1. New Hampshire Economic Outlook SCORE June 12, 2007 Ross Gittell Professor, Whittemore School of Business & Economics University of New Hampshire

2. The New Hampshire Economy New Hampshire has relatively..New Hampshire has relatively.. –high per capita income and educational attainment -- both in top ten nationally –Low poverty rates -- the lowest in the nation –Low income disparity -- third lowest in the country –Strong economy compared to other states in Northeast -- strongest performer in New England –High social capital – among the top ranked

3. New England Economic Partnership Spring 2007 Forecast Gross State Product Average Annual Growth: 2006-11 NH leading region in growth, only state in region expected to grow at US average

4. Total Employment average annual growth forecast. New Hampshire (in green) leading region in growth. Only state in the region expected to grow at the US ave, Maine & VT lowest growth

5. NH compared to New England (in red) average annual forecasted growth 2006-11. Fastest growing sectors… Professional & Business Services and Education & Health and Leisure & Hospitality

6. NH selected period growth rate by industry comparisons… “Moderate” growth projected (in green) …

7. NH Leading Industries Employment 2006 # of Establishment Avg Wage Q3 06 Industry Share of Employ. relative to US Employment chg 02-06 Avg Wage chg 02-06 Electronic markets and agents and brokers8,3303,98921,8553.314.4%4.7% Electronic instrument manufacturing7,9368619,2355.614.0%5.4% General medical and surgical hospitals24,4513011,2541.813.5%7.4% Insurance carriers8,54515017,5922.1-3.4%26.1% Offices of physicians11,22776818,5841.610.1%3.3% Management of companies and enterprises7,50633217,8741.318.4%2.1% Full-service restaurants26,1651,1704,0671.84.7%-2.1% Building material and supplies dealers9,4674578,0092.522.2%-3.2% Colleges and universities9,2545412,3602.93.8%2.5% Services to buildings and dwellings7,9921,2755,9661.38.5%5.3%

8. Wholesale Electronic Markets and Agents and Brokers Arrange for the sale of goods owned by others, generally on a fee or commission basis. They act on behalf of the buyers and sellers of goods.Arrange for the sale of goods owned by others, generally on a fee or commission basis. They act on behalf of the buyers and sellers of goods. This sector includes electronic markets that facilitate wholesale trade.This sector includes electronic markets that facilitate wholesale trade. Mass and CT also have above the US average employment concentration in this industry… NH has the highest concentration at twice the US averageMass and CT also have above the US average employment concentration in this industry… NH has the highest concentration at twice the US average NH average wages in the industry are higher than MA and well above the US averageNH average wages in the industry are higher than MA and well above the US average

9. NH and other states in the New England region have similar distribution of employment among establishments of various sizes as the nation. Highest concentration of employment is in establishments with 10-99 (44% in NH). VT has the highest concentration in establishments with <10 employees (20%), NH 16%

10. The 1992-2000 employment growth in NH and New England concentrated in establishments with employment of 100-999 (43% in NH) and 10-99 (32%). Smallest and the largest establishments had the least growth. In US largest establishments employment growth was greater than in all of the NE states

11. Early 2000s employment decline (also) concentrated in establishments with employment of 100-999. Smaller establishments (less than 100 employees) appeared to be relatively resilient as a group.

12. Most recent..employment growth by establishment size 2003 to 2005 NH total employment increased 4.1 percent, compared to New England.8% and US 2.6%.NH total employment increased 4.1 percent, compared to New England.8% and US 2.6%. Growth in NH highest in firms sized 250-499 (10.4 percent), 100-249 (6.9) and 1000+ (5.6).Growth in NH highest in firms sized 250-499 (10.4 percent), 100-249 (6.9) and 1000+ (5.6). Smaller firms had below NH average growth except for those with 10-19 employees (4.2 percent growth 2003-05).Smaller firms had below NH average growth except for those with 10-19 employees (4.2 percent growth 2003-05). In New England and US the highest growth in firms sized 500- 999 and least employment growth in smallest firms… indicative of difficulty in current economy of increasing employment in small firms…In New England and US the highest growth in firms sized 500- 999 and least employment growth in smallest firms… indicative of difficulty in current economy of increasing employment in small firms…

13. 2006 “Entrepreneurial Nation and State (??)”… A national assessment of entrepreneurial activity by the Ewing Marion Kauffman Foundation shows that in 206 in the nation:A national assessment of entrepreneurial activity by the Ewing Marion Kauffman Foundation shows that in 206 in the nation: –Nationally there were 465,000 people creating new business each month, a rate of 0.29% of the total adult population –Other highlights include: immigrants outpace native-born Americans (0.37 percent to 0.27 percent)immigrants outpace native-born Americans (0.37 percent to 0.27 percent) States with highest rates of entrepreneurship were Montana (.6), Mississippi (.52) and Georgia (.44), OK (.43) and Maine (.42).States with highest rates of entrepreneurship were Montana (.6), Mississippi (.52) and Georgia (.44), OK (.43) and Maine (.42). Lowest rates in Michigan (.16), PA (.17) and SC (.18).Lowest rates in Michigan (.16), PA (.17) and SC (.18). New Hampshire below the national average in entrepreneurial activity at.21% of adult population each month… and in decline from.28 (and at the national average) in 2005New Hampshire below the national average in entrepreneurial activity at.21% of adult population each month… and in decline from.28 (and at the national average) in 2005 Massachusetts at.35 up from.23 in 2005.Massachusetts at.35 up from.23 in 2005.

14. Recent firm birth and death data also suggests that the region is not very entrepreneurial. The New England States tend to rank in the lower half of 50 states in firm births and deaths and net firms per existing establishment New England States Rankings (of 50 states from high to low) 2004 State Firm Births per establish. 2004 FB/Establish. Rank Firm termination per establish 2004 FT/Establish. Rank Net Firms per establish. 2004 NF/Establish. Connecticut420.08300.1041-0.018 Maine380.09310.1038-0.014 Massachusetts360.09370.1029-0.007 New Hampshire 230.10170.1137-0.011 Rhode Island 170.11110.1233-0.009 Vermont320.10270.1135-0.011 Highest State Nevada0.17Washington0.22Colorado0.09 Lowest State South Dakota 0.06Colorado0.06Washington-0.07

15. Some Economic concerns looking forward The recent slowing of overall economic and employment growth in the New England region and New HampshireThe recent slowing of overall economic and employment growth in the New England region and New Hampshire Aging of the population, slow growth in total population and decline of young adult population in New England and the stateAging of the population, slow growth in total population and decline of young adult population in New England and the state Increased income disparity …more pronounced increase in the NE region and NH than the national averageIncreased income disparity …more pronounced increase in the NE region and NH than the national average Geographic income disparity within the state.. Only 2 (of 10 counties) have above NH average per capita income and educational attainmentGeographic income disparity within the state.. Only 2 (of 10 counties) have above NH average per capita income and educational attainment