Which sectors help R.I. the most?

Leaders, laggards and mehWhile Rhode Island saw a 1.7 percent increase in its gross state product in the last three months of 2015, not all industry sectors performed equally. Below are the contributions each sector made on a percentage point basis for the quarter. / Source: U.S. Bureau of Economic Analysis
Leaders, laggards and mehWhile Rhode Island saw a 1.7 percent increase in its gross state product in the last three months of 2015, not all industry sectors performed equally. Below are the contributions each sector made on a percentage point basis for the quarter. / Source: U.S. Bureau of Economic Analysis

It makes perfect sense in a state that not that long ago had the highest unemployment rate in the nation that creating jobs is a major public-policy focus.

It also makes sense that high-wage jobs should be a priority, given that the cost of living, especially housing, is so high in the region that households with the median yearly income cannot afford the median-priced home in nearly all of the Ocean State’s communities.

The question is, are the industry sectors that showed the most growth at the end of last year ones that will deliver the income the state needs? A look at recent Bureau of Economic Analysis statistics about Rhode Island’s gross state product reveals at least part of that answer.

Five industry categories contributed an aggregate 1.98 percentage points to Rhode Island’s 1.7 percent growth in the quarter (others detracted from state growth, which is why the leaders add up to more than the final state number).

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The leaders were, in order with growth percentage points: information (+0.62 percentage points); wholesale trade (+0.43); construction (+0.36); management of companies and enterprises (+0.31); and professional, scientific and technical services (+0.26).

Based on 2014 U.S. Bureau of Labor Statistics data, the leading industries do not have equal potential to move Rhode Island’s collective economic heft, however. The professional-services group has a median yearly salary of $62,690, while information has a $59,830 median and management a $59,200 median. Construction ($46,770 median) and wholesale trade ($45,120 median) are solid performers, but the difference between them and the three leaders is significant.

And given that in the most recent fact book put out by HousingWorks RI at Roger Williams University, a family earning $55,902 in 2014, the state’s median household income, could afford to purchase the median-priced home in six of the state’s 39 communities, which industries show growth here matters a lot.

What then are the state’s leaders to do? Do you feed those sectors that are performing well and starve those that aren’t, or do you let the market take care of those already at the top of their games and try to bring up the laggards? It is a public-policy debate that will have significant consequences for Rhode Island’s future. •

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