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Connecticut Economic Digest: February 1998 issue
Connecticut's International Seaports And Airport | New Auto Registrations: What's Really Under The Hood? | Housing Update | Coincident Index Takes Breather; Leading Index Moves Up

Connecticut's International Seaports And Airport
by Robert F. Juliano, Chief Bureau of Aviation & Ports, Connecticut Department of Transportation

It is amazing that a majority of Connecticut residents and many within the business community are not aware of Connecticut's international maritime and aviation infrastructure and its potential impact on the economy. For example, relatively few people know that refrigerated ships arrive each week at the Port of Bridgeport with substantial loads of bananas and other tropical fruit imported from Central America.

Actually, there are three major seaports in Connecticut capable of handling waterborne commerce: Bridgeport, New Haven and New London. Ships arriving from points around the world ranging in size from 20,000 - 40,000 tons load and discharge cargo at these ports.

The Port of New Haven is the largest of the three ports, with thirteen marine terminals of various types. Logistec Connecticut, Inc. and Gateway Terminal operate the largest multipurpose terminals with each operator having multiple berths. Logistec Connecticut specializes in the handling of general and "breakbulk" cargo such as steel, steel products, copper, zinc, aluminum, tin, forest products, recyclables, containers, project cargo, and heavy lifts. Gateway Terminal specializes in the handling of both dry and liquid bulk cargo such as petroleum products, scrap metal, pumice, cement, salt and aggregates. Substantial warehouse and tank facilities are available at the Port for storing both bulk and breakbulk cargo ships with drafts ranging up to 36 - 39 feet Mean Low Water (MLW). Rail service is available. New Haven Harbor is also the jet fuel pipeline terminal that serves Bradley International Airport, and Westover Air Force Base located in Chicopee, MA.

The Port of Bridgeport provides facilities for deepwater shipping and the Bridgeport-Port Jefferson Ferry. Logistec Connecticut operates the Cilco Terminal which consists of two berths with a draft of 33 feet MLW, 130,000 sq. ft. of dry storage space, and 85,000 sq. ft. of refrigerated warehousing with a temperature capability to 32 degrees. The primary cargo handled consists of imported bananas, plantains and other fruits, forest products, and other miscellaneous general cargo.

The Port of New London also has deepwater ship handling capabilities available at the State Pier. The State Pier, which recently was completely rebuilt, provides two berths alongside a 1,000 ft. concrete pier with a 35 foot MLW draft, and dry cargo storage warehousing. Logistec Connecticut is the terminal operator.

The State Pier handles general cargo consisting primarily of forest products, with container services available. An area adjacent to the State Pier is being used by the Mashantucket Pequots Tribe to operate the Sassacus, a 147 foot high speed ferry to be operated between New London and New York City. The Railtec Pier handles dry bulk commodities. Ferry operations to Block Island, Fishers Island and eastern Long Island are conducted at City Piers located in downtown New London.

Bradley International Airport is home to ten scheduled all-cargo airlines and several other charter operators. UPS has just completed construction of a 230,000 sq. ft. regional hub facility on the east side of the Airport with plans for additional space. The Roncari Air Cargo Terminal consists of two adjacent terminal buildings containing a total of 90,000 square feet of terminal space close to the passenger terminal. U.S. Airports operates an 86,000 square feet terminal used primarily by the integrated air cargo/freight forwarding carriers on the northwest side of the Airport. Current available cargo ramp space amounts to just under 2 million square feet.

With a 9,500 ft. runway, Bradley International Airport is capable of handling all passenger and cargo aircraft, including B- 747's, the Russian built AN-225, and the Concorde. In the early 1970's, when international charter operations were at a peak, approximately one thousand nonstop transatlantic passenger charters were operated annually. More recently, Panalpina - - a major international freight forwarder - operated up to six flights weekly with B-747 all-cargo charters between the U.K., Luxembourg, Mexico and Hartford.

There are also three Foreign Trade Zones in Connecticut located at or near each of the ports, and one in Windsor Locks adjacent to Bradley International Airport.

Passenger and Cargo Traffic The number of passengers to come through Bradley Airport showed a steady increase from 1994 to 1997. A fivepercent increase in the number of passengers traveling through Bradley Airport occurred from 1994 to 1996. Passenger traffic increased one percent in 1997. It is estimated that 1997 cargo traffic will show no increase over 1996.


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New Auto Registrations: What's Really Under The Hood?
by J. Charles Joo, Research Analyst

The number of new automobile registrations processed in Connecticut rose last year after two consecutive years of decline. The total tally of registrations processed by the Connecticut Department of Motor Vehicles (DMV) stood at 178,599, increasing by 0.6 percent in 1997. Registration figures have served as an economic indicator for several decades, and are published every month in the Digest on page 7. This article briefly examines what the data really encompass and how they have reflected employment trends at new car dealerships and aggregate employment trends overall.

Definition

The DMV's new auto registrations count is the number of records processed by the DMV title system during each month. Due to varying lags in processing, these totals do not reflect the actual number of vehicles bought during a month, but they do provide a good indication of consumer confidence as reflected in new automobile purchases over time. The count comprises all new vehicles, including those sold as dealer demonstration models, processed during the month that meet the following criteria: the vehicle had no prior state title or number; the model year of the vehicle falls within the current or past year; and the vehicle was bought only through a Connecticut dealer.

Historical Trends

Looking at the historical trends back to 1963 (the earliest year data are available), the highest level of registrations was in 1986, during the height of the economic boom in the State. As the table on page 4 shows, the lowest level was seen in 1991, with only 95,870 registrations processed. That year, employment dropped by 68,300, the worst one-year job decline in 35 years. Then, from 1992 to 1994, Connecticut experienced a 52 percent surge in registrations reflecting a boom in new car sales. Accordingly, new car dealers did well. The number of new jobs at automobile dealerships shot up by 9.2 percent, after losing almost 25 percent of their employees between 1988 and 1991. Factors that contributed to the increased demand for new automobiles were: the combination of record low interest rates and the end of recession, enabling more confident consumers to spend on big ticket items such as new cars; the increasing trend towards leasing; and the fact that there were many older cars on the road that owners wanted or needed to replace.

To Lead Or Not To Lead

Although the trend in registrations in the past has signaled impending recessions, such as in 1975 and 1989-92, there have been false signals as well (1966- 67 and 1995-96, see Chart). It was also a fairly good predictor of the employment trend at new auto dealerships in the latest downturn. However, whether or not the registrations data will accurately predict future employment turns remains to be seen.

Floor It, Connecticut!

After declining during the 1989-92 recession, employment at automobile dealerships has been growing for the last five years. If the reversal in automobile registrations last year is any indication, and interest rates stay low, this year may be even better for dealers, job seekers in this industry, new car buyers and the Connecticut economy in general.

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Housing Update
December Housing Permits Up 5.6 %

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 622 new housing units in December 1997, a 5.6 percent increase compared to December of 1996 when 589 were authorized.

The Department further indicated that the 622 units permitted in December 1997 represent an increase of 10.9 percent from the 561 units permitted in November 1997. The total number of permits is up 17.4 percent, from 7,714 in 1996, to 9,054 through 1997.

"The 17.4 percent increase in permits - the biggest increase in eight years - suggests that the housing sector is also enjoying the benefits of Connecticut's economic resurgence," Commissioner Abromaitis said. "Of the many recent indications that our economy is healthy and growing, the permit increase is certainly one of the strongest."

Reports from municipal officials throughout the state indicate that Litchfield County with 60.7 percent showed the greatest percentage increase in December compared to the same month a year ago. Middlesex County followed with a 48.4 percent increase.

Fairfield County documented the largest number of new, authorized units in December with 165. Hartford County followed with 136 units and New Haven County had 118 units. Danbury led all Connecticut communities with 29 units, followed by North Branford with 27, and Newtown with 21.

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Coincident Index Takes Breather; Leading Index Moves Up

The Connecticut leading employment index continues its slow and steady increase while the coincident index has taken a breather in the last two months. The recent view of some leading experts (see below), which is also the view supported by our coincident and leading indexes, is that the expansion shows no sign of ending this year. Thus, the current expansion, which is unusually long by historic standards, has a strong possibility of entering its sixth year.

The coincident index, a barometer of current employment activity, fell slightly for a second month with the release of (preliminary) November data. The declines in the last two months follow a two-year period of significant upward movement in the coincident index. While the coincident index fell slightly, it is still up on a yearover- year basis.

The leading index, a barometer of future employment activity, continues its modest upward trend. The leading index did reach its peak, once again, in the current expansion with the release of the (preliminary) November data.

Forecasters at the January 6th Economic Outlook Conference in Hartford (sponsored by the Connecticut Business and Industry Association and the Greater Hartford Chamber of Commerce) painted a generally rosy picture for the future of the national, regional (Northeast), and Connecticut economies. Delos Smith (Conference Board), Paul Getman (Regional Financial Associates), and William McEachern (University of Connecticut) each projected good economic growth in 1998. These forecasters expected economic growth at slightly above 2 percent, which was down by a half or a full percent because of the problems in Asia. Getman was the most optimistic, suggesting that problems in Asia may actually boost economic growth in the Northeast; McEachern was least optimistic, indicating that Smith and Getman may have underestimated the negative effects of Asian situation on the national and local economies.

In summary, the coincident employment index rose from 85.9 in November 1996 to 92.4 in November 1997. All four index components continue to point in a positive direction on a yearover- 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 November 1996 to 90.8 in November 1997. All five index components sent positive signals on a year-over-year basis with a lower short-duration (less than 15 weeks) unemployment rate, lower initial claims for unemployment insurance, higher total housing permits, a higher average workweek of manufacturing production workers, and higher Hartford help-wanted advertising.

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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Last Updated: October 15, 2002