It’s tough to get a break on economic news in a state where every piece of good news is matched by word of layoffs and sluggish job gains overall. Now we find that even the recent past was worse than we thought, and that means, according to the latest UConn forecast, another two years of lousy gains.
The recession knocked nearly 9 percent off Connecticut’s overall economic output, and it bottomed out toward the end of 2009, not the spring of that year, according to U.S. Department of Labor revisions cited in a new forecast by the Connecticut Center for Economic Analysis at the University of Connecticut.
That’s dramatically worse than the 3 percent drop we thought we had seen — though, in reality, did anyone really think the decline from the end of 2007 to the middle of 2009 was in the low-single digits?
The old numbers matter, though, because they guide predictions, and CCEA now says Connecticut’s overall economic output will grow by 0.6 percent over the next 12 months, followed by a whopping gain of 1.3 percent — adjusted for inflation, which is predicted to be 1.3 percent.
This translates to lukewarm job gains of 10,000 to 20,000 over the next two years, according to CCEA, which is headed by economist Fred V. Carstensen. The difference in those two numbers is based on the likely positive effects of big projects such as the expansion of the UConn Health Center and Jackson Labs, which Catstensen supported mightily, along with the Hartford-New Britain Busway, which is federal pork, but it’s our pork and we need it.
Connecticut’s vaunted finance, insurance and real estate sector, which accounts for about a third of all economic activity, showed a scary drop in the spring, CCEA reports — not flat, but actually down for the quarter. The good news is that other services, including health, are still rising.
Another bright spot in 2012 is the home construction market, which showed a gain of 33 percent in new permits in the first six months of this year compared with the same period in 2011.
But that’s a gain from an anemic year in which permits fell below 3,000, probably for the first time since the Spanish-American War. In all, even the newly enlarged housing construction industry accounts for about $1 billion, which sounds big but it’s only one-half of 1 percent of the state’s economy.
By the middle of 2014, we’ll still be at least 65,000 jobs short of the total we had at the start of 2008, CCEA’s forecast shows.
“Closing this gap will require more than just job creation,” the report said. “It requires policies to recover the pride and the employability of persons who have suffered from long-term unemployment.”
The report cites two examples: The Mashantucket Pequots’ long and proud history of rehabilitating individuals drawn from the slums of New England,” and “Platform to Employment” in Stamford, a public-private effort that offers 5-week courses to “reorient” people whose unemployment benefits have run out.