CEI report: R.I.’s economic growth sluggish in Q1 at 0.5%

ECONOMIC GROWTH in Rhode Island in 2018 was sluggish, ranking No. 47 in the nation, and it is expected to start 2019 with similar performance. / COURTESY CENTER FOR GLOBAL AND REGIONAL ECONOMIC STUDIES AND THE RHODE ISLAND PUBLIC EXPENDITURE COUNCIL
ECONOMIC GROWTH in Rhode Island in 2018 was sluggish, ranking No. 47 in the nation, and it is expected to start 2019 with similar performance. / COURTESY CENTER FOR GLOBAL AND REGIONAL ECONOMIC STUDIES AND THE RHODE ISLAND PUBLIC EXPENDITURE COUNCIL

PROVIDENCE – The Ocean State’s economy showed more signs of sluggishness in the first quarter of 2019 as the Rhode Island Current Economic Indicator is expected to have increased at an annualized rate of 0.5% (once final data is in), according to the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council.

The briefing released Thursday projected that the state’s economy “will experience little to no growth” in the second quarter.

Revised 2018 data from the U.S. Bureau of Economic Analysis showed that Rhode Island’s gross domestic product contracted 5.7% in the third quarter and expanded 1% in the fourth quarter. That means Rhode Island’s economy expanded 0.6% in 2018, ranking it 47th in the nation in economic performance, CGRES and RIPEC said.

With the expected slow growth in the first quarter, Rhode Island’s economy continues to lag behind the rest of New England and the nation, the briefing said. The Regional CEI estimates that the New England economy grew at an annualized rate of 2.9% in the first quarter while the U.S. GDP grew at 3.2% in the same period.

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The “growth gap” between Rhode Island and region, and the nation is expected to continue in the second quarter, the briefing said

Five of 11 of the internal trends in Rhode Island contributed positively to the state’s economic health in the first quarter, including a continued recovery for the construction industry.

But the briefing noted some “concerning signs about the labor market and job creation in key economic sectors.” Manufacturing registered no job creation in the first three months of 2019, while employment in education and health services – the largest industry in the state – decreased 0.9%, and professional and business services reversed a long-term expansion with employment declining 9.7% in the first quarter.

Individual indicator changes in the CEI in the first quarter in annualized percentages:

• Regional GDP: 2.9% increase
• National GDP: 3.2% growth
• Construction employment: Increased 4.2%
• Manufacturing employment: Remained the same
• Trade, transportation and utilities employment: Declined 0.2%
• Information services employment: Decreased 8.4%
• Professional and business services employment: Decreased 9.7%
• Financial services employment: Increased 1.5%
• Leisure and hospitality employment: Declined 2.3%
• Education and Health services employment: Declined 0.9%
• Wage and salary disbursements: Increased 1.8%
• Average weekly initial unemployment claims: Decreased 20.2%
• General sales and gross receipt taxes: Increased 6.4%

The full report may be viewed online.

William Hamilton is PBN staff writer and special projects editor. You can follow him on Twitter @waham or email him at hamilton@pbn.com.

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