PROVIDENCE – University of Rhode Island economist Leonard Lardaro does not expect the state’s economy to return to where it was before the COVID-19 pandemic for another two to five years, according to his latest Current Condition Index report on the state’s economy.
The state had a CCI value in March of 33, marking a 25-point decrease year over year. A CCI value greater than 50 indicates economic expansion, while less than 50 means contraction.
The economist wrote in his report released on Tuesday that he’d like state government personnel to become more transparent in describing Rhode Island’s economic performance, such as the unemployment rate, to stop seeming as if the state was “hanging in there.”
“Rhode Island’s 4.6% unemployment rate for March is both meaningless and irrelevant,” wrote Lardaro. “Had this number been based on the last week of March, it would clearly have been a double-digit value, which will only move higher in April.”
While the state and country’s economies are “clearly in recessions,” according to Lardaro, that term is not entirely appropriate for the pandemic’s impact on the current conditions. He calls the pandemic an exogenous shock, and the “most dramatic I have ever witnessed in my professional career.” The pandemic literally pulled the “rug” out of the entire country’s economies, forcing them to come to a halt.
Still, Lardaro says the state should have been better prepared after what he called a disappointing 2019.
“In Rhode Island’s case, there was little, if any, meaningful planning in general for possible negative future events, even though it was highly likely in my assessment that we would have experienced a recession anyway by the end of 2020,” wrote Lardaro.
The economist said the hardest-hit industries by this pandemic are travel, tourism and hospitality – all of which make up a large part of Rhode Island’s economy. The economic losses force the state to live in a worst-case scenario, which he only expects to get worse in April’s CCI.
Eight of the March index’s 12 indicators did not improve year after year, including a 2,553% increase in new unemployment insurance claims and a 13.7% drop in retail sales, among others.
Only four of index’s indicators improved year over year:
- Government employment increased 0.6% year over year.
- Single-unit permits increased 51.9% year over year.
- Manufacturing wages increased 1.1% year over year.
- Labor force increased by 2.2% year over year.
Alexa Gagosz is a PBN staff writer. Contact her at Gagosz@PBN.com.
