Mass + RI Among Bottom States for Job Growth in 2014
Saturday, January 11, 2014
That sour assessment comes out of a positive national outlook from Moody's Analytics for the new year.
The economic forecasting company is predicting an increasing level of job creation nationally in 2014 based around the health care, energy, and high-tech sectors.
Regionally? “It's going to be more slow growth,” according to Leonard Lardaro, an economics professor at the University of Rhode Island.
For any given year, with “incredible regularity,” Lardaro said the state's economic growth ranking could be expected to match its alphabetical order: 39 th.
Good national forecast
Writing on Economy.com, Moody's chief economist Mark Zandi says preconditions are in place for much stronger economic growth this year.
Moody's Analytics U.S. Macro Forecast predicts accelerating job growth, leading toward “full employment” in three years, meaning a high labor force participation and a jobless rate under 6 percent.
Other 2014 forecasts are somewhat more restrained: Economists at Standard & Poor's are forecasting 1.7 percent national job growth in 2014. The National Association for Business Economics presents a panel of forecasters who see unemployment falling to an average 7 percent.
But Moody's sees the U.S. economy generating about 2.6 million jobs this year.
Unfortunately, the Northeast is expected to trail the pack led by big gains in states to the West, including North Dakota, Arizona, Texas, and Colorado.
Tepid growth in New England
Connecticut is expected to have the strongest job growth in New England, according to Moody's, growing at a 1.52 percent rate, the equivalent of 25,079 new jobs. The state is ranked 31st nationwide in forecasted growth.
Rhode Island follows in the region, ranked 40th and expected to grow at a 1.33 percent pace, adding 6,223 jobs.
New Hampshire is next with a forecast of 1.25 percent growth, or 7,984 jobs.
Massachusetts, ranked 45th in the nation, may see a job growth rate of 1.16 percent — equaling 38,368 new jobs over the course of 2014.
Vermont is 48th and Maine is 49th, with forecasted rates of 1.11 and 1.02 percent, respectively.
The U.S. Congress' joint economic committee reports only 15 states that have recovered all the jobs lost during the recession, including Massachusetts and Vermont.
In an outlook report last fall released by the forecasting group New England Economic Partnership, economists expected job growth in the Bay State to accelerate each quarter over 2014.
“The Executive Office of Labor and Workforce Development is confident that 2014 will reflect a continued trend of economic growth here in Massachusetts,” said that office's legislative director, Robert Oftring Jr.
“The Patrick administration’s commitment to investing in education, infrastructure and innovation,” Oftring continued, “coupled with the latest jobs numbers that reflect a dip in our unemployment rate and over-the-year job growth in many vital sectors of our economy ... demonstrate a positive economic forecast for Massachusetts.”
While the state saw job creation in 2013, an increasing labor market meant the unemployment rate went up in the latter half of the year. Economic growth in the state was restrained by a combination of factors at the federal level, including sequestration, the government shutdown, and the spending and debt ceiling crises.
Massachusetts is one of only 10 states to be expanding, according to Moody's, while the remainder still work on recovering from the recession.
Rhode Island slow to grow
“There has been slow growth in the Rhode Island economy,” according to Edward Mazze, a professor of marketing and supply chain management in the University of Rhode Island's college of business administration. “The economy is fragile because of the high unemployment rate, an aging population requiring more services, and poor leadership by government in creating jobs.”
Gary Sasse, founding director of the Hassenfeld Institute for Public Leadership at Bryant University and a GoLocal MINDSETTER™, said projections signaled that the state's growth would continue to lag behind the national recovery.
“It cries out for the governor and general assembly to demonstrate a greater sense of urgency in addressing work force development, tax reform, infrastructure deficiencies and other substantive economic development issues,” Sasse said.
Lardaro was more blunt in his assessment of state government. “There's a lack of meaningful economic leadership.”
“We haven't reinvented ourselves,” he said, to take advantage of burgeoning job fields in high-tech sectors, the so-called “innovation economy”. (He said the creation this year of a fund named “Innovate RI” didn't cut it.)
But Lardaro continued to say he expected current predictions to be below Rhode Island's actual growth over 2014.
“I think national job growth will be better than forecasted,” he said. “We'll get a little bit of a boost from that.”
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