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September 26. 2012 1:59AM
Job seekers fill out applications during the Holiday Retail Job Fair at The Mall at Rockingham Park in Salem Tuesday. (Mark Bolton/Union Leader)
Panelists: New Hampshire's job engine losing steam
Job seekers fill out applications during the Holiday Retail Job Fair at The Mall at Rockingham Park in Salem Tuesday. (Mark Bolton/Union Leader)
MANCHESTER -- Blame it on the recession. Blame it on changes in the state's economy and stalled population growth.
Whatever the reasons, New Hampshire is starting to look a lot like the rest of the country, and we had better adapt. That was the consensus of panelists at this year's annual Economic Forecast hosted by the Greater Manchester Chamber of Commerce.
“The state is undergoing some fundamental changes and some real challenges,” said Brian Gottlob, president of PolEcon Research in Dover (See related story, Page B3.) “The biggest challenge we have is understanding we are not entitled to superior economic growth. Two decades of superior economic growth (in the 1980s and '90s) have given us a sense of entitlement. I think until we realize that is not the case, we won't rise to the challenge.”
Gottlob was joined by Dennis Delay, economist for the New Hampshire Center for Public Policy Studies; and Ross Gittell, chancellor of the Community College System of New Hampshire.
They took turns sharing their predictions on the state's economic future, short-term and long-term, with the local business community gathered at the Derryfield Country Club.
A job-creating machine in the 1980s, New Hampshire is now in the middle of the pack nationally when it comes to private sector economic growth, said Gottlob. It lags behind all other New England states except Rhode Island and Maine.
Private sector jobs are growing at a faster rate in Connecticut, Massachusetts and Vermont, he said, “and it isn't just a function of the recession.”
Gottlob suggested the decline in exports, fueled largely by the growing economies of China and India, has hit New Hampshire particularly hard. “I think employment will stabilize,” he said, “but at a relatively slow rate.”
Slower population growth
Delay pointed out that much of the state's economic strength in the 1980s and 1990s was fueled by dramatic population growth — a trend that has stalled in the past 12 years. Meanwhile, Connecticut and Massachusetts gained population.
Gottlob called it “southern discomfort” to many New Hampshire residents that “southern neighbors whose policies we often deride” are adding jobs and population, while the Granite State limps along in the middle of the pack nationally.
The trend is also reflected in unemployment rates, according to Gittell. “New Hampshire has the seventh-lowest unemployment rate in the U.S.,” he said. “That seems pretty low, but it used to be fourth-lowest. Vermont is now fifth-lowest. People in New Hampshire don't like having a higher unemployment rate than Vermont.”
Vermont has benefitted from growth in the purchase of second homes and an infusion of federal money in the wake of Hurricane Irene. Massachusetts and Connecticut benefit from the critical mass of urban centers and universities that attract technology investment.
Tax structure
The New Hampshire tax advantage, they agreed, is not having the same impact it had in the past.
“I think there has been a New Hampshire Advantage,” said Gottlob, “but it is understood only halfway. We have this tax structure that does favor well-educated, skilled entrepreneurs. But the other side of that is what people really want in the advantage — they want value. They want quality services at a lower cost than they would pay elsewhere.”
Gittell said the state's tax structure has been a good selling point, but that the heavy reliance on business, corporate and capital gains taxes may be affecting the state's ability to create new jobs.
He suggested the state will not recover all the jobs lost in the recession until well into 2014, while the housing market could take even longer to recover.
“There are signs that housing has hit some kind of bottom,” said Delay, predicting that housing values may not return to their 2005 peak until the end of the decade.
Government gridlock
All three economists agreed the state's fortunes are hooked to the national economy, which appears to be on hold pending the outcome of the November election.
New hiring is virtually at a standstill among small businesses — those with 250 employees or less, which account for half the jobs in the country.
Gittell warned that breaking the partisan gridlock in government will be essential to restoring confidence among businesses and consumers.
“We have to see some reaching across partisan lines and action on tangible economic policies,” he said.
Gottlob agreed: “The lack of clarity is having a profound impact.”
Dave Solomon may be reached at dsolomon@unionleader.com.
Whatever the reasons, New Hampshire is starting to look a lot like the rest of the country, and we had better adapt. That was the consensus of panelists at this year's annual Economic Forecast hosted by the Greater Manchester Chamber of Commerce.
“The state is undergoing some fundamental changes and some real challenges,” said Brian Gottlob, president of PolEcon Research in Dover (See related story, Page B3.) “The biggest challenge we have is understanding we are not entitled to superior economic growth. Two decades of superior economic growth (in the 1980s and '90s) have given us a sense of entitlement. I think until we realize that is not the case, we won't rise to the challenge.”
Gottlob was joined by Dennis Delay, economist for the New Hampshire Center for Public Policy Studies; and Ross Gittell, chancellor of the Community College System of New Hampshire.
They took turns sharing their predictions on the state's economic future, short-term and long-term, with the local business community gathered at the Derryfield Country Club.
A job-creating machine in the 1980s, New Hampshire is now in the middle of the pack nationally when it comes to private sector economic growth, said Gottlob. It lags behind all other New England states except Rhode Island and Maine.
Private sector jobs are growing at a faster rate in Connecticut, Massachusetts and Vermont, he said, “and it isn't just a function of the recession.”
Gottlob suggested the decline in exports, fueled largely by the growing economies of China and India, has hit New Hampshire particularly hard. “I think employment will stabilize,” he said, “but at a relatively slow rate.”
Slower population growth
Delay pointed out that much of the state's economic strength in the 1980s and 1990s was fueled by dramatic population growth — a trend that has stalled in the past 12 years. Meanwhile, Connecticut and Massachusetts gained population.
Gottlob called it “southern discomfort” to many New Hampshire residents that “southern neighbors whose policies we often deride” are adding jobs and population, while the Granite State limps along in the middle of the pack nationally.
The trend is also reflected in unemployment rates, according to Gittell. “New Hampshire has the seventh-lowest unemployment rate in the U.S.,” he said. “That seems pretty low, but it used to be fourth-lowest. Vermont is now fifth-lowest. People in New Hampshire don't like having a higher unemployment rate than Vermont.”
Vermont has benefitted from growth in the purchase of second homes and an infusion of federal money in the wake of Hurricane Irene. Massachusetts and Connecticut benefit from the critical mass of urban centers and universities that attract technology investment.
Tax structure
The New Hampshire tax advantage, they agreed, is not having the same impact it had in the past.
“I think there has been a New Hampshire Advantage,” said Gottlob, “but it is understood only halfway. We have this tax structure that does favor well-educated, skilled entrepreneurs. But the other side of that is what people really want in the advantage — they want value. They want quality services at a lower cost than they would pay elsewhere.”
Gittell said the state's tax structure has been a good selling point, but that the heavy reliance on business, corporate and capital gains taxes may be affecting the state's ability to create new jobs.
He suggested the state will not recover all the jobs lost in the recession until well into 2014, while the housing market could take even longer to recover.
“There are signs that housing has hit some kind of bottom,” said Delay, predicting that housing values may not return to their 2005 peak until the end of the decade.
Government gridlock
All three economists agreed the state's fortunes are hooked to the national economy, which appears to be on hold pending the outcome of the November election.
New hiring is virtually at a standstill among small businesses — those with 250 employees or less, which account for half the jobs in the country.
Gittell warned that breaking the partisan gridlock in government will be essential to restoring confidence among businesses and consumers.
“We have to see some reaching across partisan lines and action on tangible economic policies,” he said.
Gottlob agreed: “The lack of clarity is having a profound impact.”
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Dave Solomon may be reached at dsolomon@unionleader.com.
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