R.I. economic growth continues in 3Q, according to research center

PROVIDENCE – Economic growth continued in the third quarter, but the pace was not as fast, according to the Rhode Island Current Economic Indicator, which showed growth at 2.3 percent in the third quarter, compared with 3 percent in the second quarter.

The CEI, which is produced by the Rhode Island Expenditure Council in partnership with Bryant University’s Center for Global and Regional Economic Studies, shows that the Ocean State’s rate of growth passed the region’s third quarter growth of 2.2 percent. Growth also is expected to reach 2.5 percent in the fourth quarter, the briefing, which was released Monday, said.

Overall, the Rhode Island economy is projected to expand 2.4 percent in 2014, compared with 1.4 percent in 2013 and 1.3 percent in 2012.

And even though the state has experienced growth, it is not expected to recover 100 percent of jobs lost until 2018, the briefing said.

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The briefing said that while the “pronounced impact of the 2008 Great Recession on Rhode Island’s economy persists, it is evident that since 2011 the economic outlook has improved and that the Rhode Island economy has been expanding.”

For example, Rhode Island’s growth this quarter was driven by increased general sales and gross receipt taxes. Unemployment claims also decreased, while total wages and salary disbursements increased. The state also had positive growth trends in the following industries: professional and business services (a 7.2 percent increase); financial services (10.6 percent) and manufacturing (1.7 percent).

Even with these “promising signs of job growth,” the briefing said that there are “structural weaknesses in Rhode Island’s labor force that have not recovered to prerecession levels.”

The briefing said that Rhode Island has recovered 57.8 percent of jobs lost since the Great Recession, stating that this proportion of job recovery is lower than every other New England state. In comparison, Massachusetts has recovered 171 percent of jobs from prerecession levels, and the national economy has recovered 112.3 percent.

“Over the past few quarters, Rhode Island’s economy appears to have grown faster than New England’s, but not as fast as the nation. However, the state’s overall employment status has yet to return to pre-recession levels. This trend is in contrast to the national employment status, which has recovered beyond pre-recession levels,” John C. Simmons, RIPEC executive director, said in a statement.
“Moving forward, growth is predicted to remain above 2 percent, at 2.5 percent. An opportunity remains for the next governor to restructure and reposition the state’s economy,” Simmons said.

Rhode Island’s unemployment rate dropped to 7.6 percent in the third quarter of 2014, compared with 9 percent and 9.5 percent in the first quarter of 2014 and the first quarter of 2013, respectively.

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  1. As of 10/24/2014, Rhode Island’s Unemployment Rate at
    Level U6 is: FOURTEEN POINT FOUR PER CENT (14.4%)
    (further details at http://www.bls.gov/lau/stalt.htm updated quarterly…)
    and as of 11/7/2014, the National Unemployment Rate
    at Level U6 is: ELEVEN POINT FIVE PERCENT (11.5%)
    (further details at http://www.bls.gov/news.release/empsit.t15.htm
    updated monthly…..jkp