R.I. economy grew in 4Q, but showing signs of weakness

PROVIDENCE – Rhode Island’s economy experienced positive growth in the fourth quarter, but is showing signs of weakness, according to the Rhode Island Current Economic Indicator briefing released Tuesday.
The quarterly briefing, developed by economists at The Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council, combines several key gauges of economic activity to measure economic conditions in Rhode Island.

“The CEI forecast indicates the Rhode Island economy has slowed and is trending lower than the national economy, which is a sign that the state economy has inherent weaknesses,” John C. Simmons, executive director of RIPEC, said in a statement.

“The employment recovery is still not robust enough to support the economy, but there are signs that spending within the state is improving,” Simmons added.

The state’s economy grew by 1.8 percent in the fourth quarter. It was preceded by growth of 2.4 percent in the third quarter. The state’s economy fell short of fourth-quarter projections of 2.5 percent growth, however.
Growth is expected to continue in the first quarter of 2015, with expansion projected at 2 percent.

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Rhode Island’s economy in the fourth quarter also lagged when compared with New England’s economy as a whole, which grew 3 percent in the fourth quarter, an increase of 0.7 percentage points from the third quarter.
“Although Rhode Island outperformed the regional economy in each of the first three quarters of 2014, the state’s economy grew at a significantly slower pace than the region during the fourth quarter,” according to a news release from the organizations.

The organizations blamed Rhode Island’s slower growth on “mixed performance” on 11 CEI indicators that measure internal state economic activity.
Five of the 11 indicators experienced positive growth in the fourth quarter compared with eight of the 11 indicators in the third quarter.
Among the indicators contributing negative growth to the CEI were construction employment, trade and transportation, as well as utilities employment, information services employment, and professional and business services employment. Job losses in those sectors are reflected in a 3.9 percent increase in the average number of weekly initial unemployment insurance claims during the fourth quarter.

Other sectors, including manufacturing employment, performed well in the fourth quarter. Manufacturing employment increased 3.6 percent, continuing a year-long trend of positive job growth. Education and health services employment reversed two consecutive quarters of stagnant or negative job growth, while leisure and hospitality employment gained jobs for the first time since the first quarter of the year.

In addition, general sales and gross receipt taxes showed positive growth in the fourth quarter.

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