If Rhode Island’s chapter of the Smaller Business Association of New England is any barometer, the state’s economic expansion has come to a grinding halt.
At a meeting last week, the association polled its members, 55 percent of whom said they believe that Rhode Island’s economy is declining slowly and another 34 percent who said it was stable. Only 11 percent thought the state’s economy was rising slightly. The audience included a number of bankers and economic development officials, along with small business owners.
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The poll was taken at the outset of a state of the economy message from Wayne Ayers, chief economist at FleetBoston, whose projections nationally and for the region were a bit more hopeful than that of the SBANE membership. Ayers said the economy, which a year ago December was growing at a rate of more than 8 percent, was quickly slowing to a level of 2 to 2.5 percent this year, but with slower growth at the beginning of the year, possibly 1 percent.
He suggested that in the early going the nation, the region and Rhode Island would skirt a recession, but not fall into one.
However, his projection of 1 percent growth over the early part of the year is disturbing. Just a couple of weeks ago, Leonard Lardaro, a University of Rhode Island economist, suggested that if the national economy slows to 1.5 percent growth or less, then Rhode Island was likely to fall into a recession.
Given that, and the fact that Ayers said manufacturing, which remains a significant segment of the Rhode Island economy, is already in recession nationally, then it would seem Rhode Island is in a precarious situation already.
It again points out how necessary it is for this legislative session to take heed of some of the critical issues facing business.
Asked what recommendations he had for the state in a slowing economy, Ayers said it would be to “attract and retain businesses.” And the way to do that, he said, was by “being competitive on the tax side and on the regulatory side,” areas where he considers “Rhode Island falls short.” An important message for both our governor and the legislature at the beginning of a very important legislative session.
