By PBN Staff
PROVIDENCE – Rhode Island lost “most” of the economic momentum it experienced in the first two quarters of 2011; growth nearly halted in the second half of the year, according to a briefing released Friday.
The Rhode Island Current Economic Indicator, released by Bryant University and the Rhode Island Public Expenditure Council, increased 0.7 percent in the fourth quarter at an annualized rate.
The increase roughly matched in third quarter increase, but was significantly lower than the 2.6 percent in the second quarter.
According to the leading economic indicator measure – which projects two quarters ahead – set the economy’s growth rate at a 0.9 percent annualized rate.
“The current and leading economic indicators demonstrate that Rhode Island’s economic woes have been very difficult to overcome and that the recovery path will not be smooth or straightforward,” the briefing said.
“If the pace of growth does not accelerate soon, employment creation will idle and unemployment will remain high in 2012,” it added.
Although Rhode Island lagged in the fourth quarter, the state benefited from the improving New England and national economies.
The U.S. gross domestic product increased at an annualized rate of 2.75 percent in the fourth quarter, compared to 1.8 percent in the third quarter. New England’s economy grew at an annualized rate of 2 percent in the fourth quarter, compared to 1.8 percent in the third quarter.
Rhode Island has been lagging behind regional and national economic growth has been a decade-long pattern, the briefing said. “[The trend] must be reversed in the short term if the state is to provide an economic environment in which both residents and businesses can thrive.”
Employment declined in most sectors in the second half of the year; the only secotor to buck the trend was construction, which “continued its unexpected recovery” increasing at an annualized rate of 23.7 percent in the fourth quarter, compared to the increase of 6.3 percent in the third quarter.
Real total wages and salary disbursements increased 1.2 percent in the fourth quarter, as seasonally adjusted initial unemployment claims decreased 2.5 percent.
General sales and gross receipt taxes – a proxy for the state aggregate demand – increased at a seasonally adjusted rate of 1.7 percent in the fourth quarter compared to a 0.3 percent increase in the third quarter.