Sales of existing single-family homes

The sale of existing single-family homes has increased over last year, driven by low interest rates, pent-up demand and improving economic conditions.
Source: Maine Real Estate Information Systems, Inc.

January 2, 2013

Bright spots in Maine's economy mask challenges ahead

The state is poorly positioned in growing industries and needs help from a strong national recovery.

By Jessica Hall
Staff Writer

(Continued from page 1)

click image to enlarge

Charles Colgan

Unemployment in Maine

Click on the image of the state below to open an interactive map with unemployment rates by Maine counties from 1990 to 2012.

SOURCE: Center for Workforce Research and Information

The U.S. has recovered almost two-thirds of the jobs lost during the recession, but Maine has recovered only 17 percent, Colgan said.

Sectors such as health care, education, professional and business services, and leisure and hospitality have showed gains, but state and local government jobs have dropped, economists said. Southern Maine is struggling from the closure of the Brunswick Naval Air Station in 2011 and the resulting ripple effect on local businesses as about 7,000 people left the area, according to the state Department of Labor.

Colgan expects Maine's economy will lag the U.S. employment recovery by more than a year because the state is not well-positioned in growing industries such as business and professional services or manufacturing.

For the third consecutive year, Maine ranked No. 50 in Forbes' seventh annual "Best States for Business." Forbes cited problems such as the state's high corporate tax burden -- the second-highest in the country -- as well as high energy costs and the oldest state population, with a median age of 42.

Colgan expects Maine to recover to its pre-recession employment level of 620,700 by the end of 2015.

Despite gains in some sectors, Maine's manufacturing industry stands in worse shape now than during the worst quarter of the recession. The woes in the sector will be compounded by the closing of Hostess Brands' bakery in Biddeford, Colgan said. Hostess directly employed 500 workers in Maine and could account for another 200 jobs indirectly.

Another big employer, fine stationery company William Arthur in Kennebunk, will leave in 2013. The company, which agreed in November to be acquired by Crane & Co., employs about 270 designers, artists, skilled craftspeople and customer service professionals. It is the second-largest employer in Kennebunk, behind Corning Inc.

For even the most Maine-centric economic indicators, there are more mixed measures.

The total amount of fish sold through the Portland Fish Exchange rose to more than 5.3 million pounds for 2012, up from 4.8 million pounds a year ago. Still, that's down from almost 8.1 million pounds in 2007.

For the lobster catch, 2012 could surpass the record total of more than 100 million pounds in 2011. The official totals will be released in February. Yet, even with the record catch there's a flip side: Wholesale prices in the peak of the summer fell to the lowest level in 30 years.

"There's no question we're in very unpredictable economic times," said John Hathaway, president of processor Shucks Maine Lobster. "But there's a real opportunity for us to gain market share with a bigger catch. Now is the time for us to be keeping jobs in Maine and stop shipping lobster to Canada, and for us to market Maine lobster more strongly around the U.S. and around the world."

Staff Writer Jessica Hall can be contacted at 791-6316 or at:


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