Thursday, April 17, 2014
By Stephen Singer
The Associated Press
HARTFORD, Conn. – Federal spending cuts and reduced consumer demand are slowing economic growth in New England, according to a set of projections released Wednesday.
The report by the New England Economic Partnership, a nonprofit that provides analyses and forecasts, said economic growth of 3 percent through 2017 is less than what’s considered even moderate. Massachusetts, Vermont and New Hampshire 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 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.
“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,” said Ross Gittell, manager of the New England forecast.
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.
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.
The strongest annual average growth rate in New England – 1.8 percent in New Hampshire through 2017 – is still lower than the 1.9 percent average annual employment growth nationally. Maine’s growth rate is the lowest in New England, at 0.7 percent.
Housing is a bright spot as home prices and sales rise, boosting construction and related industries. But it comes with a warning: Even with a “significant turnaround” this year and rising prices in the region anticipated through 2017, housing prices in all the New England states except Vermont are expected to be below their peak levels.