New England Economy Entering Cool-Down Period
By Lori Wright, Media Relations
November 14, 2007
The New England economy is expected to experience slow growth over the next
six months as the region struggles with the broadening effects of the housing
credit crisis and rising energy prices, according to Ross Gittell, James R.
Carter Professor at UNH.
Gittell, who serves as a forecast manager for the New England Economic Partnership,
released his Fall 2007 New England Economic Outlook Tuesday, Nov. 13, at the
partnership’s semi-annual conference in Boston.
According to Gittell, regional growth will remain low and below the national
average through the remainder of the decade, a trend that began in 2001. New
England real gross product growth will average just 2.2 percent a year from
2006 to 2011, which is down from the spring forecast of 2.6 percent and below
the national average of 2.6 percent over the time period.
The weakest times for the regional economy are expected to be the next couple
of quarters – the last quarter of 2007 and the first quarter of 2008
-- with growth in gross regional product of 1.6 and 1.7 percent, respectively.
The regional economy then will experience a slow and modest recovery, with
a peak of 3.4 percent in the first quarter of 2009.
“The fall 2007 national and regional slow growth forecasts and the lowered
NEEP forecast from the spring are indicative of the broadening effects of the
national credit crisis and the economic vulnerabilities extending from the
housing market to other sectors of the economy. In the region, housing price
decline is expected to continue through the second half of 2008 and then have
a slow recovery,” Gittell said.
New Hampshire is forecast to lead the region in total employment growth at
1.7 percent annually, and will be the only New England state to grow at a rate
above the national average. Maine is expected to have the lowest growth in
employment at .5 percent a year. Connecticut will continue to lead the region
with per capita income growth at 3 percent.
“New England has been experiencing slow growth in population and employment.
The region has been growing at a rate below the U.S. average and significantly
below the growth rates of fast growing regions of the nation, including the
mountain states. Of noteworthy concern for region’s economic future are
indications that New England is experiencing decline in ‘attractiveness’ to
young adults and businesses expanding employment,” Gittell said.
Regional housing prices are expected to decline through the second quarter
of 2008, with the sharpest decline in the last quarter of 2007. A slow and
modest recovery will follow.
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