will there be any Social Security for me to collect at age 70? Will it be the $2,900 per month that the annual form suggests?
Speaking of government spending, the New Hampshire House just passed a $10.4 billion biannual budget. The angst is not as much the absolute dollar amount, so much as the rate of increase. The state still brags of being the (pick a number: first, second, third) lowest tax state, but are we shortly going to fall out of the top 10, even 20? Time will tell.
In the past three months I have been working on projects in the North Country, Claremont and Rochester. The disparity of wealth and opportunity among those communities as compared to Portsmouth, Amherst, Nashua and Windham is huge. All states have wealthy and poor communities, but our strong reliance on property taxes as a means of support for local government and services as well as school funding highlights the fragile nature of our fiscal funding model.
Don’t get me wrong, I am not a broad-based tax supporter, but I struggle to see how we are going to keep the New Hampshire advantage alive and well. I feel we are not aggressively promoting core elements of our economic competitiveness and past successes encouraging entrepreneurs and small-business development, working to keep health-care and educational costs competitive, constantly protecting and enhancing our quality of life, not to mention spreading economic vitality to all of our regions and communities.
There is so much to do with dwindling resources to support it. We need to develop a statewide vision plan so we know where we are going and how we will get there. Without a vision and a plan we can end up like Old Europe — aged, grumpy, with too few workers to compete in the second half of the 21st century.
As soon as our legislators in Concord finish the budget, I hope the governor will convene stakeholders to work on a legacy plan for New Hampshire during the second half of the 21st Century.
Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE), a Fellow of the Royal Institution of Chartered Surveyors (FRICS) and a member of the board of The Initiative for a 2020 Vision for Concord. He can be reached at firstname.lastname@example.org.