The Connecticut Economic Outlook<\/a>,<\/em> \u201cNavigating Tumultuous Waters,\u201d from the Connecticut Center for Economic Analysis (CCEA), housed in UConn\u2019s College of Liberal Arts and Sciences.<\/p>\nReleased every three months by the CCEA\u2019s Economic Analysis Group, this quarterly issue laments: \u201cThe financial chaos of this summer has sucked confidence out of the equity markets. Virtually all economic forecasts have been trimmed back. Realistically, Connecticut will not see the improvements it might have seen.\u201d<\/p>\n
Economics professor Fred Carstensen, CCEA\u2019s director, notes that recently released data from the U.S. Bureau of Economic Analysis shows that Connecticut\u2019s real gross domestic product in 2010 grew by more than 3 percent, ahead of the national rate by 7 basis points. Had that trend continued in 2011, the CCEA forecast would have anticipated relatively robust growth from $224 billion in 2011 to $241 billion in 2013, with gains of 55,000 new jobs, he says.<\/p>\n
But the financial tumult in American financial markets, the loss not simply of federal stimulus but a contraction of federal expenditures, the continuing crisis in sovereign debts in the European Union, and the apparent weakening of the American economy, \u201cargue for a more sanguine projection for the state,\u201d he says.<\/p>\n
Taking account of these hard realities, the CCEA economic team developed a more realistic outlook for the state\u2019s economic performance, using an array of critical economic indicators that included forecasting models for employment and the state\u2019s real gross domestic product.<\/p>\n
They also modified the forecast to take account of both the recent labor agreement with state workers, freezing state salaries and significantly increasing employee contributions to the cost of fringe benefits; increased taxes; and the major capital projects to which the State has now committed itself.<\/p>\n
\u201cThese developments have opposite effects,\u201d explains Carstensen. \u201cThe labor agreement reduces economic growth; the capital projects accelerate it. The net result is a modest loss in output and employment compared to the base case, but significantly better than a pure budget cut, which would likely have put Connecticut back into recession.\u201d<\/p>\n
Yet even set against the uncertain national economic trends and the debates over the federal deficit, the Connecticut economy has room to grow, he says.<\/p>\n
CCEA developed estimates to project Connecticut\u2019s real gross domestic product from the first half of 2011, based primarily on documented growth in total real personal income. CCEA\u2019s approach, prior to adjusting for state policy initiatives, results in Connecticut sustaining a growth rate of 3.3 percent for most of 2011, before falling to 1.7 percent through 2012.<\/p>\n
Modest though these results are, subsequently using models to adjust its outlook to account for curtailed benefits to government employees, increased taxes, and major capital projects approved in June, CCEA\u2019s forecast projects employment to rise by 20,000 above current levels, although more jobs might have been created had conditions not shifted so precipitously.<\/p>\n
In addition, this edition of Outlook <\/em>outlines four proposals that CCEA economists believe would put the state on a strong fiscal and economic path, including investing in more efficient lighting, adoption of EVs, driving growth in biosciences, and unleashing the accumulated tax credits. They say these could both help improve the economy in the short run, and help control public sector expenditure in the longer term and reduce private sector costs.<\/p>\n\u201cIf these ideas were adopted,\u201d says Carstensen, \u201cwe believe it could help accelerate Connecticut\u2019s economic recovery, generate additional jobs, and strengthen its competitive position.\u201d<\/p>\n
Carstensen adds that although state policies have a modest dampening effect on the economy, they are benign compared to the alternative \u2013 a massive budget reduction. Even with the short-term pain associated with the initiatives to rebalance the state\u2019s budget, he says, CCEA projects that the Connecticut economy\u2019s real output and employment will continue to grow over the next two years.<\/p>\n
The new forecast is posted on the CCEA website<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"In light of this summer\u2019s financial turmoil, UConn economists now project only modest growth in the state\u2019s economy.<\/p>\n","protected":false},"author":15,"featured_media":45902,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_crdt_document":"","wds_primary_category":0,"wds_primary_series":0,"wds_primary_attribution":0,"footnotes":""},"categories":[1],"tags":[],"magazine-issues":[],"coauthors":[46],"class_list":["post-45887","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-05-03 05:41:55","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts\/45887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/comments?post=45887"}],"version-history":[{"count":5,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts\/45887\/revisions"}],"predecessor-version":[{"id":45909,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts\/45887\/revisions\/45909"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/media\/45902"}],"wp:attachment":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/media?parent=45887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/categories?post=45887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/tags?post=45887"},{"taxonomy":"magazine-issue","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/magazine-issues?post=45887"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/coauthors?post=45887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}