With talk of interest rate increases by the Fed, the volatility in the stock market and the European economy, and the increasing likelihood that we are headed toward an economic downturn, it is a good time to take stock of NH’s post-recession economy and think about what’s next.
New Hampshire has made up ground lost during the Great Recession. At its peak in August 2008, NH had approximately 653,000 jobs. Over the next two years, the state shed almost 5 percent of that total. By January 2015, the state recovered those lost jobs, and as of April 2016, jobs totaled almost 664,000, 2 percent more than the 2008 peak.
While NH has recovered from the recession, its recovery was not as robust as in Massachusetts or even Vermont. In Northern New England, Massachusetts led the recovery with 6 percent more jobs than it had prior to the Great Recession, followed by Vermont at 3 percent, NH then Maine, which has not yet recovered its lost jobs.
Moreover, the recovery has been uneven across the state. Among the state’s metropolitan areas, Portsmouth is leading NH in its recovery, with 10 percent more jobs than prior to the recession, followed by Manchester (5 percent more) and Dover/Durham (with about 1 percent more). Nashua has not fully recovered all the jobs it lost, nor has the rest of the state, which is mostly rural.
Looking at the change in the number of employees between 2010 and 2014, the county level tells a similar story with growth concentrated in Hillsborough, Merrimack and Rockingham counties, and the remainder of counties, in aggregate, experiencing declines. Grafton (a 9 percent decline), Coos (8 percent) and Cheshire (3 percent) counties shed the most jobs during this period.
This year has seen economic growth in many areas. In October 2015, the late economist Dennis Delay said, “The year 2016 will be a very good year for the New Hampshire economy with strong employment growth, driven by a continued recovery in the housing sector and low energy prices overall.” What actually happened was slightly better than he predicted. Total employment grew 2.4 percent between January and May, which equates to an annualized growth rate of almost 5 percent.
Retail, accommodations, and leisure and hospitality drove this growth, accounting for more than half of the newly created jobs. Construction employment grew strongly as well. After years of declines, manufacturing has begun to grow, but slowly.
What Does All This Mean?
The state’s recovery and growth is uneven, with the more urban areas (especially the Seacoast region) generally faring better than their rural counterparts. Economic growth may be even more concentrated in the state’s urban areas than it was prior to the recession.
From an economic development perspective, this raises interesting and difficult questions for policy makers. We have always had a strong focus on economic development in the North Country, which has suffered with the decline of extraction-based wood industries across the United States. Policy makers will continue to focus on helping those communities transition to different, and likely smaller, economies.
But with economic vitality currently concentrated in our urban areas, should we focus our economic development initiatives where we are likely to get the biggest return? Do we want to focus on accelerating, or at least maintaining, growth through economic initiatives that are focused on cities? And what policy levers do policy makers have at their disposal?
What successful short-term strategies are there for dealing with the well-documented workforce shortages? Will increasing the quality of schools in our cities help ensure that 30-somethings with children stay or come to NH? Can investment in our university system solve this problem? Should we be encouraging more development of housing that interest millennials?
How can the private and public sectors help support capital development that could be invested in NH and businesses?
In the end, a multifaceted approach to economic development will be needed, one which recognizes the new landscape of economic activity in NH.
Steve Norton is executive director of the NH Center for Public Policy Studies, a nonprofit, non-partisan organization in Concord. Norton can be reached at
snorton@nhpolicy.org.
Current Issue - April 2024