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The newly released revised annual average data show that Connecticut nonfarm employment declined for the third year in 2003 by 1.3 percent, or 21,700 jobs. This follows losses of 16,200 jobs (-1.0 percent) in 2002 and 12,100 (-0.7 percent) in 2001. From 2000, when employment began to fall, our State has lost 50,000 jobs, or 3.0 percent. Thus, using nonfarm employment as the proxy for Connecticut's economy, we are in our third year of the current recession. Although this recession is showing to be the second longest since 1939, it is far milder than the longest and severest recession of 1989-1992, when over 141,000 jobs, or nearly ten percent, were lost. It is also important to note that, in spite of the current decline, Connecticut still has around 117,000 more jobs than it had in 1992 at the depths of the prior recession.
As the table on page 3 shows, the annual average unemployment rate also rose again in 2003, to 5.5 percent. Real personal income of Connecticut residents barely grew in the last three years (ranging from 0.1 to 0.2 percent), showing the weakest growth in the 13 years since 1990, with the exception of 1991 when it actually fell by 3.6 percent. Other economic indicators, such as construction contracts, air cargo tons, exports, State revenues, tourism, and air passenger count, also reflected further weakening of Connecticut's economy last year.
On the other hand, some economic indicators, which tend to signal future economic conditions, shed a positive light in 2003. New housing permit activity, for instance, increased for the second year. Last year's 9,985 almost hit the 10,000 mark, and was the highest since the pre-recessionary level of 10,637 in 1999. The number of new automobile registrations turned the corner in 2003 after two years of decline, to an all time high of 253,176. Consumers clearly took advantage of the record low interest rates in making these major purchases. Moreover, the number of initial claims for unemployment finally fell last year, after having risen for two consecutive years.
Industry Sectors
As the chart on the front page shows, last year's employment decline was once again marked by severe job cuts of nearly 12,000 in manufacturing. In fact, except for 1997 and 1998, this sector's employment has been declining steadily since 1985. Most of the layoffs were in durable goods manufacturing, including computer and electronic products, transportation equipment, machinery, and fabricated metal. As the chart also shows, since the current recession began in 2000, this sector has experienced 36,200 job losses, which accounted for nearly three-fourths of the total nonfarm employment decline. However, inflation-adjusted average hourly earnings of workers in manufacturing have sustained an increase over the year. Its output, as measured in the Connecticut Manufacturing Production Index, also rose last year after falling in 2002.
The professional and business services sector also continued to lose jobs over the year, making it the industry sector with the second most job losses both from the previous year (-5,700) and from 2000 (-19,600). Other sectors with employment losses from a year ago were trade, transportation, and utilities, government, construction, and information.
On the other hand, the educational and health services, leisure and hospitality, and financial activities sectors gained jobs over 2002. In fact, the educational and health services sector gained the largest number of jobs from 2000, 17,900 or 7.3 percent.
Labor Market Areas
In 2003, as the chart on page 2 shows, all but one (New London) of the ten labor market areas (LMAs) in Connecticut lost jobs. This was worse than the prior year when five of the ten areas experienced declines. As the chart also shows, the percentages of job decline ranged from 0.3 percent in the Danbury LMA to 1.8 percent in both the Danielson and New Haven LMAs. Since the State's current recession began in 2000, only the New London LMA has shown employment growth over each of the last three years, as the casinos underwent further expansions. In fact, as the data from the table on page 3 shows, New London area employment grew 3.2 percent from 2000, while the Stamford area lost jobs by 6.8 percent. Since the last employment trough in 1992, New London area employment increased by 20 percent. Conversely, Hartford area employment grew the least (1.2 percent) from 1992.
Commissioner James F. Abromaitis of the Connecticut Department of
Economic and Community Development (DECD) announced that Connecticut communities authorized
689 new housing units in January 2004, a 9.5 percent increase compared to January of
2003 when 629 units were authorized.
The Department further indicated that the 689 units permitted in January
2004 represent a 16.9 percent decrease from the 829 units permitted in December 2003.
Portland led all municipalities with 77 units, followed by Fairfield with 76
and Norwalk with 45 units. Among all Labor Market Areas (LMAs), the Bridgeport LMA recorded the largest number and percentage increases
(95 units, 211 percent) compared to a year ago. From a county perspective, Middlesex County showed the
largest gain of 73 units (or 149 percent) from last year.
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