April may be the cruelest month, but in Maine, January is the bleakest month – at least economically. It ushers in the seasonality that is and has been a major structural part of our economy seemingly forever.

In 2014 – the latest year for which we have four full quarters of data – total covered employment in the first (January-March) quarter was just over 565,000. In the second (April-June) quarter, employment rose to just over 593,000. In the third (July-September) quarter, it jumped to nearly 608,000 before dropping back to just under 597,000 in the fourth (October-December) quarter.

The third-quarter peak stood 8 percent higher than the first-quarter trough. Considering only private employers (government employment tends to have less seasonal variation), third-quarter employment was 11 percent higher than first-quarter employment.

Considering consumer spending, at least on items taxable under the current sales tax system, the variation is even greater. Total retail sales in the third quarter of 2014 amounted to just over $5.6 billion: 55 percent higher than the first quarter total of just over $3.6 billion.

Most but not all of this difference is accounted for by visitors. Restaurant and lodging sales jumped from $500 million to nearly $1.3 billion – a difference of 154 percent. Even sales of taxable grocery staples (a category where purchases by visitors might be expected to be less dominant) were 36 percent higher in the third quarter than in the first.

OK, big deal. This is hardly news.

Yes, but for as long as I have been studying the Maine economy, virtually every business owner and policymaker I have encountered, both state and local, has set as a goal the reduction of seasonality. In particular, they have sought to bolster the so-called “shoulder seasons,” i.e., the second and fourth quarters of spring and fall.

Over the past seven years, since the business cycle peak before the Great Recession, business owners and policymakers have been only marginally successful in achieving this goal. In 2014, total private employment in the second quarter was virtually identical to annual average employment for the whole year, and fourth-quarter employment was about 2,700 higher than the annual average.

In 2007, second-quarter employment was about 1,500 less that the annual average, and fourth-quarter employment was about 3,300 more than the annual average.

In short, what little gain was achieved in the spring “shoulder” was lost in the fourth (holiday) quarter. Overall, the only really notable change was the smaller share accounted for by the first (winter) quarter.

The same general pattern held true for retail sales. Second- and fourth-quarter shares of total sales remained relatively stable, while the third-quarter share rose and the first quarter share declined. Perhaps most interestingly, the relative quarterly shares of restaurant and lodgings sales remained virtually unchanged over the seven-year period.

This indicates that what little progress has been made in increasing economic activity in the “shoulder” seasons cannot in any obvious way be attributed to the tourist industry or visitors, be they from outside the state or travelers within the state.

All of which simply underlines the apparently unchangeable (I can hardly use the term “inescapable” here) economic reality of our winter season – not only do we have a significant drop-off in the number of people coming here, but we apparently have a significant increase in the number of people leaving here, or at least huddling inside and not spending and hiring.

Charles Lawton is chief economist for Planning Decisions, Inc. He can be contacted at:

clawton@planningdecisions.com

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