5Q: Leonard Lardaro

 / PBN PHOTO/MICHAEL SALERNO
/ PBN PHOTO/MICHAEL SALERNO

1 Your evaluation of economic momentum in Rhode Island reflects sustained progress. What influences that progress?

My assessment of our improving momentum is based almost entirely on the performance of my Current Conditions Index, a broadly based indicator of Rhode Island’s economic performance. Several improving CCI indicators, most notably retail sales, have begun to attain high levels so that for the past five months, CCI values have matched or exceeded their corresponding values from last year, indicating that our recovery is becoming more broadly based.

2 The construction and manufacturing industries continue to struggle the most. What will it take here to lift them back toward pre-recession levels?

Construction and manufacturing, which represent Rhode Island’s goods-producing sector, suffered greatly during the last recession and typically don’t add many jobs during recoveries, since we are a service-based economy. We can’t rely much on new single-home construction given growth restrictions and other factors, so we will have to rely on multiple-family homes and larger construction projects. The central role of productivity limits hiring in manufacturing, so we will either need our existing manufacturing firms to expand or substantial numbers of new firms.

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3 How is the improved economy in neighboring states helping Rhode Island? How can Rhode Island help itself?

The substantial decline in Rhode Island’s jobless rate has only been possible with many Rhode Islanders working in neighboring states, since payroll employment has not performed terribly well until the last few months. Rhode Island must continue reinventing itself as it is now doing after neglecting this for far too long.

4 Which recent legislation or government actions will generate the economic momentum Rhode Island needs to fully recover?

Several pieces of legislation will help us recover further, especially the actions that reduce energy costs for manufacturing firms. It will take time, so we won’t see their effects until the end of 2015 or early 2016.

5 What evidence have you seen that the state’s economy will be able to better weather the next national recession?

At present, there is very little evidence Rhode Island will weather the next recession better than it did the past one. The good news is the next recession will likely be far milder. •

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