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Connecticut

Connecticut. Edward J. Deak, Ph.D . Professor of Economics Fairfield University. Current Economic Condition CT: September 2007. CT Econ Expansion: Best job gains in 2006 + 07 Job creation = +17.6k in 2006; +16.8k jobs 1-9/07 Jobs vs. year ago = +19.8k vs. September 2006

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Connecticut

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  1. Connecticut Edward J. Deak, Ph.D. Professor of Economics Fairfield University

  2. Current Economic Condition CT:September 2007 • CT Econ Expansion: Best job gains in 2006 + 07 • Job creation = +17.6k in 2006; +16.8k jobs 1-9/07 • Jobs vs. year ago = +19.8k vs. September 2006 • Recovered – Post 9/11 jobs lost as of Aug 2007 • U.S. - added 8.1 mil net jobs = 298% gain • Unemploy rt - 4.5% v. 4.4% in 9/06; v. 4.7% U.S. • Real GSP = +2.6% in 2006 vs. 2.9% for U.S. • Ave # Weekly new claims UE insur - 100 v. 9/06 • 7/9 LMAs show job gain vs. 9/07 (nsa) • Bpt-Stfd +6.2k, Htfd +3.3K, NH -200 • Caution: Job revision 3/08 U.S. # -300k CT = -3k?

  3. CT Current Economic Conditions • Vast arrayof proposed/actual commercial real estate and employment projects • Antares Stamford, Steel Point Bpt, Casinos Eastern CT • Wall Street/Finance –Many links to CT • High concentration of wealth + wealth holders • High # Wall Street traders + Local financial • managers • High # hedge funds, private equity & venture • capital firms + employees • Fear – Growth recession w/RGDP <+2% • 33-40% odds of full U.S. recession through 2009

  4. CT Economic Outlook:Warning Signs • External Threats to CT Expansion: • U.S. housing recession + Financial market freeze • Weaker fin service bonus income: 5-10% 1/08 + 1/09 •  CT energy costs – Elec, gasoline, HHO = $8,220 per yr. • Rising U.S food prices – Corn diversion to ethanol • CT housing Puzzle: – Fewer sales/permits w/ prices • Home permits; 22.3% = ‘06 (DOC, 169 towns) • DECD(128 town) = -15% thru 9/07 vs. -16%=9/06, -3%=9/05 • Median sale price + Sales volume(Rosa-Prudential 1-10/07) • 1-Fam = Sales -9.2% Median Price +5% • Condo = Sales -11.5% Median Price +1.6% • Inventory: Higher Time on market: Longer • Buyers: Fewer Delinquencies: Rising

  5. U.S Housing Recession:Selective Spread to CT • Mgt Delinquency % of #:CT 2.4% US 3.1% • Sub-prime mgt delin % #:CT 23.6% US 23.1% • Foreclosure Filings:1-6/07 vs. 1-6/06 (Realty Trac) • Bpt/Norwalk/Stfd +522% 2,847 • New Haven/Milford +547% 4,019 • Hartford +446% 4,326 • Foreclosure Filing rate:Per number of households • Bpt/Nor/Stamford 1:122 Hartford 1:112 • New Haven/Milford 1:86 Stockton CA 1:27 • Key CT Housing Problem:No jumbo mgts accept by Fanny/Freddie ($417k+)

  6. Projected Job Change %CT vs. U.S 2006-2011

  7. Specific CT Job Changes • Job Additions: • Foxwoods Casino +2,300 in 2008:Q3 • Mohegan Sun Casino +2,000 in 2010 • Royal Bank of Scotland 1,000 late 2008 • St. Paul/Traveler’s 600 2007-08 • Carbala’s 600 2007:Q3 • Job Cuts: • Pratt & Whitney -300 2007:Q4 • Clairol -235 2010:Q1 • Hershey -200 2007:Q3

  8. CT Job Changes byEmployment Sector(000’s Jobs) 2006 2007 2008 2009 2010 2011 2012 • Mfg -1.6 -0.9 -2.1 -0.8 -0.3 -1.0 -1.1 • Const 1.0 1.2 0.8 -2.1 -5.6 -2.5 0.2 • Trade 0.3 0.8 -1.3 -0.7 0.7 0.3 0.5 • Leis/Hosp 2.7 3.6 2.3 1.2 2.3 2.1 1.8 • Ed/Hlth 6.6 5.0 5.6 5.8 6.2 5.8 4.8 • Fin Serv 1.9 1.8 1.2 1.1 0.7 0.8 -0.1 • Bus serv 4.5 3.2 -0.4 3.9 5.2 3.3 2.7 • Govt 1.9 0.4 1.9 2.6 1.2 1.8 1.1

  9. Real Personal Income+ RGDP: % Change CT vs. U.S. 2006-2011

  10. CT Housing Projections:% Change 2005-2012

  11. CT Competitiveness • CT Growth Challenge:CT Econ Res Center(CERC) • Trend towards work outsourcing • Housing and education gaps • Slow growth of aging population • Out-migration of college students + young professionals • Impoverished + under-trained urban workforce • Priorities: • Craft globally competitive system of education + training • Create a base of dynamic + vibrant cities • Construct affordable + good quality housing • Design integrated, cost-effective transportation infrastructure to move both people and goods • Build climate for business investment, innovation, R&D

  12. CT Competitiveness • Business Cost Index CT MSA v. US: Overall + Specific cost as of 2005 + Trend 1990-2005 • Bpt-Stfd = 118.6 Energy 148.7 Labor 119.3 Trend +5% • Hartford = 102.6 “ 146.4 “ 96.3 “ +1% • New Haven=104.5 “ 148.7 “ 97.0 “ +3% • Norwich = 106.0 “ 146.4 “ 96.3 “ +4% • Taxes and office rent costs below U.S. average • Productivity – GDP per employee • U.S: 1980-2006 = +45.8% 2000-2006 = +11.6% • CT: 1980-2006 = +89.9% 2000-2006 = +10.9% • CT “Fast 50”: Defibtech 5-yr sales growth 16,000+%

  13. Summary + Observations • CT Recovery – Finally joined U.S. expansion 8/07 • CT Growth to 2012 – Modest, near U.S. pace • CT/U.S Outlook Concerns: • Housing recession, credit freeze, financial losses • Higher energy costs, election uncertainty, Iran? • CT Competitiveness Challenges: • Aging population + Out-migration of young + college • Affordable housing +Transportation + Urban centers • Gaps: Worker skills + training, income distribution • High business cost: Especially Energy + some labor

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