New England Economy Forecast to Be Slightly Stronger, Despite Growth Lag
By Lori Wright, Media Relations
June 6, 2007
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 with growth closer to the national average, according
to the latest New England Economic Outlook.
Ross Gittell, James R Carter Professor at UNH and the vice
president and forecast manager for the New England Economic
Partnership, presented his latest economic forecast for New
England Thursday, May 24 at the partnership’s spring
conference.
“Across the New England states, 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,” Gittell said.
New England 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 .9 percent a year in the
region, compared to the national average of 1.2 percent.
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 U.S., over the forecast period.
Connecticut and Massachusetts are expected to lead the region,
along with New Hampshire, 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 the other states in the region are expected to have overall
economic growth at least .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. 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 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. 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 (.5 percent annual
decline) and construction (.4 percent annual decline).
Gittell also provided information regarding the housing market,
which was the focus of this year’s conference, “From
Sublime to Subprime: The Outlook for Housing in New England.”
Regional housing prices are expected to decline through the
2nd quarter of 2008. The sharpest declines are expected to
be in the last three quarters of 2007, followed by more modest
decline, and then slow recovery. Housing prices are not expected
to return to their peak level in the region until the middle
of 2010.
“The housing price decline in the region is significant,
but the decline is not expected to be as pronounced as the
decline in the last housing recession in the late 1980s and
early 1990s,” Gittell said.
The most pronounced peak to trough declines in housing prices
in the region are expected in Massachusetts (-14 percent),
Rhode Island (-13 percent) and New Hampshire (-12 percent).
Connecticut is forecast to have a decline of 10 percent and
Maine 9 percent. Vermont is expected to have the least decline
in the region (-4 percent) and the only decline in the region
less than the national average.
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