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May 3, 2019

Slow CT job growth expected to continue

PHOTO | File The State Capitol in Hartford
By Michael C. Bingham

Connecticut’s recovery since the great recession has significantly lagged behind both New England and the nation. This is reflected in any number of metrics. The Constitution State is the only New England state to record a decline in real GDP between 2007 and 2017 — down 9.1 percent compared to a New England average of plus 6.4 percent and a U.S. average of plus 15.5 percent.

That pale performance is likewise reflected in job growth, which also has lagged both the region and the nation as a whole. But there are some signs of springtime for Connecticut’s employment picture.

In 2018, Connecticut’s unemployment rate fell to its lowest level since 2002, and the state’s labor force participation rate hit its highest level in eight years.

Now, new 24-month projections by the state’s Department of Labor and Department of Economic & Community Development (DECD) chart a 1.1-percent increase in jobs from the second quarter of 2018 to 2020’s second quarter — an overall increase from 1,900,570 to 1,920,595. These projections were made public this week in the Connecticut Economic Digest, jointly published monthly by the DOL and DECD.

Connecticut’s unemployment rate is low, despite slow job growth, because the state’s working-age population has also increased at a slower pace – up 5.2 percent over ten years compared to a 9.9-percent increase nationally. “To put it simply,” concludes the Economic Digest, “our slower population growth is resulting in slower employment growth.”

The industries that are projected to add the most jobs through 2020 are Transportation & Warehousing (a single industry for DOL tracking purposes), Social Assistance, Administrative & Support Services, and Health Care.

Growth in the Transportation & Warehousing sector is driven by consumer demand shifting to online shopping. Warehouse distribution centers have been built throughout the state in recent years — most notably a new 855,000-square-foot Amazon fulfillment center slated to open this summer on the site of the former Pratt & Whitney manufacturing plant in North Haven. Overall, 83 percent of job gains projected by the report are in the Warehousing component of that sector.

Of course, the migration of retail to online is a double-edged employment sword: Connecticut lost 3,691 jobs in the Retail Trade sector in the 24 months leading up to the 2018 Q2 projection base. Despite that decline, Retail Trade remains one of the largest employment sectors — averaging 180,000 jobs statewide during 2018’s second quarter.

Other growing sectors include manufacturing, which DECD projects to add a modest 1,600 jobs over the two-year period.

Employment in the Finance & Insurance sector fell by 4,000 jobs during the two years ending 2018 Q2, as banks and investment firms contracted in Connecticut and beyond. However, the insurance industry added approximately 800 jobs in the survey period.

Contact Michael C. Bingham at mbingham@newhavenbiz.com

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