CONCORD, N.H. – New England will continue to experience a slow economic recovery until well into 2013 due in part to weaknesses in the national and global economies, an economic forecaster said Thursday.

The forecast came a day before the New England Economic Partnership was scheduled to hold its fall conference in Manchester.

“Of significant concern looking forward is how the New England states will be affected by the European debt crisis. The European market has been an important trade partner and investor in New England, and a weak European economy will have economic implications for the region,” Ross Gittell, the partnership’s New England forecast manager, said in a written statement. Gittell said the region is not expected to return to pre-recession employment levels until the second quarter of 2015.

In addition, fiscal challenges at the state and federal level, and low consumer and investor confidence will affect the region, said Gittell, a University of New Hampshire economist.

He said regional employment is expected to remain at its current level and not grow at an annual rate above 1 percentage point until the middle of 2013. The regional jobless rate, Gittell said, is expected to rise slightly from 7.8 percent in the last quarter of 2011 to 8.2 percent in early 2013, then gradually decline to 6.7 percent by the end of the forecast period.

Gittell said there will be significant variations in economic performance among the states, with Vermont and New Hampshire expected to have the strongest job growth over the forecast period that runs to 2015. Vermont is the only state expected to have employment growth at a rate exceeding the national average, he said.

Maine and Connecticut are expected to have the lowest job growth, and Rhode Island, which has a 10.5 percent jobless rate, is expected to continue to have the highest unemployment in New England.

Maine economic forecaster Charles Colgan said his state is expected to continue to experience job losses through next year.

“Although the losses will be small, the trends take the Maine economy closer to the levels at the bottom of the recession rather than to recovery,” he said. Growth is expected to resume at a faster pace in 2014 and 2015, he said, but he did not foresee recovery to pre-recession levels within the forecast period.

Mark Zandi, chief economist with Moody’s Analytics, said the national outlook may be improving with growth appearing to have stabilized and the risk of recession receding. But Zandi said the rate of growth is not enough to reduce the high 9 percent national unemployment rate.

He also said recession remains a significant threat unless Congress comes up with a deal to make $1.2 trillion in deficit reductions over 10 years that do no harm.

 

Copy the Story Link