New CCEA Report - March 2009

     November 20, 2009:    Without a strong, sustained national recovery—which is not clearly in view yet—this UConn/CCEA Outlook sees Connecticut continuing to lose jobs for the next two years, through the end of the forecast period. In a more optimistic scenario, assuming the strong national recovery of the last quarter continues or another six months, Connecticut will soon begin to see modest job growth. Even then, the state recovers barely half of its job loses—only to see employment begin to contract from the middle of 2011. Equally important, even in this optimistic scenario, total state output, by the end of 2011, still falls short of its previous high by $100 million, arguing that the state’s fiscal crisis may persist for years.

Neither scenario for which this UConn/CCEA Outlook offers a forecast incorporates the likely consequences of the combined impact of addressing the nearly $1 billion deficit in the current state budget or the dramatic reduction in capital projects. A reduction in state expenditures by the implied total approaching $1.7 billion would translate into the loss of an additional 25,000 to 30,000 jobs, dragging overall economic activity down from forecasted levels.

A second major issue compounds the impact of the Great Recession: over the last twenty years, Connecticut has seen perhaps the poorest job creation among all fifty states. And in the last decade, most job growth came in health care, accommodation and food services, education, and government (especially local government). A broader perspective gives little hope that Connecticut will see the restoration of growth in jobs—let alone high-wage jobs--given current olicy and economic development initiatives.     

Read the Full Report.

See prevous reports in this Connecticut Quarterly Forecasts series.