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Connecticut's merchandise
exports to foreign markets
of $7.8 billion in 1997 increased by
over $955 million, or 14 percent,
from the year before. This represents
the largest increase since a
16 percent gain in 1990. Connecticut's
export growth was ahead of
the 10.4 percent U.S growth rate
for the same period, and ahead of
export growth rates in neighboring
states of New York, and Massachusetts.
Connecticut's growth rate
also exceededthat for New
Hampshire, North Carolina,
and Pennsylvania, and
matched the growth rate for
New Jersey among states in
the Northeast.
The growth in
exports is a strong indicator
of the competitiveness of
Connecticut companies and
products in foreign markets.
Among other recent indicators,
this is one of the strongest signs of
the overall health of Connecticut's
economy. Connecticut's strong
export growth also validates the
DECD's International Strategic
Action Plan and the effects of the
Industry Cluster and International
Division to increase firms' global
competitiveness.
Export Trend
The trend in Connecticut's
merchandise exports is presented
in the chart below. As can be
seen, the 1997 exports have
reached their highest level since
state-level export statistics have
been available.
Data Source
The source of this information
is the U.S. Department of Commerce,
which releases the data
quarterly based on data extracted
from the Shippers Export Declaration
document. However, under a
unique contract with the Massachusetts
Institute for Social and
Economic Research (MISER), the
U.S. data are refined and estimated
by state. MISER is the only
source of state export data available.
No comparable state statistics
on imports are available and
no estimates of service exports by
state are made. The data pre-
sented in this report are for merchandise
exports only and are
based on the "Origin of Movement"
rather than "Zip Code of Exporter"
data series from MISER.
Export Industries
Connecticut's export growth in
1997 was driven by growth in the
transportation equipment industry
of 18.6 percent, industrial machinery
of 26.9 percent, and instruments
and related products of 21.8
percent. Other leading export
industries were primary metals, up
72.3 percent; apparel and other
textile products, up 110.9 percent;
and rubber and miscellaneous
plastics products, up 57.7 percent.
Export Countries
Connecticut exporters continued
to diversify and expand their
international markets. Canada
continued to be Connecticut's top
export market with an 11.6 percent
increase over 1996. The
United Kingdom and Japan were
in second and third places. Exports
to the United Kingdom were
up 22.9 percent and exports to
Japan were up 4.4 percent.
Among the top ten export destinations,
the single largest increase
was for exports to the Republic of
Korea, up 113.5 percent.
Export Jobs
In 1996 it was
estimated that manufactured goods accounted
for 240,000 jobs in the state,
about 96,000 direct jobs, and an estimated
144,000 indirect jobs in
banking, freight forwarding,
communications and other services.
The most recent estimate
from the U.S. Bureau of Economic
Analysis put Connecticut second
only to Washington with 7.5
percent of total employment
related to the export of manufactured
products.
Export Assistance
The Department of Economic
and Community Development has
investigated ways to help businesses
successfully take the first
steps in overseas markets. The
latest initiative is a free, one-stop
information source provided
through the Connecticut Economic
Resource Center, Inc. (CERC), a
private, non-profit organization
that works with the DECD to
support economic development
efforts and to promote Connecticut
as a business location. For more
information and export assistance,
call the Access International line at
1-800-392-2122.
The Connecticut Department
of Labor, Office of Research, in conjunction with the U.S.
Department of Labor, Bureau of
Labor Statistics, conducts a
yearly mail survey designed to
produce estimates of employment
and wage rates by occupation.
The Occupational Employment
Statistics (OES) program collects
data on wage and salary workers
in nonfarm establishments in
order to produce estimates for
over 750 occupations in over 400
industry classifications.
The 1996 survey round was
the first year that the OES program
began collecting wage rate
data along with occupational
employment data in every state in
the nation. In addition, the
program's three-year survey cycle
was modified to collect data from
all industries each year. Prior to
1996, data was collected from
selected industries each year of
the three-year survey cycle. Also
new with the 1996 survey round
is the collection of wages for nine
areas in Connecticut. This
information will be released
shortly in a separate publication,
and will contain additional
occupations for each area when
the second and third rounds have
been completed.
Nationwide, approximately
400,000 establishments in private,
public and non-profit
sectors are represented. In
Connecticut, the survey included
over 7,000 businesses with a
total employment of approximately
423,000. Survey results
were based on a 77 percent
response rate from the businesses
contacted, covering 72
percent of the surveyed employment.
The estimates produced from
the OES survey provide accurate
and valuable wage information to
job seekers, counselors, students,
planners, economic developers
and others. The data will help
employers identify wage levels
and trends by industry and
occupation, adjust existing pay
structures, evaluate future
personnel needs and discover
new labor and resource markets.
The OES wage data can also be
compared between metropolitan
statistical areas (MSA), states
and the nation. Occupational
employment and wage estimates
are especially useful for initiatives
such as Jobs First, where
Temporary Family Assistance
(TFA) recipients are expected to
move from TFA into employment
within a short period of time.
OES wage data, when combined
with the Office of Research
occupational projections, can
identify entry-level occupations
that require minimal skills,
education, and experience, as
well as forecast the number of
these jobs for which workers will
be needed in Connecticut.
The 1996 survey found the
five highest paying occupations
in Connecticut overall to be:
Dentists, $50.96; Podiatrists,
$42.19; Lawyers, $36.74; Health
Assessment & Treatment Teachers-
Postsecondary, $35.87; and,
Chiropractors, $34.82. The
results showed the five lowest
paying occupations in Connecticut
to be: Waiters & Waitresses,
$5.80; Cooks-Fast Food, $5.99;
Baggage Porters & Bellhops,
$6.07; Ushers, Lobby Attendants
& Ticket Takers, $6.17; and,
Amusement & Recreation Attendants,
$6.25.
In the waning hours of the
1998 session the General
Assembly on May 5th unanimously
approved legislation
launching Connecticut's industry
cluster initiative. Only
fifteen months earlier, the first
cluster meetings were convened,
accompanied by enthusiasm as
well as questions about the
ultimate outcome of such an
ambitious program. These
questions were answered convincingly.
The 130 business and education
leaders who comprised the
industry cluster Advisory
Boards presented key recommendations
to Governor Rowland in the report "Partnership
for Growth." Praised as one
of "the most significant economic
strategies in the last 50
years," the recommendations
received strong bipartisan
support.
Enacted recommendations were:
$3 million to fund cluster "activation"
and related activities;
$20 million in re-authorized
Connecticut Innovations' (CII's)
bond funds for creation of
laboratory and incubator space;
expansion of the 15-year carryforward
period for the 20 percent
research and experimentation/
incremental tax credit for
all taxpayers (previously limited
to biotech companies); a full 6
percent R&D tax credit for all
companies with $100 million or
less in revenues; $4 million in
Manufacturing Assistance Act
budget for cluster activities; and
an increase from $1 to $3
million for CONN/STEP to
create a world-class manufacturing
resource center.
Commissioner James F.
Abromaitis of the Connecticut
Department of Economic and
Community Development today
announced that Connecticut
communities authorized 928 new
housing units in April 1998, a 10.4
percent decrease compared to April
of 1997 when 1,036 were authorized.ommissioner James F.
Abromaitis of the Connecticut
Department of Economic and
Community Development today
announced that Connecticut
communities authorized 928 new
housing units in April 1998, a 10.4
percent decrease compared to April
of 1997 when 1,036 were authorized.
The Department further indicated
that the 928 units permitted
in April 1998 represent an increase
of 24.2 percent from the
747 units permitted in March
1998. The year-to-date permits
are up 5.7 percent, from 2,894
through April 1997, to 3,059
through April1998.
"The year over year increase of
5.7 percent indicates that longterm
growth in the housing sector
continues to be sustained," James
F. Abromaitis said.
Reports from municipal officials
throughout the state indicate that
Windham County with 54.2
percent showed the greatest
percentage increase in April
compared to the same month a
year ago. Middlesex County followed
with a 47.1 percent increase.
Hartford County documented
the largest number of new, authorized
units in April with 206. New
Haven County followed with 197
units and Fairfield County had
193 units. North Haven led all
Connecticut communities with 46
units, followed by Wallingford with
27, and Shelton with 26.
We pause this month to offer
some comments on macroeconomic issues at the
national level, a topic that is
currently receiving much discussion
in the popular and financial
press. As we have stated before in
this space, the future of the
Connecticut economy depends
critically on the future of the
national economy.
The Economist (April 18th-24th
1998) kicked off significant debate
arguing that the U.S. economy was
a "bubble" about to burst. The
Economist cited three trends to
bolster their thesis - inflation in
asset prices, merger activity
verging on mania, and rapid (M3)
money growth. The policy lesson?
The Fed must raise interest rates
now to pop the bubble before
"speculative excesses" get worse.
Connecticut will be quite sensitive
to any such move by the Fed since
a good portion of our income
growth over the last several years
can be traced to capital gains. An
increase in interest rates cannot
be a good sign for Connecticut, nor
for the nation.
The bubble view counters the
"what-me-worry" attitude of those
arguing that the U.S. has entered
a "new era." This view argues that
the significant pain of the recent
restructuring in the U.S. and
Connecticut economies has paved
the way for continued healthy
growth with low inflation and
interest rates. No need exists, in
this view, for the Fed to intervene
and raise interest rates.
We do not believe that the
business cycle has been repealed.
The business cycle may be an
entirely new animal, but it remains
as a foe. Nor do we believe that a
stock market correction will cause
a collapse in the economy. The
recent restructuring has positioned
the U.S. and Connecticut
economies to better weather future
downturns. Nevertheless, future
moves, or lack thereof, by the Fed
will fundamentally affect the
future of the national and Connecticut
economies.
Returning to more local issues,
the Connecticut coincident and
leading employment indexes both
fell somewhat with the release of
(preliminary) March data, after
reaching new peaks in the last two
months. Nevertheless, each index
is still up on a year-over-year
basis.
In summary, the coincident
employment index rose from 87.3
in March 1997 to 94.2 in March
1998. All four index components
continue to point in a positive
direction on a year-over-year basis
with higher nonfarm employment,
higher total employment, a lower
insured unemployment rate, and a
lower total unemployment rate.
The leading employment index
rose from 89.8 in March 1997 to
90.7 in March 1998. Three index
components sent positive signals
on a year-over-year basis with a
lower short-duration (less than 15
weeks) unemployment rate, a
higher average workweek of manufacturing
production workers, and
higher Hartford help-wanted
advertising. The other two components
sent negative signals on a
year-over-year basis with higher
initial claims for unemployment
insurance and lower total housing
permits.
Source: Connecticut Center for Economic Analysis, University of Connecticut. Developed by Pami Dua [(203) 461-6644,
Stamford Campus (on leave)] and Stephen M. Miller [(860) 486-3853, Storrs Campus]. Kathryn E. Parr [(860) 486-0485, Storrs
Campus] provided research support.
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