economy

Forecast: Rhode Island grows weakly through 2015

COURTESY NEW ENGLAND ECONOMIC PARTNERSHIP
BLUE: Total employment in Rhode Island. RED: Nonfarm jobs based in Rhode Island. For a larger version of this image, CLICK HERE.
Posted 11/18/11

PROVIDENCE – Rhode Island faces three major challenges: creating jobs, solving the pension and budget problems, and streamlining its cumbersome regulatory system, two professors said.

“Job growth is happening in many states but not in Rhode Island because of structural problems – including the high cost of doing business and cumbersome regulations in the state – and the lack of skilled workers in a number of employment sectors,” Edward M. Mazze, University of Rhode Island, and Edinaldo Tebaldi, Bryant University, said in their 2011 forecast, “The Rhode Island Economic Outlook and Forecast: The Changing Demographics of the Economy,” presented Friday at the Fall Outlook Conference at the University of New Hampshire-Manchester.

Rhode Island’s real gross state product is expected to grow at an annualized rate of 2.1 percent from 2010 to 2015, smaller than New England’s expected 2.5 percent.

“At this pace, the jobs lost during the recession will not be re-created, and real wages and real personal income will stay stagnant in Rhode Island over the next few years,” it said. Unemployment, it forecast, will be greater than 10 percent until the end of 2012 and will reach 8 percent in 2015.

Also, a “strong rebound” in the housing market is “unlikely” to happen until 2015.

Population growth in the Ocean State is expected to be just 0.1 percent from 2010 to 2015. The number of those above the age of 65, however, are expected to grow at an annualized rate of 1.8 percent, while those between the ages of 5 to 19 will shrink.

“This indicates that the relative qualifications of the Rhode Island labor force is not expected to change significantly in the near term.”

Rhode Islanders’ educational attainment is slightly higher than the national average but lower than the New England average. Statewide, 30.6 percent of men and 29.9 percent of women over the age of 25 have at least a bachelor’s degree, compared with the New England ratio of 35.7 percent, men, and 35.4 percent, women.

“The state must support educational programs that prepare individuals for jobs in a knowledge-based economy,” the forecast said, while identifying the sectors that will have the most number of new jobs as: professional, scientific and technical services; education; financial services; ambulatory health care services; hospitals; restaurants; nursing and residential care; Internet service providers; social services; and specialty trade contractors.

“Many of Rhode Island’s socio-economic indicators have been stuck in neutral or deteriorated over the last few years,” causing low business and consumer confidence, it said. “By ignoring these problems, the state will fall into a more difficult economic situation with less chance of economic growth.”

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