The overall economic growth of New England in 2016 mirrored that of the U.S., according to a presentation by the New England Economic Partnership (NEEP) at its annual Economic Outlook Conference, held yesterday at the Federal Reserve Bank of Boston.
NEEP’s team of economists predicts 2017 and 2018 to remain strong, followed by a likely decline as the decade comes to a close.
The final years of the decade will be marked by uncertainty on the national level due to an unorthodox incoming administration, NEEP Vice President Ross Gittell noted. He expressed optimism for potential benefits in the way of infrastructure investments and tax reforms, as well as defense spending. However, concerns remain for potential cost increases for states if healthcare funding from the government dries up.
The economic strength of the region is most evident in top performers New Hampshire and Massachusetts, which boast the first and third lowest unemployment rates in the nation, respectively, according to NEEP data.
The gross regional product of New England peaked in 2015 at 2.8 percent and declined to 1.6 percent in 2016. The forecast shows that measure jumping back up to 2.7 throughout 2017 and 2018.
Connecticut’s economy is showing mixed signals in its recent survey results, said Patrick J. Flaherty, assistant director of research at the Connecticut Department of Labor.
“We have a real puzzle going on in Connecticut right now where our two major indicators of employment are going in opposite directions,” Flaherty said. “We’re a little concerned about the decline we’ve seen in payroll employment over the last few months, but in terms of labor force and household employment we’ve actually hit record highs.”
The contradiction could be due in part to Connecticut residents working out-of-state jobs as well as nontraditional employment (such as Uber) which remain difficult to measure, Flaherty said. However, economists will have to wait for benchmark revisions set for release in March in order to account for the sudden shift.
Reflecting a trend throughout the New England region, Connecticut’s urban areas are outperforming the more rural sections of the state. Hartford, Bridgeport, Stamford and New Haven, for example, have all hit or surpassed their pre-recession labor market strength. However, the state overall has only recovered 72 percent of jobs lost in the Great Recession.
In what Flaherty called a “stunning change,” multifamily housing permits exceeded those for single-family developments for the first time in 2015, reinforcing the shift to urban living from the traditional suburban lifestyle of Connecticut residents.
