PBN Economic Trends Summit: R.I. improving but future optimism guarded

KEYNOTE SPEAKER Osborne Jackson, senior economist at the New England Public Policy Center at the Federal Reserve Bank of Boston, addresses the audience at the PBN Economic Trends Summit at the Providence Marriott. Jackson said, “Consumer sentiment is confident, but expectations for the future have declined.” / PBN PHOTO/RUPERT WHITELEY

PROVIDENCE – Graphs with various economic indicators showing a giant dive in 2008-2009 followed by a steady upward line to today flew on big screens past scores of Rhode Island business people this morning at the first Providence Business News Economic Trends Summit, held at the Providence Marriott.

The vector of cataclysmic descent – that is, the Great Recession that started about 2008 – followed by a steady rise confirmed the audience’s consensus that Rhode Island’s economy is on an upward tangent, driven by influences from Boston to Providence to Washington, D.C., and overseas.

The slides and a commentary were presented by Osborne Jackson, senior economist at the New England Public Policy Center at the Federal Reserve Bank of Boston, who served as the keynote speaker.

Rhode Island’s unemployment rate in 2018, at 3.9 percent, “is back to pre-recession levels,” said Jackson. The biggest growth of employment by industry in Rhode Island, he said, is repair and maintenance, construction, and professional and business services. The slowest growth in Rhode Island is transportation, warehousing, utilities, and manufacturing, he added. The labor force participation rate is stable, he said, and in New England it is above the national rate.

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Inflation hovers around 2 percent, Jackson reported. Housing prices in Rhode Island are up 8.5 percent from 2017 to 2018, largely because of lack of supply.

The consumer confidence index, with a baseline value of 100 in 1985, is now at 98.7 in New England.

“Consumer sentiment is confident, but expectations for the future have declined,” Jackson said.

Following Jackson, a panel of executives from the worlds of business, banking, industry and state government discussed the state economy. Most said Rhode Island is doing well overall, but optimism about the future was guarded. The slightly pessimistic view toward 2019 and beyond was mostly because of factors emanating from Washington: interest rates, tariff and trade tensions, and stock market volatility.

PANELISTS LISTEN as Dr. Anne S. De Groot, CEO and chief science officer of EpiVax, answers a question during the PBN Economic Trends Summit at the Providence Marriott. / PBN PHOTO/RUPERT WHITELEY

Panel members hashed over some of the recurring themes that help or hinder economic development in Rhode Island and offered praise in connection to perennial problems that seem to be easing. With a nod to efforts by Gov. Gina M. Raimondo, there was no complaining about bureaucratic red tape, and there was appreciation her administration’s work in economic-development initiatives, workforce training and education.

Still, panelists emphasized the state simply does not have enough workers who are properly trained and educated to fill the jobs that are begging for bodies.

In-state investment in new companies is flabby, a panelist noted. One business owner said she had to go out of state to find sufficient investors to support a new spinoff business; she said the will to invest by Rhode Islanders is weak.

Many comments touched on the advantage of having Boston an arm’s length away, describing the city as a global-caliber engine of innovation and economic activity, and that Rhode Island can benefit from its “halo” effect by offering lower-cost housing, great culture and surroundings, and a feasible commute to Boston.

Mary Lhowe is a PBN contributing writer.

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