Economic growth expected to slow in New England
Staff, wire reports | November 17,2013
Federal spending cuts and reduced consumer demand are slowing economic growth in New England, according to new projections, but Vermont’s outlook is among the best in the region.
The report by the New England Economic Partnership, a nonprofit group that provides analyses and forecasts, said economic growth of 3 percent through 2017 is less than what’s considered even moderate.
Mathew Barewicz, economic and labor market information chief for the Vermont Department of Labor, argued that other states would be expected to have higher growth rates coming out of the recession because they have more to recover than Vermont does.
Vermont, New Hampshire and Massachusetts are expected to continue to boast the strongest economies in the region in the next four years.
In addition, employment growth of 2 percent in the six New England states will be below the national average. Massachusetts has recovered jobs lost in the 18-month recession from December 2007 to June 2009 and Vermont will soon follow.
Barewicz pointed out that Vermont was currently tied for the fifth-lowest unemployment rate in the country.
“Vermont was definitely hit during this last recession but we were not hit as hard as a number of other states and we have weathered the storm fairly well,” he said.
Ross Gittell, manager of the New England forecast, said the greater Boston area has been a bright spot in the New England economy, leading the region in job growth and more than recovering the jobs lost in the recession.
The strong Boston economy also has propelled Massachusetts to lead New England states in economic performance, he said. About one-third of the state’s jobs recovery can be attributed to employment gains in the Boston metropolitan area.
Barewicz said Burlington, which could be considered Vermont’s equivalent of Boston, was also doing well.
“Boston has certainly experienced a lot of job growth ... as has Burlington in the labor market area,” he said. “When you look at the Burlington labor market area, that area is well beyond where it was in 2007. It’s 2 to 3 percent above where it was.”
While Barewicz said Vermont has still not recovered all the jobs lost since 2007, the state is less than 1 percent away from that recovery goal.
Vermont’s diversified economy, which includes manufacturing, private and public education, health care and leisure and hospitality, keeps it from experiencing the extreme up and down swings seen in other states, he said.
With slow employment growth elsewhere in the region, the unemployment rate in New England is expected to decline gradually, from 6.7 percent in this year’s third quarter to 6.4 percent in late 2014 and to below 6 percent in the first quarter of 2016.
Unemployment in 2017 is expected to be lowest in Vermont (3.7 percent) and New Hampshire (3.3 percent). Joblessness is expected to be 6.1 percent in Rhode Island and 6 percent in Maine. Connecticut is expected to have the region’s highest unemployment rate, 6.5 percent, by 2017.
The region’s unemployment rate in mid-2017 is expected to be 5.4 percent. That’s a significant decline from the peak of 8.7 percent in 2010, but still above the pre-recession rate of 5 percent in the second quarter of 2008.
Herald reporter Patrick McArdle contributed to this story.