Connecticut will enjoy relatively robust growth of 2.64 percent for 2011, sufficient to raise total Connecticut employment by 6,000 in the fourth quarter of 2011, predicts the newest issue of The Connecticut Economic Outlook.
Under the title “Outperforming the Nation: Can It Be Sustained?” the new quarterly anticipates that Connecticut will sustain economic growth well above the national pattern through the end of this year, using a dual projection based on both employment sectors and sector personal income estimates. The Connecticut Center for Economic Analysis (CCEA), which produces the Outlook quarterly, has found that the lesser of these two estimating procedures often provides the most reliable estimate for Connecticut’s current year performance.
Looking ahead, the Outlook predicts, state government’s major public investments in biomedical initiatives in Farmington have the potential to boost output and employment, although it may take time for the effects to be manifest. Despite Bioscience Connecticut being in the early stages of construction and recruiting, the forecast adds that construction and hiring will more than double the rate of job creation otherwise expected during the two-year building period. Other investments, the expansion of the UConn Health Center’s School of Medicine and Dentistry, including the Bioscience Center, and the Jackson Laboratory development, are expected to provide additional returns.
“This high level of payoff from these strategic public sector investments serves as a powerful reminder of the scale of benefit such government initiatives can deliver,” notes Fred Carstensen, director of the CCEA.
“The expansion activity alone will add another 7,000 direct, indirect, and induced jobs to the already expected job creation of 11,000 in the baseline forecast for 2011Q1 to 2013Q3,” he says. Further building on this emerging bioscience cluster and the acceleration of other major projects such as the New Britain-Hartford Busway will generate additional stimulus, Carstensen predicts.
The CCEA forecast cautions, however, that it does not include any capital projects beyond the Bioscience complex and does not take into account the economic impact that policy commitments to other major infrastructure investments around the state might have. Despite that limitation, and even allowing for some delays in the projects included in the study, Carstensen suggests that the new Outlook “may well underestimate” the impact of this scale of capital projects.
“In the aggregate,” Carstensen says, “north central Connecticut will see major construction projects increasing from $137.5 million in 2010 to $232.5 million in 2011. Current commitments reach $459.4 million in 2012 and then $1.5 billion in 2013.”
In addition, solid growth of Connecticut Real Personal Incomes (RPI) will help sustain growth over the next year, predicts Carstensen. From 2010Q3 to 2011Q3, Connecticut RPI grew from $177.8 billion to $182.9 billion or 2.9 percent.
Overall, this Outlook sees Connecticut enjoying growth above the national pattern through the end of this year. Even more impressive, the forecast maintains the importance of the major biomedical initiatives in Farmington. Says Carstensen: “Clearly, these strategic public investments promise to deliver both strong short-run benefits and create the foundation for sustained long-term growth.”
