The Connecticut Economy - CRCOG · •As of July 2015, Connecticut has regained 102,000 jobs, or 85.7% of the total jobs lost during the recession •Connecticut’s private sector

The Connecticut Economy

Presented to the Connecticut Tax Study PanelSeptember 16, 2015

Manisha Srivastava, Budget AnalystCT Office of Policy and Management

Outline

• Population Summary and Trends

• Employment Profile: 1950 - 2010

• Economic Prosperity of the 1980’s

• The Era of Slow Growth

• Pre and Post the Great Recession• Employment• Gross State Product• Connecticut compared to the United States

• Connecticut’s Exports and Defense Industry

• Regional Analysis 2

Population Summary

3Source: Census Bureau State & Local QuickFacts

Population2014 3,596,6772013 3,599,341

Race and Ethnicity^White 81.6%Black or African American 11.3%Asian 4.3%American Indian, Native Hawaiian and Other Pacific Islander 0.6%Hispanic or Latino 14.7%

Foreign born persons* 13.60%Language other than English spoken at home* 21.50%

Households*Households 1,355,849Persons per household 2.55Median household income $69,461 Persons below poverty level 10.2%

^ 2013

* 2009 - 2013

Population Trends

0%

5%

10%

15%

20%

25%

30%

1930 1940 1950 1960 1970 1980 1990 2000 2010

Po

pu

lati

on

Gro

wth

United States Connecticut

Source: 2015 Economic Report of the Governor

Population growth in Connecticut has slowed compared to the nation since the 1970’s

4

Population Trends

0%

5%

10%

15%

20%

25%

30%

1930 1940 1950 1960 1970 1980 1990 2000 2010

Po

pu

lati

on

Gro

wth

New England Connecticut

Source: 2015 Economic Report of the Governor

Connecticut’s population growth has been similar to New England over the last few decades

5

Population Trends

Share of Population by Age Group

Connecticut United States

Age Groups 1994 2004 2014 1994 2004 2014

0 thru 4 6.9% 6.1% 5.3% 7.2% 6.8% 6.2%

5 thru 14 13.1% 13.9% 12.2% 14.3% 13.9% 12.9%

15 thru 24 13.2% 12.8% 13.7% 14.5% 14.3% 13.8%

25 thru 34 15.9% 11.9% 12.3% 16.0% 13.4% 13.6%

35 thru 44 16.1% 15.9% 12.3% 15.5% 14.9% 12.7%

45 thru 54 12.1% 15.1% 15.1% 11.4% 14.2% 13.6%

55 thru 64 9.0% 10.6% 13.5% 8.5% 10.1% 12.6%

65 & Older 13.6% 13.6% 15.6% 12.5% 12.4% 14.6%

Source: IHS6

Population Trends


Percentage Points difference between Connecticut and the United States

Age Groups 1994 2004 2014

0 thru 4 -0.4 -0.6 -1.0

5 thru 14 -1.2 -0.1 -0.7

15 thru 24 -1.2 -1.5 -0.1

25 thru 34 -0.1 -1.5 -1.3

35 thru 44 0.7 1.0 -0.4

45 thru 54 0.7 0.9 1.5

55 thru 64 0.5 0.6 1.0

65 & Older 1.2 1.2 1.0

Source: IHS

Connecticut is older compared to the United States

7

Population Trends


Percentage Points difference between Connecticut and New England

Age Groups 1994 2004 2014

0 thru 4 0.1 0.2 0.0

5 thru 14 0.0 0.6 0.7

15 thru 24 -0.8 -0.8 -0.1

25 thru 34 -0.3 -0.5 -0.5

35 thru 44 0.1 0.2 0.1

45 thru 54 0.4 0.0 0.3

55 thru 64 0.3 0.0 -0.2

65 & Older 0.2 0.2 -0.2

Source: IHS

Compared to New England, Connecticut has a higher share of 5-14 year olds a smaller share of 25-34 year olds

8

Population Trends

-30%

-20%

-10%

0%

10%

20%

30%

40%

Connecticut Population Growth by Age Group

2004 2014Source: IHS

Some of the trends exhibited in Connecticut are caused by natural demographic changes

9

Employment Profile: 1950 - 2010

10

Total non-farm employment growth in Connecticut has slowed compared to the nation since the 1970’s

Total Non-Farm Employment (in Thousands)

1950 1960 1970 1980 1990 2000 2010

Connecticut

Total 766.1 915.4 1,197.5 1,426.8 1,623.5 1,693.1 1,608.0

Growth 26.7% 19.5% 30.8% 19.1% 13.8% 4.3% -5.0%

United States

Total 45,197 54,189 70,880 90,406 109,403 131,720 130,275

Growth 39.7% 19.9% 30.8% 27.5% 21.0% 20.4% -1.1%

Source: Bureau of Labor Statistics

Note: Not Seasonally Adjusted, based on the Standard Industrial Classification system

Employment Profile: 1950 - 2010

11

0%

20%

40%

60%

80%

100%

1950 1960 1970 1980 1990 2000 2010

Connecticut’s Industry Share of Total Employment

Total Government

Services

Finance, Insurance, and

Real Estate

Trade

Transportation And

Public Utilities

Manufacturing

Construction & Mining


Note: Not Seasonally Adjusted, based on the Standard Industrial Classification system

Employment Profile: CT versus the US

12

ManufacturingFinance, Insurance, And

Real Estate Government

1950 2010 1950 2010 1950 2010

Connecticut 49.6% 12.2% 4.8% 8.4% 8.6% 15.2%

United States 33.7% 10.9% 4.2% 5.9% 13.3% 17.3%

Manufacturing has fallen dramatically, while Finance and Government has grown stronger than the US


Note: Not Seasonally Adjusted, based on the Standard Industrial Classification (SIC) system

Note: Percent of total non-farm employment

Economic Indicators: GSP and PI

Per Investopedia.com:

• Gross Domestic Product (GDP) and Gross State Product (GSP):• The monetary value of all the finished goods and services produced within a

country's borders in a specific time period• GDP = private and public consumption + government outlays + investments +

exports - imports• Put simply, GDP is a broad measurement of a nation’s overall economic activity

• Personal Income (PI):• Total compensation received by an individual• Personal income = salaries + wages and bonuses received from employment or

self-employment + dividends and distributions received from investments + rental receipts from real estate investments + profit-sharing from a business

• Capital Gains is not included in Personal Income• Personal income is generally computed on a pre-tax basis.

13Source: Investopedia.com

Economic Prosperity of the 1980’s

14

-$15,000

-$10,000

-$5,000

$0

$5,000

$10,000

$15,000

$20,000

-30%

-20%

-10%

0%

10%

20%

30%

40%

1961-1970 1970-1980 1980-1990 1990-2000 2000-2010

$ D

iffe

ren

ce -

Per

Cap

ita

GD

P /

PI

% D

iffe

ren

ce -

GD

P /

PI

Gro

wth

Gross Domestic Product and Personal Income

Percentage Points difference between CT and the US

Difference in GDP Growth Difference in PI Growth

Difference in Per Capita GDP Difference in Per Capita PI

Source: IHS, Bureau of Economic Analysis

Economic Prosperity of the 1980’s

• Connecticut gained 234,100 jobs, or 16.2% of employment between July 1981 to February 1989.

• Employment change by sector:• Services 60%• Trade 30%• Finance, Insurance, and Real Estate 20%• Manufacturing -35%

• GDP change by sector:• Finance, Insurance, and Real Estate 30%• Services 22%• Trade 14%• Manufacturing 13%

15Source: Bureau of Labor Statistics, Bureau of Economic Analysis

The Era of Slow Growth

Source: Moody’s Economy.com and the Bureau of Labor Statistics

500

700

900

1,100

1,300

1,500

1,700

1,900

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

Em

plo

ym

ent

(in

Th

ou

san

ds)

Connecticut Total Nonfarm Employment

16

The Era of Relative Slow Growth: 1992-2015

Connecticut and New York grew at the same pace out of the early 1990’s recession; CT has since fallen behind

Source: Bureau of Labor Statistics17

111%

124%

120%

116%

95

100

105

110

115

120

12519

92

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2007

2008

2009

2010

2011

2012

2013

2014

Dec

emb

er 1

992

= 10

0

Connecticut Massachusetts New York New Jersey

Employment Indexed to 1992 for CT, MA, NY, and NJ

The Era of Relative Slow Growth: 1970-2014

A longer term view shows Connecticut’s employment growth outpaces New York, but falls short of NJ and MA

Source: IHS18

139%

127%

152%

90

100

110

120

130

140

150

16019

70

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

1970

= 1

00

Connecticut Massachusetts New York New Jersey

Employment Indexed to 1970 for CT, MA, NY, and NJ

The Great Recession

• The Great Recession lasted from March 2008 to February 2010 in Connecticut

• Connecticut lost 119,000 jobs, or 6.9% of employment

• As of July 2015, Connecticut has regained 102,000 jobs, or 85.7% of the total jobs lost during the recession

• Connecticut’s private sector has replenished 108,200 jobs, or 97.0% of the 111,600 private sector jobs lost during the recession

• The rate of job growth has picked up in the last year, with over 30,000 jobs created since July 2014

Source: Connecticut Department of Labor and the Bureau of Labor Statistics19

The Great Recession

• The United States lost 8.7 million jobs, or 6.3% of employment during the Great Recession. As of April 2014, the US had recovered the number of jobs lost from the recession.

• Connecticut’s unemployment rate peaked at 9.2% during the recession

• As of July 2015, Connecticut’s unemployment rate is 5.4%

• The United States reached 10% unemployment during the recession; as of July 2015 the nation’s unemployment rate was 5.3%

• As of January 2015, the number of residents employed in CT surpassed its pre-recession peak, and at 1,809,191 is currently at its highest level ever

Source: Connecticut Department of Labor and the Bureau of Labor Statistics20

The Great Recession: Employment

-$180

-$120

-$60

$0

$60

$120

$180

-30

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Connecticut's Jobs: Recession, and Recovery, and Average Annual Wage

Recession Recovery Average Wage

Industries with the lowest average wage are leading Connecticut’s employment recovery from the recession


Note: Recession (Mar 2008-Feb 2010), Recovery (Feb 2010-May 2015), and 2014 Average Annual Wage

Pre/Post the Great Recession: Employment

Construction

Manufacturing

Wholesale

Trade

Retail Trade

Transportation &

Utilities

Information

Finance &

Insurance

Real Estate

Prof., Sci., & Tech.

Services

Mgmt. of Companies

Admin & Support

Educational Services

Health Care Services

Leisure &

Hospitality

Other Services

Government

-10%

-5%

0%

5%

10%

15%

20%

25%

-10% -5% 0% 5% 10% 15% 20% 25%

Gro

wth

Pre

-Rec

essi

on

(S

ep. 2

003

-M

ar. 2

008)

Growth Post-Recession (Feb. 2010 - May 2015)

Connecticut Employment Growth by Industry


Note: Size of bubble = May 2015 share of employment


Construction

ManufacturingRetail Trade

Prof., Sci., & Tech.

Services

Mgmt. of Companies

Admin & Support

Leisure &

Hospitality

-10%

-5%

0%

5%

10%

15%

20%

25%

-10% -5% 0% 5% 10% 15% 20% 25%

Gro

wth

Pre

-Rec

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(S

ep. 2

003

-M

ar. 2

008)


Industries Growing Faster (or Shrinking Slower) Post-Recession




Wholesale

Trade

Finance &

Insurance

Educational Services

Government

-10%

-5%

0%

5%

10%

15%

20%

25%

-10% -5% 0% 5% 10% 15% 20% 25%

Gro

wth

Pre

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(S

ep. 2

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Industries Growing Slower Post-Recession



Connecticut Employment (2014)

25Source: Bureau of Labor Statistics

Construction and

Mining, 3.4%Manufacturing, 9.6%

Trade,

Transportation, and

Utilities, 18.1%

Information, 1.9%

Financial Activities,

7.7%

Professional and Business

Services, 12.7%

Education and

Health Services,

19.5%

Other Services, 3.8%

Leisure and

Hospitality, 9.1%

Government, 14.3%

Note: Connecticut 2014 total non-farm employment = 1,665,700

Connecticut Real GSP (2014)

Source: IHS26

Note: Connecticut 2014 Real GSP = $232,620 Million (chained 2009 $)

Construction and

Mining, 3.1%

Manufacturing,

10.8%

Transportation,

Trade, & Utilities,

14.5%

Information, 5.4%

Financial Activities,

29.0%

Professional &

Business Services,

12.5%

Education & Health

Services, 9.8%

Other Services, 1.9%

Leisure &

Hospitality, 2.8%

Government, 10.2%

Pre/Post the Great Recession: GSP & PI

Connecticut’s Real GSP and PI growth has slowed from about 16% pre-recession to 1% and 7%, respectively

Source: IHS27

Pre-Recession Post-RecessionConnecticut Real GSP (Millions of 2009 $) 2003 2007 2010 2014Total $211,900 $245,764 $230,268 $232,620

Change $33,864 $2,352Growth 16.0% 1.0%

Connecticut Real PI (Millions of 2009 $) 2003 2007 2010 2014Total $157,606 $183,065 $178,044 $190,557

Change $25,460 $12,514Growth 16.2% 7.0%

United States 2003 2007 2010 2014Real GDP Growth 12.1% 8.0%Real PI Growth 14.0% 9.7%

Note: Real indicates adjusted for inflation, here in 2009 constant dollars

Pre/Post the Great Recession: GSP

There has been a shift in the industries driving GSP from pre-recession to post-recession

28Source: IHS

Pre-Recession Post-RecessionReal GSP (Millions of 2009 $) 2003 - 2007 2010 - 2014Manufacturing $11,101 -$3,371Finance & Insurance $7,816 -$2,604Government $1,336 -$274Other Services $264 -$25Construction and Mining -$50 $27Educational Services $210 $155Wholesale Trade $2,919 $213Transportation & Utilities $1,459 $438Administrative & Support $1,139 $555Health Care $1,211 $636Leisure & Hospitality $77 $691Retail Trade -$525 $775Real Estate $2,647 $856Prof., Sci., and Tech. Services $50 $1,185Information $3,741 $1,512Management of Companies -$394 $1,865

Total Real GSP Change $33,864 $2,352Note: Industries do not add to total

Post Recession – CT versus the US

-10%

0%

10%

20%

30%

Employment Gains by Industry Post-Recession (Feb 2010-May 2015)


Connecticut’s employment growth by industry is similar to the nation, except in a few key industries



Unlike Connecticut, the nation is growing in employment and GDP from Manufacturing and Finance & Insurance

Source: Bureau of Labor Statistics, Bureau of Economic Analysis

-15%

-10%

-5%

0%

5%

10%

15%

Emp. GDP Emp. GDP

Manufacturing Finance & Insurance

Industries Lagging the US Post-Recession


30Note: Employment (February 2010 – May 2015) and GDP (2010 - 2014)


Mgmt. of Companies in CT leads the nation by 1.5 and 6 percentage points, respectively, in emp. and GDP growth

Source: Bureau of Labor Statistics, Bureau of Economic Analysis31

0%

5%

10%

15%

20%

25%

30%

35%

40%

Emp. GDP Emp. GDP Emp. GDP

Mgmt. of Companies Leisure and Hospitality Health Care

(Select) Industries Leading the US Post-Recession


Note: Employment (February 2010 – May 2015) and GDP (2010 - 2014)

Connecticut’s Leading Export Markets (2014)

32

France, 13.9%

Canada, 11.9%

Germany, 10.7%

Mexico, 8.0%

United Arab

Emirates, 7.2%China, 5.7%

United

Kingdom, 4.5%

Republic Of

Korea, 4.2%

All Other, 33.9%

Source: WISERTrade

Note: Connecticut 2014 total exports = $15.9 billion

Connecticut’s Export Industry Leaders (2014)

33Note: Connecticut 2014 total exports = $15.9 billion;

Source: WISERTrade

Transportation

Equipment, 45.9%

Machinery, Except

Electrical, 13.0%

Computer And

Electronic Products,

8.0%

Electrical Equipment,

Appliances, And

Component, 6.4%

Chemicals, 6.1%

Fabricated Metal

Products, Nesoi*, 4.6%

Primary Metal

Manufacturing, 4.0%

All Other, 12.1%

* Not Elsewhere Specified or Included

Connecticut’s Defense Industry

34

• In Federal Fiscal Year 2013:

• Connecticut based firms received $10.0 billion in prime contract awards

• These total awards accounted for 3.7% of national total awards

• Connecticut ranked 8th in total defense dollars awarded

• Connecticut ranked 2nd in per capita dollars awarded among the 50 states

• In Fiscal Year 2013, defense contract awards made up 4.8% of Connecticut’s GSP*

Source: United States Department of Defense

* Based on a three year moving average of defense contract awards

Regional Analysis

Connecticut’s population is concentrated in three counties, but the state overall is highly educated and well-off

Source: Census Bureau State & Local QuickFacts35

CT Fairfield HartfordLitch-field

Middle-sex

New Haven

New London

TollandWind-ham

Population^ 3,596.7 945.4 898.0 185.0 164.9 861.3 273.7 151.4 117.0

High School* (%) 89.2 89 88.1 91.3 93.8 88.3 90.5 93 86.8

Bachelors* (%) 36.5 44.8 34.9 36.5 39.1 32.9 31.3 36.9 22.3

Median Household Income* ($)

69,461 82,283 64,967 69,461 76,994 61,996 69,461 80,529 59,333

GSP^ ($M) 253,036 93,502# 86,609 44,165#Brideport Stamford Metropoliatan Statistical Area (MSA)

^ 2014

* 2009 - 2013

In Conclusion

• Connecticut’s population and employment growth slowed compared to the national average during the 1970’s

• Connecticut’s population is older compared to the nation• Connecticut’s economy flourished (based on PI, GSP, and employment growth)

during the 1980’s, but has not matched that level of growth since• Since the end of the recession:

• Manufacturing continues to fall (a trend that started in the late 1960’s)• Connecticut’s powerhouse - Finance & Insurance – has fallen in employment and economic

output

• Similar to the nation, sectors with stronger job growth have tended to be in lower wage sectors• However, the high-wage Management of Companies and Professional, Scientific, and

Technical Services have been growing strongly post-recession

• Connecticut’s rate of job growth has increased with over 30,000 jobs created in the last year, and the number of residents employed is at its highest level ever

36

Documents

The Connecticut Economy - CRCOG · •As of July 2015, Connecticut has regained 102,000 jobs, or 85.7% of the total jobs lost during the recession •Connecticut’s private sector