Since the financial crisis, a Narragansett Bay-sized cloud of self-doubt or “irrational negativity,” as Gov. Lincoln D. Chafee described it, has been among the factors blamed for Rhode Island’s inability to regain its financial footing.
This self-esteem problem was called out in the Make It Happen Rhode Island forums one year ago and triggered The Rhode Island Foundation to launch the In Our Backyard advertising campaign to raise public confidence. The R.I. Economic Development Corporation also created a new reputation-management committee.
Whether negativity itself was really to blame for the poor economic outcomes Ocean State businesses suffered through is difficult to know for certain. But if it was, the attitude adjustment needed to lift Rhode Island out of its collective funk may be farther along than most people expected.
For only the third time in the five-year history of the Providence Business News semiannual Business Survey, a majority of business leaders now anticipate economic improvement in the state over the next 12 months.
In fact, the nearly two-thirds (64.2 percent) of survey respondents who said they expect some level of economic improvement over the next year is far and away the highest percentage the survey has ever recorded. (The next-most-optimistic survey was in the winter of 2010, when 52.6 percent saw progress on the horizon.) And the 4.5 percent who said they expect the Rhode Island economy to “significantly improve” is also the highest since the survey started in 2008.
“We have come out of this downward turn and people have adjusted to what the economy is,” said Steven M. Parente, senior vice president and director of retail banking at Bank Rhode Island. “With the unemployment rate and state fiscal struggles, that is not the recovery we may all want, but businesses and people have adjusted economically.”
Since last year’s survey, the Rhode Island economy has maintained a pace of slow gains signaling movement in the right direction, but still plenty of room for improvement.
The state unemployment rate dropped from 10.5 percent to 8.9 percent over the last 12 months, but that’s still the third-highest unemployment rate in the country, exceeding the national jobless rate by 1.5 percentage points.
And the dropping state jobless rate has been caused by residents leaving the workforce, more than positive job creation.
In July, there were only 700 more Rhode Island-based jobs than there were in July 2012 and population projections for the state are basically flat for the next decade.