CT Economic Outlook: The Good, The Bad, The Causes for Concern

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CT Economic OutlookThe Good, The Bad, The
Causes for Concern

• Edward J. Deak, Ph.D.
• Roger M. Lynch Professor of Economics
• Fairfield University, and
• CT Model Manager
• New England Economic Partnership
• CBIA Bridgeport Regional Business Council, May
  10 2006

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Whats Good About the CT Economy?

• UE rate 2/06 CT 4.5 (v. 5.0), U.S.4.8
• CT UE 2/06 82.6k v. 89.7k 2/05, LF 17.6k
• Empl 2/06 1,671.6k v. 1,659.6k, 12k, 0.7
• Job ? v. 2/05 Trade 2.2k, Fin 1.9k, EH 2.7k,
  PBS 3.0k, LH 2.3k, Govt 3.5k.
• Total add 27 firms _at_ 5,049 posted 9/05-4/06
• Future job adds RBS 800, Mgt Lenders 1k, 525
  Yale NHH, 550 Walgreens, 500 Lowes, 400 Stew
  Leonards, Foxwoods 2.6k

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What Else is Good About the CT Economy?

• Real Pers Income 150.8B, 3.0 05
• Real Per Capita Income 42,942, 2.6 05
• Housing 11,933 permits, 54.4k sales in 2005
• CT Budget Surplus 662 million
• Population Stable Less net domestic
  out-migration
• Bridgeport-Stamford Labor Mkt (nsa) 2/06 vs.2/05
• Empl 3.7k, UE rate -0.5, UE -1.9k in 2/06
• Sikorsky Strike settled, new contracts hires
• Interest in harbor front development
• New Haven Labor Market (nsa) 2/06 vs. 2/05
• Empl 1.0k, UE rate -0.5, UE -1.3k in 2/06
• Jai Alai site, 430m YNHH cancer wing biozone

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Whats Bad About the CT Economy?

• Energy costs 6th highest electric 22.4
• Costly Proposals locational capacity, ISO
  auction
• Housing costs Median sale price 305k 05
• Congestion costs I-95/Merritt J-T-W gridlock
• Posted job ? 9/05-4/06 31 firms, -6,163 jobs
• Firm cuts 1.9k EB, 850 Stop Shop, 380
  Franklin Farms, 400 MeadWestvco, 186 U.S.
  Repeating Arms, 414 TI Auto, 300 Advest, Cigna
  256, International Paper 100

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CT Economic Outlook 2006

• Empl 13.8k, full job recovery early 08
• Job cuts Construction Manufacturing
• Job adds Bus services, Finance, Govt
• UE Rate Average 4.7
• Real Pers Inc 1.9 Nominal 4.9
• Home pmts -1,324 or -11 to 10,609
• Home Sales -9,600, -17.7 to 44.8k
• Med Home Sale Price 321.9k, 5.5

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Annual Job Change 1999-06 CT vs. New Eng
U.S.
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Causes For Concern

• ? Energy prices Electric, gasoline, heating
• Firms Competitive disadv Households Tax ?
  spending
• Slow CT job recovery job growth
• Decline Earlier, longer, greater in CT than
  U.S.
• Recovery Partial, slower, lacks engine in CT
• Share U.S. jobs CT 1.24 ?, jobs ?0.7 v. 1.5
  U.S. 2/05
• 3/06 jobs Job losses gt Sikorsky by -800, watch
  April s
• ? job quality Pay opportunity 00-05
• Job loss Mfg, Info Serv, Prof Bus Services
• Job gain Leis hosp, Ed health, loc gov,
  construction
• Public education quality/skills of workforce
• Housing Bubble Prices, sales, permits, jobs