Report: R.I. economic recovery ‘on steady course’ in 1Q

THE STATE'S ECONOMIC activity grew at an annual rate of 2.2 percent during the first quarter of 2014 and is expected to grow at an annualized rate of 2.1 percent during the second quarter, according to the Rhode Island Current Economic Indicator Index released by the Rhode Island Public Expenditure Council and Bryant University. / COURTESY BRYANT UNIVERSITY AND RHODE ISLAND PUBLIC EXPENTITURE COUNCIL
THE STATE'S ECONOMIC activity grew at an annual rate of 2.2 percent during the first quarter of 2014 and is expected to grow at an annualized rate of 2.1 percent during the second quarter, according to the Rhode Island Current Economic Indicator Index released by the Rhode Island Public Expenditure Council and Bryant University. / COURTESY BRYANT UNIVERSITY AND RHODE ISLAND PUBLIC EXPENTITURE COUNCIL

PROVIDENCE – Rhode Island’s economic growth held steady in the first three months of 2014, according to the Rhode Island Current Economic Indicator index released Wednesday by the Rhode Island Public Expenditure Council and Bryant University’s Center for Global and Regional Economic Studies.

The CEI for the first quarter came in at a 2.2 percent growth rate compared with the revised 2.3 percent rate for the fourth quarter of 2013. RIPEC and Bryant had initially forecast a first-quarter growth rate of 2.7 percent.

The latest leading indicator, projecting the CEI growth rate in Rhode Island for the second quarter of 2014, is forecast at 2.1 percent.

The quarterly CEI combines several “key gauges of economic activity” in a single statistic to measure the overall current economic conditions in Rhode Island. It is calibrated to grow at the rate of the real gross state product and can be interpreted as the underlying growth rate of the state economy, according to RIPEC and the Bryant center.

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“The labor market is responding to the improved economic outlook,” the report stated. Pointing to 7,000 new jobs created in the first quarter compared with the previous year and a 2.6 percent increase in personal income, RIPEC and Bryant said recent data “indicate that the Rhode Island economy is sustaining the recovery pace, despite a slowdown of the U.S. economy.”

Rhode Island’s Current Economic Indicator, which has consistently trailed growth nationally and regionally, outpaced both the U.S. and New England economies in the first quarter. The U.S. economy grew at an annualized rate of one-tenth of a percent in the first quarter, while the regional economy expanded at a rate of 1.7 percent.

Reflecting the state’s steady growth, RIPEC and Bryant reported that five of seven internal factors positively affected the Rhode Island CEI in the first quarter. Employment in leisure and hospitality services increased 7.6 percent through March, while professional and business services employment grew 4.6 percent. Construction employment also climbed in the first quarter, rising 5.1 percent.

However, the state’s 8.7 percent unemployment rate in March (the highest in the country) contributed to a 17 percent rise in the number of seasonally adjusted initial unemployment claims in the first quarter. The other internal factor that negatively impacted the first-quarter CEI was general sales and gross receipt taxes, which fell 1.1 percent.

“The basic foundation of Rhode Island’s economy seems to have stabilized, as we continue to have positive employment growth in selected areas,” said John Simmons, executive director of RIPEC. “However, other indicators, such as recently released local labor force statistics, and the income and growth potential of some major industries, remain a concern.”

Ways to structurally improve the state’s economy will likely remain a focus in coming months, Simmons said.

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