Transcript Housing in New England: Status and Consequences

New Hampshire Economic Outlook:
What is the NH Advantage?
Ross Gittell
James R Carter Professor
Whittemore School of Business and Economics
University of New Hampshire
Over the last decade NH ranks 11th of 50 states and 1st in
Northeast in employment growth. NH has the 6th highest per
capita income in the US (2003)
Region
US
New England
NH
ME
VT
RI
MA
CT
Leading State
Bottom State
Employment
Per Capita
Rank
Rank
Change 1990-2003
Income 2003
16.8%
31,632
12.4%
38,171
22.7%
11
34,702
6
16.7%
25
28,831
34
16.0%
27
30,740
22
12.5%
37
31,916
17
12.2%
38
39,815
3
7.3%
49
43,173
1
61.9% Nevada
43,173 Conn
23,448 Mississippi
5.3% Hawaii
NH’s Overall Economic Resiliency:
Total employment change and ranks
US, NH & Leading High Tech States, Colorado and Mass.
ST
NAME
01--04
Rank
01--02
Rank
02--04
Rank
03--04
Rank
Total Employment
US
US
1.0%
-0.4%
1.4%
1.6%
CO
COLORADO
-0.6%
44
-0.9%
44
0.4%
41
1.4%
22
MA
MASSACHUSETTS
-3.2%
50
-1.5%
50
-1.7%
49
0.1%
47
NH
NEW HAMPSHIRE
1.8%
20
-0.7%
41
2.5%
13
1.9%
15
High Tech..1990s boom followed by bust and forecast of
moderate growth. NH (in green) had greatest percent decline
2001-02 ..but “recovering” better than Mass
Annual Percentage Change in High Tech
Employment 1998-2008
15%
10%
5%
0%
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
-5%
-10%
-15%
-20%
NE
CT
MA
ME
NH
RI
VT
06-07
07-08
Concentration in manufacturing within high
technology in NH compared to US average
contributed to pronounced decline
MA
ME
NH
RI
US
High Tech Manufacturing as a
High Tech Services as a High Tech Telecommunications
Percentage of Total High Tech Percentage of Total High Tech as a Percentage of Total High
Employment 2003
Employment 2003
Tech Employment 2003
40.5%
41.4%
8.4%
28.3%
48.3%
15.3%
58.2%
28.1%
5.4%
36.9%
42.3%
12.5%
32.3%
44.0%
16.4%
High Technology Resiliency: NH and
other High Tech and New England States
Total High Tech Employment (June to June)
S ta te
N e w H a mpshire
Virginia
Vermont
Maryland
Rhode Island
Connecticut
Colorado
Massachusetts
California
New York
Maine
03--04
7.8%
4.1%
3.2%
1.7%
-1.1%
-1.9%
-2.2%
-2.4%
-2.4%
-4.0%
-15.3%
R a nk
4
7
8
15
26
31
34
35
36
44
48
01--04
-35.6%
-6.6%
-4.4%
-9.6%
-0.7%
-17.3%
-23.1%
-22.4%
-21.3%
-23.3%
-29.7%
R a nk
50
12
11
20
6
35
46
45
43
47
49
New Hampshire’s Strong Economic
Recovery
Latest Data NH …Jan04-Jan05
• Total employment grew 2.9% compared to US
average of 1.6% (NH ranked 8th highest)…other
fast growing states are NV, AZ, FL
• Services employment grew 5% compared to US
average of 1.7% (ranked 8th)
• High Tech Employment in NH …June 03 to June 04
 7.8% growth, NH ranked 4 highest
 big turnaround from “tech bust” decline of more
than 1/3rd and ranked 50th..
 NH reliant economy ..shift within high tech to
growth sectors from commodity manufacturing…
growth in engineering and life sciences R&D,
engineering services and testing labs and cable
and other program distribution
New Hampshire has several inter-related strengths to
sustain a high per capita income and resilient economy
Technology
Culture and
History
Favorable
business and
tax climate
Proximity to
Boston
Route 128
Cambridge
Dynamic
High Tech
Economy in
New
Hampshire
Quality of life
as a magnet for
high skilled
workers and
entrepreneurs
Access to
financial
capital
High positive correlation between high tech
employment concentration and per capita
income across the 50 US states.. NH in top tier
High Tech workers per 1000 priv ate sector workers correlated to per
capita income Median lines denote US Av g($30,906, 51.6)
120
CO
100
MA
High Tech Worker Concentration
VA
CA
MD
80
NJ
NH
60
15000
20000
25000
30000
35000
40
20
0
Per Capita Income
CT
40000
45000
50000
Educational attainment has a strong positive correlation
with per capita income. The state’s economy benefits
from an educational advantage which will have to be
sustained to keep the economy strong
Per Capita Income correlated to Percent of Adults population with
Bachelors Degree median lines denote US average (15.5%, $29,847)
45000
CT
NJ
40000
MA
Per Capita Income
MD
CO
35000
NH
30000
5%
7%
9%
11%
13%
15%
17%
25000
20000
Percent with bachelors degree
19%
21%
23%
Also very strong correlation between education and
income in NH Counties and bordering Counties
Educational advantage is the key to economic advantage
Rank of 10 NH Counties + bordering counties in Maine and Mass.
County
Middlesex,MA
Rockingham
Hillsborough
Essex, MA
Merrimack
Strafford
York,ME
Belknap
Cheshire
Grafton
Sullivan
Carroll
Coos
Median HH Income
1
2
3
4
5
6
7
8
9
10
11
12
13
Per Capita Income
1
2
4
3
5
12
10
6
11
7
9
8
13
% adults 4-yr college
1
2
3
4
5
9
11
10
7
6
12
8
13
%adults grad degree
1
4
6
3
5
7
12
8
9
2
11
8
13
New Hampshire
Leading Industries and Clusters Industries
LEADING INDUSTRY CLUSTERS
Emp
Emp Change Avg Wage
Est
Rank
Educational Services
Specialty Trade Contractors
Computer and Component Manufacturing
Finance, Insurance & Real Estate
Health Care
Professional, Scientific & Tech Services
Administrative & Support Svcs
21,170
15,306
26,153
20,918
44,038
26,701
37,189
10.7%
11.1%
3.9%
-7.5%
8.2%
26.6%
22.1%
30,606
42,052
46,311
48,496
34,841
47,785
27,543
213
2,658
269
1,316
1,960
3,779
1,556
27.3
33.0
47.4
49.0
50.1
50.3
57.0
CLUSTER Level Summary
191,475
10.7%
39,662
11,751
44.9
STATE Level Summary
427,858
8.9%
35,025
27,662
Leading Clusters as % Totals
44.8%
120.7%
113.2%
42.5%
Code
Industry
Emp
Emp Cha nge
Avg W a ge
Est
Ra nk
Educational Services
6113
6117
6111
Colleges, universities & professional schools
Educational support services
Elementary & secondary schools
14,679
187
6,304
13.2%
8.7%
10.3%
22,171
44,973
24,674
30
32
151
5
28
49
21,170
10.7%
30,606
213
27.3
Specialty Trade Contractors
2357
2358
2354
2359
2351
2356
2355
2353
2352
Concrete contractors
Water well drilling contractors
Masonry, drywall, insulation, tile contractors
Other special trade contractors
Plumbing, heating & AC contractor
Roofing, siding, & sheet metal contractors
Carpentry & floor contractors
Electrical contractors
Painting & wall covering contractors
760
253
1,901
2,923
3,711
715
1,485
2,711
847
0.9%
30.4%
-0.6%
9.4%
11.9%
-15.5%
25.1%
10.3%
27.9%
50,362
51,241
46,148
40,288
44,123
37,006
35,793
42,553
30,956
164
36
226
551
557
122
361
432
209
10
18
19
21
26
44
46
55
58
15,306
11.1%
42,052
2,658
33.0
Computer and Component Mfg
3345
3344
3359
3341
3353
Nav, measuring, medical, control instruments mfg
Semiconductor & oth electronic component mfg
Other electrical equipment & component mfg
Computer & peripheral equipment mfg
Electrical equipment mfg
7,888
11,683
4,012
1,325
1,245
-3.4%
1.1%
54.6%
-42.6%
10.1%
59,467
35,169
38,852
63,730
34,337
70
120
31
25
23
6
23
31
63
114
26,153
3.9%
46,311
269
47.4
Finance, Insurance & Real Estate
5242
5241
5222
5221
Agencies & other insurance related activities
Insurance carriers
Nondepository credit intermediation
Depository credit intermediation
3,205
9,849
1,136
6,728
-27.8%
-14.7%
1.0%
11.4%
48,772
48,343
64,638
32,231
561
178
142
435
39
41
56
60
20,918
-7.5%
48,496
1,316
49.0
21,040
7,185
3,755
2,050
5,117
696
3,675
520
13.2%
5.8%
10.6%
32.8%
0.1%
4.8%
-32.1%
30.7%
34,341
69,922
39,238
29,063
30,257
34,066
20,759
21,083
34
674
530
425
137
52
76
32
3
9
34
47
59
69
83
97
44,038
8.2%
34,841
1,960
50.1
Health Care
6221
6211
6212
6213
6214
6215
6216
6219
General medical & surgical hospitals
Offices of physicians
Offices of dentists
Offices of other health practitioners
Outpatient care centers
Medical & diagnostic laboratories
Home health care services
Other ambulatory health care services
Professional, Scientific and Technical Services
5415
5416
5417
5413
5419
5411
5412
5418
5414
Computer systems design & related services
Management, sci & tech consulting services
Scientific R&D services
Architectural, engineering & related services
Oth professional, scientific, technical service
Legal services
Accounting, tax prep, bookkeep, payroll services
Advertising & related services
Specialized design services
5,979
2,249
1,544
4,109
1,850
4,434
4,966
1,137
433
76.1%
2.0%
48.6%
5.0%
19.3%
-2.2%
15.0%
52.6%
23.0%
73,272
62,689
67,635
51,435
25,531
51,520
21,246
41,963
34,769
677
573
90
602
302
781
481
152
121
2
7
25
40
48
54
68
100
109
26,701
26.6%
47,785
3,779
50.3
Administrative and Support Services
5613
5617
5611
5614
5619
Employment services
Services to buildings & dwellings
Office administrative services
Business support services
Other support services
25,119
5,092
3,145
1,715
2,118
59.7%
10.2%
27.3%
-23.1%
36.6%
24,885
21,561
31,990
28,806
30,473
237
920
148
136
115
1
17
78
84
105
37,189
22.1%
27,543
1,556
57.0
Summary of leading industry clusters
in the State and 10 counties
Leading Industry Clusters in the 10 NH counties. Listing all
clusters that were leading in at least one county. Top 3 –
contractors, L&H and Health Care are leading in most every
county, FIRE only in one.
…the lower the # in the cell the stronger the cluster in the county
CODE
238
721-722
621-624
541
51
541
611
233
237
332-333
334-335
423
424
52-53
Leading Clusters
Specialty Trade Contractors
Leisure & Hospitality
Health Care
Professional.Scientific & Tech Svcs
Information
Administrative & Support Svcs
Educational Services
Construction of Buildings
Heavy CE Construction
Machine & Fab Metal Mfg
Computer and Component Mfg
Wholesale Trade (Durable Goods)
Wholesale Trade (Non Durable)
Finance,Insurance & Real Estate
Total
Rockingham Hillsborough Belknap Grafton Merrimack Strafford Cheshire Carroll Coos Sullivan
36.0
28.1
20.3
24.6
24.0
26.4
21.7
6.0
10.7
48.8
21.3
15.8
40.3
28.8
25.0
4.3 10.8
19.4
22.6
38.7
16.7
17.8
16.0 7.3
42.1
37.2
25.6
16.5
50.0
35.3
29
31.6
29.0
30.0
44.7
31.3
41.3
4.0
13.5
27.5
27.4
22.3
39.8
6
6
6
5
5
4
4
4
2
1
The county economies and leading industries
across the state
Sullivan and Coos have the fewest leading industry clusters
in common with other counties. These counties are not
connected to or benefiting significantly from the leading
industry clusters elsewhere in the state.
Specialty trade contractors is the most pervasive leading
industry cluster with a presence in nine out of the ten
counties. This is a product of the recent strong housing and
construction markets in the state.
Professional, scientific and technical services is a core
leading industry cluster with significant presence in four
counties. Rockingham, Hillsborough, Strafford and Carroll.
Information industries is also a core leading industry.
Leading in the technology centers of the state –the counties
of Hillsborough, Rockingham and Grafton
The health care industry is a dominate leading industry in
central and northern NH.
Hillsborough has 3 unique industry clusters not shared with
other counties, including finance and computer and
component manufacturing.
Economic Forecast: US, New
Hampshire and New England
US Economy in “sweet spot”
…growth steady but not too fast
Positives for NH
–Employment growth in US sustained and picking up pace,
w/o large increases in wages
–Inflation in check
–Business investment increasing
–US Corporate profits remain strong..yet, there are some
mixed views on future of US corporate profits with global
competition
US Economy Risks Remaining
 Continued Manufacturing decline
–e.g., in NH … Celestica’s announced closing of Salem facility and
Nashua Corp layoffs recently ..but worst appears to be over for
manufacturing in NH
 Energy price rise
– still gas prices would have to hit nearly $3.00 per gallon to reach all
time 1980s real high
Housing Market and Bubble
– but interest rates remain low and NH now part of Boston real estate
market and relatively “under-priced”
Trade deficit, dollar weakening, and fiscal crisis if
foreigners decide not to finance US debt
– but this will not have impact short-term as much as long term and
benefit of weakening dollar is increased NH exports..
New England and NH Economic
Outlook Summary
New England region in recovery
But recovery has been slow compared to previous
recoveries and has lagged US recovery mainly because of
weak Mass economy
Forecasted growth rates well below late 1990s levels
NH, once again, expected to have highest growth in
employment in the region.. Most resilient economy in
region
In NH ..Professional & Business Services, Leisure &
Hospitality and Health & Education Services expected to
grow at highest rates
New England Forecast .. moderated GSP (yellow) and
Employment (green) and GSP growth compared to late
1990s… Employment ½ of 1990s (2% down to 1.1%) ..GSP
growth down from 4.2 to 3.4 annually
Change in Total Employment and GSP Over Selected
Time Periods (New England)
6
5
Percentage Change
4.2
4
3.4
3.1
3
2.0
2
1.1
1
0.3
0
1993-98
2003-08
1998-03
Employment
GSP
Gross Product (Overall Output): Region will
catch up and then surpass US overall growth
rate..but not by as much as in the late 1990s.
Growth in US will decline slightly 2004 to 2005
GSP ---- Year To Year Changes
8%
7%
Forcasted Grow th
2004-2008
Year To Year Change
6%
5%
4%
3%
2%
1%
0%
1999
2000
2001
2002
2003
NE
2004
US
2005
2006
2007
2008
GSP Forecast..NH expected to have overall economic
growth above the US average over the forecast period…
Maine and Vermont with lowest overall growth in output
Forecasted GSP 2003-2008
5.0
4.0
4.0
3.8
3.6
3.2
3.1
3.1
MA
VT
3.0
2.9
2.0
1.0
0.0
NH
CT
US
RI
ME
Forecast: Regional Employment recovery
from early 2000s recession …New England
region (in green) has lagged behind the US
T otal Em ploym ent ---- Year to Year
Changes
3%
3%
Year To Year Percent Change
2%
2%
1%
1%
0%
1999
2000
2001
2002
2003
2004
2005
2006
2007
-1%
-1%
Forcaste d Growth
-2%
-2%
NE
US
2008
Total Employment Forecast..only NH (in green) expected to
grow above US (red) rate..Mass expected to continue to
grow below US average and lowest in region
Forecasted Total Employment Change 2003-2008
3.0
2.5
2.0
2.0
1.4
1.5
1.3
1.3
1.2
1.0
0.9
0.9
CT
MA
0.5
0.0
NH
US
ME
RI
VT
New Hampshire in all “super sectors” is expected to grow employment at rate
higher than regional and US average. In NH the strongest sectors are
forecasted to be Prof. & Business Services followed by Leisure & Hospitality
Forecasted Avg Annual Employment 2003-2008
4.5
3.5
3.32
3.22
3.02
2.87
2.60
2.5
1.93
2.07
2.23
2.13
1.49
1.5
1.19
0.85
0.85
1.02
0.5
-0.5
Prof
/Bus
Leis
Hea
Trad
ure
lth &
e
&
Svcs
Edu
Hos
p.
Fina
nce
-0.83
-1.5
-2.5
-3.5
NH
Info
High
Mfg
rma
- Tec
tion
h -0.61
NE
NH Summary: Average Annual Growth
1993-98; 98-03; 03-08. Recovery from early 2000s
recession, moderate growth compared to mid-1990s
NH Average Annual Growth: 1993-98, 98-03 and 03-08
12
11.1
10
8
7.2
6.8
6
4.5
% chg
4
4
3.5
3.9
3.2
3.1
2
2
2.9
4
3.8
3
3
2.6
4
3.3
3.2
2.3
1.9
2.2
2.7
1.5
0.9
0.3
0
GSP
Tot Emp.
Trade
E&H
Manuf.
-0.8
L&H
P&B
HT
-2
-4
-3.6
-5
-6
93 to 98
98 to 03
03 to 08
Info
-0.8
Hprice
Unemployment Forecast ..NH expected to have lowest
unemployment, Mass one of the highest
…NH unemployment Dec 2004, 3.3, compared to US, 5.4
and NH Dec 2003 of 4 percent
Forecasted Average Unem ploym ent 2003-2008
7
6
5.4
5.2
5.2
4.8
5
4.2
4
3.5
3.3
3
2
1
0
US
RI
MA
CT
ME
VT
NH
New England and NH Looking
Forward
Key Issues
–Recovery in high tech?
Can New England & NH compete effectively in retaining
well paying high tech jobs and investment and shifting
high tech to new growth sectors. Need to maintain
leadership in education and R&D and quality of life.
–Demographics. Even with slow growing
employment, unemployment low.
Slow population growth, migration out of the young and
educated, aging population.
–Rising Interest Rates.
What will be the impact of rising interest rates on housing
prices (bubble?) and consumer spending?