Report: RI Unemployment to Remain Above 9% Until at Least 2014
Thursday, December 06, 2012
Rhode Island’s unemployment rate is projected to remain above 9 percent into 2014, according to a new report released by the New England Economic Partnership.
Mazze and Tebaldi point to some improvements in the state’s economic condition in 2012, but the report also suggests the pace remains sluggish.
“The Rhode Island economy has shown mixed signs of improvement in 2012. Net general sales and gross receipt taxes, a proxy for the state aggregate demand, increased 3.8% over the first 10 months of 2012 compared to the same period of 2011,” the report states. “This suggests that Rhode Islanders have increased spending in 2012, indicating an improvement of overall economic conditions in the state. Employment in construction, manufacturing, leisure and hospitality and financial services has also increased over the year. However, other sectors of the economy are still struggling and have shed jobs over the year, including professional and business services, health care and social assistance, government, and wholesale trade.”
At 10.4 percent, Rhode Island has the second highest unemployment rate in the country in October. The report suggests the jobless rate will remain above 10 percent through 2014 and will drop to 9.1 percent the following year. By 2016, Mazze and Telbaldi predict that number will drop to 6.9 percent.
The report suggests that most of the jobs that are expected to be created from over the next four years will be in leisure and hospitality, professional and business services, education, state and local governments, health services, and financial activities. The forecast indicates that retail trade, warehousing and utilities, information, wholesale trade, and transportation will add very few jobs in the state over the next few years.
Overall, the forecast suggests that Rhode Island’s job market will continue trailing job creation in the rest of the nation.
“From 2011 to 2016, the annual growth rate of employment is forecasted to be 1.3 percent in Rhode Island, compared to 2 percent in the United States,” the report states. “Total nonfarm employment is forecasted to be 461,400 in 2013 as compared to 458,000 in 2012, an increase of 3,400 jobs. Rhode Island’s nonfarm employment is expected to be 479,100 in 2015, an increase of about 21,000 jobs from 2012.”
Maze and Tebaldi say the state’s median housing price is expected to increase from $221,100 in 2013 to 233,400 in 2016. The number of new home construction permits is low, but the professor project that that that rate will increase significantly over the next four years.
“Housing construction is still at very depressed levels in Rhode Island,” the report states.
The report also suggests the state is entering 2013 with a few economic victories and significant obstacles, including the pension reform lawsuit and potential $130 million deficit. Mazze and Tebladi say a full scale economic recovery in Rhode Island will not happen unless there is a plan that includes government, education, labor unions and business leaders working together.
“Economic growth in Rhode Island will take place when the state can creatively use its strategic assets such as location, strong transportation system, quality of life and outstanding colleges and universities to retain and attract businesses,” the report states. “The state’s economic future is in small business and the development of new businesses through entrepreneurship. The state has to make it easier and less expensive to do business so that businesses can grow and add employees.”