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Vermont

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Vermont. Jeffrey B. Carr and Zachary H. Sears. Economic & Policy Resources, Inc. Media sponsor: ... Payroll Job growth has now turned negative (Yr-Yr basis) ... – PowerPoint PPT presentation

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Title: Vermont


1
Vermont
  • Jeffrey B. Carr and Zachary H. Sears
  • Economic Policy Resources, Inc.

Sponsor
Media sponsor
2
Current Vermont Conditions
  • A lot has happened in the Vermont economy since
    last Springwith most major indicators
    deteriorating.
  • Payroll Job growth has now turned negative (Yr-Yr
    basis)
  • Unemployment has increased to 5.2 (for Sept.),
    even though it remains lower than U.S. and 4 NE
    states
  • Consumption spending is restrained (based on
    sales tax revenues) and the freeze in credit
    markets has stalled car sales
  • The Housing Market is weakbut could be worse.
  • Construction spending has nose-dived
  • Mortgage Delinquency rate remains low (6th in
    U.S. - 1st in N.E)
  • House prices have only recently shown
    declinesVermont price declines have been no
    where near the level experienced in other states.
  • The revenue forecast for the state was downgraded
    just this week by roughly 100 million or 4.3 in
    the General Fund.
  • The forecast for fiscal year 2009 and 2010 has
    been reduced by more than 200 million since
    January of 2008.

3
Current Vermont Conditions
  • The few positives there are out there are few
    and far between.
  • Canadian visitor activity remains positive, but
    the appreciation of the U.S. dollar has seriously
    cut into the economic incentive to shop south of
    the border.
  • Advance bookings for the Winter tourism season
    are up significantly, but bookings under
    stressful economic circumstances (such as now)
    are often insecure and vulnerable to
    cancellation.
  • The energy price situation has improved relative
    to last May and from the mid-July fossil fuel
    price peak.
  • This has eased what was an unprecedented 800
    million (at annual rates) run-up in energy prices
    that occurred during the first half of calendar
    year 2008.
  • This will help visitors, residents, and
    businesses across our rural state where residents
    and visitors alike drive everywhere, and where
    businesses--particularly manufacturing
    businessesare very energy-intensive.
  • But it wont help those who locked in at
    earlier, higher prices

4
The forecast is for a rough couple of yearswith
VT in the middle of the pack
5
The Housing Market in Vermont
  • House prices will decline for 7 consecutive
    quarters beginning in 2008Q2but will recover
    relatively early in 2010Q3

6
Mortgage Delinquency Rates Will Get Worse
  • even though Vermont is currently the 6th lowest
    in U.S. and lowest in the region.

7
Worst Recession in Vermont since World War II,
except for the early 1990s
8
The Vermont OutlookBad, But It Could be Worse
  • The threats are looming, after all, this is a
    recession
  • Slow down in domestic tourism,
  • Appreciation in U.S. dollar vs. the Canadian
    Loonie,
  • A slowing second home market,
  • The job losses are mounting with layoffs
    increasing--the factory sector such as autos and
    semiconductors), financial services, Real Estate
  • Public sector cutssome services could be cut?
  • But there are some positives
  • Relatively few forced liquidation and distressed
    sales,
  • House prices are not expected to decline as much
    as other N.E. states, and prices should recover
    sooner,
  • Lower energy prices are good for the states
    tourism industrybut they are not low enough,
  • Ski resorts are poised for a good winter, but
    will the weather and energy prices cooperate?

9
The Vermont OutlookBy The Numbers
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