Report: R.I. GDP grows at slower rate than region, country

RHODE ISLAND gross domestic product was estimated to have grown at a slower rate than both New England and the United States in the first quarter. / COURTESY CENTER FOR GLOBAL AND REGIONAL ECONOMIC STUDIES AT BRYANT UNIVERSITY AND THE RHODE ISLAND PUBLIC EXPENDITURE COUNCIL

PROVIDENCE – Rhode Island’s gross domestic product grew at an annualized 3.5% in the first quarter of 2021, the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council said on Tuesday.

The Rhode Island current economic indicator, which is designed to measure the state GDP, was lower than the projected New England annualized GDP growth of 5.2%, as well the United States annualized growth rate of 6.4% in the quarter.

The CEI is comprised of 14 individual indicators, including employment in various sectors, wage and salary payments, unemployment claims, employment figures and tax collections.

The report said that Rhode Island’s “growth gap,” which was said to have existed prior to the pandemic, widened due to the economic downturn that has accompanied the pandemic.

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“We’ve come a long way from our economic freefall last spring,” commented RIPEC CEO and President Michael DiBiase, “but the briefing reveals stubborn structural weaknesses that are slowing our recovery and make the Ocean State more vulnerable in the future.”

The construction sector in the state was said to have been “particularly resilient to the pandemic” in Rhode Island, while the leisure and hospitality industry continued to be “severely constrained.”

Two sectors in the state were said to have negatively impacted economic activity in the state in the first quarter, including professional and business services and the information services sector.

The GDP estimate for Rhode Island was also said to be negatively impacted by a 102.7% increase in initial unemployment claims in the quarter, after declining 14.1% one quarter prior.

The report on the state’s economy found that the job market has been improving, but performance is not consistent across all economic sectors and wage growth has been slow.

“Policymakers should take note of weaknesses in the state’s industry mix and consider what policies may best spur economic development in high-growth industries,” said DiBiase.

Rhode Island GDP was projected to have increased at a 2.6% annualized rate in the fourth quarter of 2020.

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