A milder-than-usual winter helped propel Maine’s economy in the first three months of the year, pushing the state into the nation’s top 10 in economic performance for the quarter.

The Bureau of Economic Analysis said Wednesday that construction; health care and social assistance; durable goods manufacturing; and retail trade all expanded briskly in Maine during the quarter, contributing to the 9th-fastest growing economy in the country. The state’s economy produced $58.1 billion in goods and services in the quarter, up 2.3 percent from $57.6 billion in the final three months of 2015 and $55 billion during the first quarter of last year.

The results were a sharp reversal of the state’s economic performance of a year ago, when the tail end of a brutal winter resulted in the state’s economy contracting 11.3 percent, worst in the country.

Amanda Rector, the state economist, said the milder winter helped the economy in two ways: by allowing construction work to continue during a time of year when it is often shut down and low oil prices, which helped residents save money on heating costs and boosted disposable income.

“It really did help with both construction growth and sales growth,” Rector said.

Rector said the signs are good for the first quarter growth to continue, with construction still strong and continued low oil prices carrying into the summer.


That could lead homeowners to use some of the savings from lower heating costs to undertake renovations, she said, and business owners to invest.

The mild winter allowed many construction companies to start projects earlier than is typical, said Matt Marks, chief executive officer of Associated General Contractors of Maine, a construction trade association.

Marks said construction employment jumped early in the year, but he’s worried that the early start might have a downside: many contractors in the state said their backlog of work is starting to shrink. It used to be about a year, he said, but contractors said it is now down to a few months. The worry is that the backlog could be erased this fall, meaning lean times for contractors this coming winter.

“We’re just starting to hear people say that,” he said.

That’s reflected in employment figures, said Ken Simonson, the chief economist for Associated General Contractors of America.

He said 27,800 people in Maine were working for contractors in January, the highest number in years, but by June, that number had declined to 24,600. Those numbers are adjusted for seasonal variations in hiring, he said.



“I’m worried that the growth in Maine (in construction during the first quarter) may not have staying power,” Simonson said.

He also said Maine contractors have reported difficulty in hiring skilled construction workers, a problem probably exacerbated by the state’s slow population growth and very low unemployment rates. That means contractors may not be able to bid on some construction projects, losing out to out-of-state companies, or they may complete the projects late, Simonson said, hurting profits. Many construction contracts have financial penalties if the work isn’t done on time.

Marks said construction in southern Maine has been humming along, but less so elsewhere. Contractors in rural and northern areas are worried, he said. Simonson said employment figures for contractors support that concern – job growth has been stronger in urban areas of Maine than in rural locations.

Nationally, the BEA said Arkansas posted the biggest percentage increase in economic performance during the quarter, with its economy expanding by 3.9 percent, largely because of a strong rise in agricultural output. The sharpest contraction occurred in North Dakota, where falling oil prices and a decline in transportation and warehousing led to economic output dropping 11.4 percent.

The BEA said construction grew sharply during the first quarter nationally, rising 9.0 percent. In Maine, it contributed 0.53 percentage points, or roughly 23 percent, of the overall growth.

The worst-performing sector nationally was transportation and warehousing, which declined 8.8 percent in the quarter and detracted from overall economic growth in every state, including Maine.

Maine’s results largely mirrored the national economy; construction; health care and social assistance; and retail trade led the way to a 1.2 percent increase in economic growth in the U.S. as a whole.

Regionally, New England posted an increase of 1.5 percent in economic growth, behind the Far West and tied with the Southeast. New Hampshire’s economic growth of 2.9 percent was best in the region and fifth-best nationally. Connecticut posted the slowest growth rate in the region, with its economy expanding just 0.9 percent, a performance that was 28th among the states.

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