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By PBN Staff
PROVIDENCE – The outlook for the Rhode Island economy is mixed, according to the Rhode Island Public Expenditure Council’s Rhode Island Data Book, released Wednesday.
RIPEC’s report, which benchmarks and analyzes population, economic and government data, showed that Rhode Island’s current and future economic outlook fares better than the nation as a whole, but worse than its peers in the New England region.
“While there are a number of positive trends, Rhode Island continues to underperform relative to regional benchmarks,” said the report.
According to the report, Rhode Island saw a larger positive one-month change in the Federal Reserve Coincident index, a measure of current economic conditions, than any other state in New England and was one of only two regional states to see a positive change in the index over the past three months.
The state’s economy, however, which is measured by that index, continues to lag being Massachusetts, Connecticut and the nationwide average.
The data book also showed mixed results for the Ocean State’s educational grades. Rhode island fares worse than the New England average on both reading and math assessments, has a higher share of its population with less than a high school diploma than both the New England region and the United States and graduates fewer students in the coveted science, technology, engineering and math-related fields.
“At the same time, the state also has a higher share of the population holding at least a bachelor’s degree than the national average, continues to see gains in proficiency rates for math and reading, and has a large share of graduates with degrees in business/management,” said the report.
Rhode Island’s fiscal outlook is also mixed, according to the report. The Ocean State’s rate of state government spending has slowed over the past decade, mostly due to revenue declines during the recession. Due to those declines, structural changes that will have long-term impacts – including pension reform – were enacted by the state government.
Even as the state cut some spending, general revenue deficits in the out-years are projected to grow by approximately $375 million of available revenue in fiscal year 2017 as expenditures grow more than double estimated revenue growth.
According to RIPEC, much of the positive movement in the Rhode Island economy has been affected by changes beyond the state’s borders, rather than through internal dynamics. This leaves Rhode Island “more vulnerable to external events such as the possible federal fiscal cliff, as well as the European debt crisis.”
“If Rhode Island wants to be a leader in the new economy, rather than be pulled along by national and regional trends, the state must work to build on its strengths and improve areas of weaknesses,” John C. Simmons, RIPEC executive director, said in prepared remarks.
The full report is available HERE.