Hartford economy faces challenging times in 2008 and 2009
John Clinkard
Hartford economy faces challenging times in 2008 and 2009
Against the headwind of tighter credit conditions, an erosion of consumer confidence and a major drop in new residential construction, the Hartford economy continued to add jobs through the first quarter of 2008, in both goods- and service-producing industries.
Among goods-producing industries, employment increased in two sectors:
- Construction employment rose +2.0% year over year, despite a 45% year-over-year decline in new single and multiple housing starts.
- Manufacturing employment also increased, helped by a moderate increase in sales, as reported by the latest Federal Reserve Beige Book for the First District.
Among service-producing industries, employment increased in the following sectors:
- Education and health services: +3.8%;
- Leisure and hospitality: +3.6%;
- Information services: +2.5%;
- Professional and business services: +2.0%;
- Transportation and trade services: +1.1%; and
- Government services: +0.9%.
Real estate and financial services continued to shed jobs (-1%) in March, due to persistent weakness in the sector.
Looking forward, despite its solid base of financial services, the Hartford economy is likely to experience turbulence in the near term, due to the after-effects of the sub-prime mortgage crisis.
This view is reinforced by the increased uncertainty regarding the future of planned construction projects. For example, New York developer H.B. Nitkin has decided to drop the housing component of its high-profile Front Street Redevelopment Project.
Although the most recent Manpower survey of central Connecticut indicated that the hiring climate remains generally positive, the outlook for office demand is weak. According to Property + Portfolio Research (PPR), increasing commercial vacancy rates, combined with slowing growth of office-based employment, is likely to depress new office construction over the near term.
