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Can We Afford the Future? The Fiscal and Economic Outlook for New England

Can We Afford the Future? The Fiscal and Economic Outlook for New England. Spring Economic Outlook Conference May 21, 2009. New England Outlook. Ross Gittell VP and Forecast Manager New England Economic Partnership James R Carter Professor University of New Hampshire.

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Can We Afford the Future? The Fiscal and Economic Outlook for New England

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  1. Can We Afford the Future?The Fiscal and Economic Outlook for New England Spring Economic Outlook Conference May 21, 2009

  2. New England Outlook Ross Gittell VP and Forecast Manager New England Economic Partnership James R Carter Professor University of New Hampshire

  3. A significant recession with challenges over the full forecast period Declining employment in New England since early 2008. Region is expected to lose almost 450,000 jobs by the end of the employment decline in 2010, or 6.3% of employment. New England decline expected to be similar to US decline (5.7%) in percentage terms. NH only state in region expected to have below US average decline (4.4%). RI expected to have steepest decline, 7.8%. Most pronounced declines expected in construction, finance, trade and manufacturing. Unemployment rate anticipated to rise to highest rate since 1992 in New England -- to 10+% US and 9.2% in NE.

  4. Strong influence of the US Outlook on the New England Economic Outlook The macroeconomic drivers for NEEP’s Spring 2009 forecast for New England are from Moody’s Economy.com’s “Deeper Recession, Weaker Recovery” (March 2009) forecast scenario that predicts a decline in employment through 2010-Q2 in US. In NEEP’s view there are still significant weaknesses and vulnerabilities in the national and regional economies. Individual and Household employment prospects and wealth have taken “big hits” and HHs are under stress…. it will take some time for households, consumer spending and the housing market to recover. Also banking and financing markets continue to have significant challenges to work through….

  5. Comparing US Marco Forecasts April 2009 – US Employment decline 5.7M and Unemployment rate 8.9%

  6. Recession forecast for New England “between” last two recessions The forecast for the region is for greater percentage decline in employment than in the early 2000s recession. But for less of a decline than in the early 1990s recession when the region lost nearly 10 percent of its employment base. Compared to US in the last two recessions … the percentage decline in employment in New England was significantly more pronounced than the national average … this is not expected to be happen this recession… this recession is impacting all regions of the nation…

  7. Gross Product Annualized % Change. Expected to turn positive the last quarter 2009 (US), first quarter 2010 (NE)

  8. Total Employment annualized percentage decline from early 2008 to mid-2010 Most pronounced decline expected to be in first 3 Q’s of 2009

  9. Across New England Forecast % Decline Total Employment Peak-to-Trough

  10. Forecast of Job Losses Peak-to-Trough (1,000s) during Recession, US & NE

  11. Industry Sectors Peak-to-Trough Employment Percent Declines US & NE

  12. Forecast of Peak Unemployment RateRI only state expected to have rate above US peak

  13. Unemployment: Low Before Recession, March 2009 and the Forecasted Peak (2/3of way to peak)

  14. Housing Prices Peak-to-TroughPercentage decline… NE rate of decline below US average

  15. Summary: Economic Outlook Global and US economy dominate the New England economic outlook. This year, 2009, will be a very challenging year with slow “recovery” expected starting in 2010. NH only state in New England expected to have below US average percent decline in employment. There are currently signs of the economy improving mainly in terms of the rates of decline moderating. … yet only about 2/3rds of the way to expected total job losses and unemployment rise … The worst may be over.. as we “move” from Great Recession to a “bad economy” in New England.

  16. Can We Afford the Future? Health Care in New England In health care there is in many respects a perfect storm forming. The demand for health services is continuing to grow -- exacerbated by the physical and emotional problems associated with households and individuals dealing with job losses and poor financial prospects. The ability of patients to pay has declined significantly -- particularly among those losing their jobs and/or health benefits and those who have experienced steep declines in wealth. The increasing demand for health care along with the decreased ability of those requiring health services to pay puts significant pressure on health care providers to reduce the costs of provision and the quality of services provided. And the “bottom line” of health care -- people’s health and quality of life – can suffer.

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