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Study: NH trails Mass. in job growth

State House Bureau

October 14. 2015 8:25PM

CONCORD — New Hampshire’s recently released unemployment rate of 3.4 percent is well below Massachusetts’ 4.7 percent, but a recent study paints a different picture of job growth in the two states.

The Josiah Bartlett Center for Public Policy, a conservative, free-market think tank, says instead of leading the region out of the recession as New Hampshire has done in the past, Massachusetts job growth is leaving New Hampshire in its wake.

“If we had grown at the same pace as Massachusetts has, we’d have 27,000 more jobs in New Hampshire,” center President Charlie Arlinghaus said.

Bartlett study author, Josh Elliott-Traficante, notes Massachusetts recovered from the Great Recession in terms of employment and jobs two years ago, but New Hampshire did not cross that plateau until June 2015.

While job growth may be higher in Massachusetts, Dennis Delay, economist for the NH Center for Public Policy Studies and the New Hampshire forecaster for the New England Economic Partnership, said the state can expect robust job growth in 2016 — 2.2 percent driven by the recovering housing market and low energy prices. The partnership meets today for its annual conference.

“Next year New Hampshire will grow faster than Massachusetts,” Delay said. “That is my bold prediction.”

Massachusetts job growth is expected to be 1.8 percent in 2016.

“Our economic growth was tied for the best in New England in 2014 and beat the national average, we currently have 8,500 more private-sector jobs than pre-recession levels, and the New Hampshire Center for Public Policy Studies’ New Hampshire Economic Outlook for October 2015 forecasts strong employment and economic growth for 2016,” said William Hinkle, director of communications for Gov. Maggie Hassan. “Despite this progress, Gov. Hassan knows that there is still more work to expand middle-class opportunity and keep New Hampshire’s economy moving in the right direction, and she will continue working with members of both parties to advance critical economic priorities.”

Three metrics

The Bartlett study uses three metrics based on labor bureau information: the number of jobs, the number of employed residents and the size of the workforce.

Massachusetts lost 4 percent of its jobs during the recession; New Hampshire lost 4.6 percent, the study says. But since that time, Massachusetts’ average annual job growth rate is 1.6 percent. New Hampshire’s is .9 percent.

And the percentage of employed residents in Massachusetts also outpaces the Granite State.

The number of Massachusetts residents working averaged 1.4 percent growth a year, while New Hampshire averaged .66 percent.

Elliott-Traficante said the lower growth rate meant New Hampshire only returned to its pre-recession level of employed workers in February 2015, nearly two years after Massachusetts, which indicates more Granite Staters are working outside the state than before the recession.

But Bruce DeMay, director of the economic and market information bureau of the state Department of Employment Security, said the number of state residents working in out-of-state jobs has remained nearly constant for the last 30 years — between 16 to 17 percent, with most working in Massachusetts.

With the recession, both states saw declines in the size of their labor forces — people working or actively looking for work — and have seen small but steady improvements since.

Massachusetts returned to its pre-recession level in March 2012, with growth picking up beginning in late 2013.

New Hampshire’s labor force recovered to pre-recession levels in May 2015, but recent months have shown accelerated growth, according to Elliott-Traficante.

Wake-up call for NH

Arlinghaus said New Hampshire has lost its competitive advantage with high business taxes, labor and health care costs, and most significantly, energy costs.

“If you’re a company that uses a significant amount of electricity,” Arlinghaus said, “why would you come here?”

The state has rested on its laurels for some time, believing companies will come here because New Hampshire is a dynamic state, Arlinghaus said.

“When you think you won, you stop competing. We thought we won and we stopped competing,” he said. “Now we can’t get into our heads we are losing and that has to change.”

He said the competition now is not among New England states, but between New England and South Carolina or Tennessee.

DeMay believes one of the reasons New Hampshire lagged behind Massachusetts in job growth after the recession is the industry mix in the Bay State.

“The recovery was concentrated in financial services — which had a boost with lower interest rates and the Fed — high-tech companies and health care,” Delay said. “Massachusetts has a higher concentration of all three and that is why they did better.”

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