Report: R.I. GDP contracts at 40.6% annualized rate in Q2

RHODE ISLAND GDP was estimated to have declined at a 40.6% annualized rate in the second quarter of 2020, according to the Center for Global and Regional Economic Studies at Bryant University and The Rhode Island Public Expenditures Council. / COURTESY THE CENTER FOR GLOBAL AND REGIONAL ECONOMIC STUDIES AT BRYANT UNIVERSITY AND THE RHODE ISLAND PUBLIC EXPENDITURE COUNCIL

PROVIDENCE – Rhode Island’s gross domestic product declined at a 40.6% annualized rate in the second quarter, reflecting the severe economic impact of the COVID-19 pandemic,  the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council said in a report released Wednesday.

The state’s GDP was estimated to have contracted at a 6.2% annualized rate in the first quarter.

The estimated decline figure comes from the organizations’ Current Economic Indicator, which is designed to measure state GDP changes based on 14 indicators related to wages, tax collections and employment in various sectors, as well as regional and national GDP figures.

The report said the New England GDP contracted at a 34.5% annualized rate in the second quarter, while the nation’s GDP was estimated to have shrunk at a 32.9% annualized rate.

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“The economic effects of the COVID-19 pandemic were felt all over the country in the second quarter of 2020, but these data should be particularly troubling to Rhode Islanders,” said RIPEC CEO and President Michael DiBiase. “While Rhode Island is among the hardest hit states in the nation in terms of the pandemic’s public health impact, the state’s above-average contraction this past quarter is also likely connected to the same structural problems that created a ‘growth gap’ between Rhode Island and the remainder of New England during the economic upturn of the last decade,” he continued.  

“The devastating effects of the COVID-19 pandemic on Rhode Island’s economy are particularly noticeable in labor market indicators,” the report said, noting that the leisure and hospitality sector was the hardest hit in the state.

Rhode Island’s real wages and salary disbursements were estimated to have decreased 8.9% in the second quarter of 2020, after declining 0.5% in the first quarter.

Initial unemployment claims increased 84.9% in the second quarter of 2020 and 379% in the first quarter of 2020.

The full report is available online.

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