SMITHFIELD – The Rhode Island Current Economic Indicator increased at an annualized rate of 0.2 percent in the fourth quarter, according to the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council Tuesday.
The measure, which is designed to grow at the rate of the real gross state gross domestic product, significantly slowed from second and third quarter growth rates of 2.8 percent and 2.9 percent, respectively. In the first quarter of 2018, the CEI increased 0.4 percent.
The report characterized the slowdown as reflective of a stagnant economy with weak growth compared to regional and national trends, even despite a slowdown in U.S. GDP and regional GDP growth. The report summary noted that the figures show signs of an economic slowdown in Rhode Island in the near term.
Eight of 11 of the internal trends in Rhode Island contributed positively to the state’s economic health in the fourth quarter.
The three internal components that worsened in the fourth quarter were manufacturing employment, which declined at an annualized rate of 4.2 percent, leisure and hospitality employment, which declined at an annualized 11 percent rate in the quarter and an annualized 18.9 percent increase in unemployment claims. The report also forecast no growth in the real state GDP in the first quarter of 2019.
Rhode Island’s economy woes were partially attributed to an aging labor force, slow labor growth and an out-migration of high-skilled workers – resulting in a “mismatch between labor supply and demand.” The report also cited a perceived unfriendliness to businesses attributed to the state, which may dissuade companies that may have expanded in the state, along with a “lack of business and enterprise clusters that generate economies of scale,” further limiting the state’s recovery from the Great Recession.
Individual indicator changes in the CEI in the fourth quarter in annualized percentages:
• Regional GDP: Grew 0.8 percent
• National GDP: 2.6 percent growth
• Construction employment: Increased 2.7 percent
• Manufacturing employment: Declined 4.2 percent
• Trade, transportation and utilities employment: Grew 3 percent
• Information services employment: Increased 7 percent
• Professional and business services employment: Increased 0.6 percent
• Financial services employment: Increased 0.8 percent
• Leisure and hospitality employment: Declined 11 percent
• Education and Health services employment: Increased 2.9 percent
• Wage and salary disbursements: Increased 1.1 percent
• Average weekly initial unemployment claims: Increased 18.9 percent
• General sales and gross receipt taxes: Increased 5.9 percent
The full report may be viewed online.
Chris Bergenheim is the PBN web editor. Email him at Bergenheim@PBN.com.