R.I. economic growth fails to meet expectations in 1Q

RHODE ISLAND'S economic growth failed to meet expectations in the first quarter, posting a gain of only 1.5 percent, according to the  Rhode Island Current Economic Indicator briefing released Monday by the Center for Global and Regional Economic Studies and the Rhode Island Public Expenditure Council. / COURTESY RHODE ISLAND PUBLIC EXPENDITURE COUNCIL
RHODE ISLAND'S economic growth failed to meet expectations in the first quarter, posting a gain of only 1.5 percent, according to the Rhode Island Current Economic Indicator briefing released Monday by the Center for Global and Regional Economic Studies and the Rhode Island Public Expenditure Council. / COURTESY RHODE ISLAND PUBLIC EXPENDITURE COUNCIL

PROVIDENCE – Rhode Island’s economic growth failed to meet expectations in the first quarter, posting a gain of 1.5 percent, according to the Rhode Island Current Economic Indicator briefing released Monday by the Center for Global and Regional Economic Studies and the Rhode Island Public Expenditure Council.
While the briefing said the economy experienced growth, it is showing continued signs of weakness, as its rate of growth slowed from the fourth quarter, when it grew 1.7 percent.
It also failed to meet previous projections of 2 percent growth for the first quarter.
Second-quarter economic expansion is projected at 1.6 percent, according to the briefing.

However, the state performed better than the nation in the first quarter.
The U.S. gross domestic product decreased at an annualized rate of 0.2 percent in the first quarter of 2015, compared with an increase of 2.2 percent in the fourth quarter of 2014.
The Regional Current Economic Indicator indicates that the New England economy grew at an annualized rate of 1.8 percent in the first quarter, compared with 2.7 percent in the fourth quarter of 2014.
Rhode Island’s economy has now grown at a slower rate than the regional economy in the last two quarters, according to RIPEC.
RIPEC said Rhode Island’s slower economic growth in the first quarter was largely the result of mixed performance on 11 CEI indicators that measure internal state economic activity.

Five of the 11 indicators experienced growth in the first quarter, including manufacturing employment, which increased 4.3 percent; construction employment, a 2.5 percent increase (reversing two consecutive quarters of job losses); leisure and hospitality employment, a 5.9 percent increase; and education and health services, growth of 1.1 percent.

Among the indicators contributing negatively to the CEI were trade, transportation and utilities employment, information services employment, and professional and business services employment. Among those indicators, information services employment had the greatest drop, at 5.8 percent.

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Real wage and salary disbursements also increased at an annualized rate of 3.3 percent in the first quarter, suggesting that employees are beginning to receive higher compensation, the report said. Still, general sales and gross receipt taxes decreased 1.7 percent in the first quarter, suggesting “a mixed picture in terms of consumer spending, and it is unclear how this will impact the job market moving forward,” the report said.

“Rhode Island’s economy followed the national economy and experienced a slowdown in the first quarter of the year,” John C. Simmons, executive director of RIPEC, said in a statement.

“It remains unclear whether the tide will change nationally or in Rhode Island so that the economic expansion resumes. What does appear to be clear is that the Rhode Island economy weakened at the start of this year and the projection for the near future is not as robust as was earlier anticipated,” he said.

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