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 11 th of 50 states and 1 st in Northeast in employment growth. NH has the 6 th highest per capita income in the US (2003)

NH’s Overall Economic Resiliency: Total employment change and ranks STNAME01--04Rank01--02Rank02--04Rank03--04Rank Total Employment US 1.0%-0.4%1.4%1.6% COCOLORADO-0.6%44-0.9%440.4%411.4%22 MAMASSACHUSETTS-3.2%50-1.5%50-1.7%490.1%47 NHNEW HAMPSHIRE1.8%20-0.7%412.5%131.9%15

High Tech..1990s boom followed by bust and forecast of moderate growth. NH (in green) had greatest percent decline but “recovering” better than Mass

Concentration in manufacturing within high technology in NH compared to US average contributed to pronounced decline

High Technology Resiliency

NH’s Tech Recovery, compared to Mass and Colorado

New Hampshire has several inter-related strengths to sustain a high per capita income and resilient economy

High positive correlation between high tech employment concentration and per capita income across the 50 US states.. NH in top tier

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

Also very strong correlation between education and income and high tech concentration in NH and bordering counties Educational advantage is the key to economic advantage

Forecast: New Hampshire in the New England Regional Economy

New England and NH Economic Outlook Summary yNew England region in recovery yBut recovery has been slow compared to previous recoveries and has lagged US recovery mainly because of weak Mass economy yForecasted growth rates well below late 1990s levels yNH, once again, expected to have highest growth in employment in the region.. Most resilient economy in region yIn NH..Professional & Business Services, Leisure & Hospitality and Health & Education Services expected to grow at highest rates

New England Forecast.. moderated 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

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 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

Forecast: Regional Employment recovery from early 2000s recession …New England region (in green) has lagged behind the US

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

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

NH Summary: Average Annual Growth ; 98-03; Recovery from early 2000s recession, moderate growth compared to mid-1990s

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

Median Home Prices: Home price increases moderate as interest rates rise..annual increases down from double-digit annual

New England and NH Looking Forward yKey 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?

Rockingham County Economy and Industry Clusters: Main Themes y(1) Leading Industries.. –Employment levels, relative concentration, growth –Average Wages –Composite Measures y(2) Occupational growth areas y(3) Role of demographics and “creative class”

Rockingham detailed industries rank ordered by percentage of total county employment…

Rockingham Industries ranked by growth at end of boom period, 98-01

Industries Ranked By Average Wages… 2001

Top thirty leading industries in Rockingham and example of data used in analysis.

Top Growing Occupations in Rockingham County

Top Occupations by new employment According to NH Dept Employment Security

Top Occupations by total openings 2000 to 2010 According to NH Dept Employment Security

The Creative Class in Rockingham

Looking Forward yRockingham is one the hubs of high technology industries in New Hampshire and is well positioned to lead the state in economic growth yDevelop marketing/outreach directed at entrepreneurs and business involved in emerging technologies and related industries. Selling points… –Access to strong regional market and assets (greater Boston area) –Use quality of life as an attraction to skilled workers and entrepreneurs and to further develop the creative economy yEnhance relationships between business, K-12 and the University of New Hampshire and other local colleges –Use cutting edge research for new business development –Strengthen the relationship between public education k-12 and the university yContinue to diversify economy and manufacturing base…moving concentration more to high-value added new products and services, such as computer and database system design for health care, hospitality and finance industries