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Connecticut Economic Digest: May 1999 issue
Connecticut's Occupational Structure: A Regional View | Industry Clusters | Housing Update | Defining Employment | Long-Term Future Of Current Expansion: A Question Mark?

Connecticut's Occupational Structure: A Regional View
By Michael Polzella and Michael Zotos, Associate Research Analysts

For the first time, the Connecticut Labor Department, Office of Research, has produced comprehensive occupational employment and wage data for the seven largest Labor Market Areas (LMAs) in the State. The LMAs for which this data is now available are the Bridgeport, Danbury, Hartford, New Haven, New London, Stamford and Waterbury LMAs.

The Office of Research, in conjunction with the U.S. Bureau of Labor Statistics, conducts the Occupational Employment Statistics (OES) program, a yearly mail survey designed to produce estimates of employment and wage rates by occupation. The 1997-98 Statewide and LMA estimates represent the combining of two survey rounds of data gathered through contacts with more than 14,000 employers in the State. A close look at the 1997-98 estimates reveals some noteworthy characteristics of the occupational structure in Connecticut.

The estimates show the Stamford LMA as having the highest concentration of people in Managerial and Administrative occupations in the State. This can be attributed to the large corporate presence in the Stamford LMA. Occupations found in the Managerial and Administrative category include general managers/top executives, financial managers, purchasing managers, and administrative service managers.

Despite company mergers and downsizing in the Hartford LMA, the area still remains the leader in the number of professional, paraprofessional and technical workers in the State. Occupations included in this division deal with theoretical or practical aspects of such fields as science, art, education, law and business relations where substantial post secondary education preparation or equivalent on-the-job training or experience is required. Accountants, insurance underwriters, engineers, professors, teachers and physicians/surgeons are just a few of the types of professional occupations found in abundance in the Hartford LMA.

The Sales and Related category of the OES occupational structure includes people selling goods or services as well as other occupations directly related to sales. Sales jobs in this division range from sales engineers, insurance sales agents, real estate agents, securities agents to retail salespersons, cashiers and stock clerks. A careful review of the estimates show the Danbury LMA with the largest percentage of employment in this category. This statistic coincides with another strength of the Danbury area's economy. Year to year, the Danbury area consistently has the greatest volume of retail sales in the State.

With the presence of casino gambling in the southeastern part of the State, it is no surprise that the largest percentage of people working in service occupations can be found in the New London LMA. The service category includes workers in occupations relating to protective services, food services, health assisting services, cleaning and building maintenance services and personal services. The shift from a manufacturing driven economy to a service driven economy is more evident in the New London LMA than anywhere else in the State.

An accurate description of the Waterbury LMA might be "the more things change, the more they stay the same." As our current estimates show, the Waterbury LMA ranks first on the percent of workers in the Production, Construction, Operating, Maintenance and Material Handling occupational division. This division includes all skilled, semiskilled, and unskilled workers performing machine and manual tasks involving production, construction, operating, maintenance, repair, and material handling operations. Examples of occupations in this category are mechanics, installers and repairers, construction trades, machine setters, set-up operators, operators and tenders, as well as hand working occupations such as assemblers. Over the years Waterbury has faded as the "Brass Capital of the World", yet the area still shines with talented and skilled crafts workers prepared for the future.

 The 1997-98 estimates show Connecticut's economy as diverse, with most regions very specialized in their occupational make-up. These occupational employment estimates are very useful to job seekers, counselors, students, planners and economic developers. As well as identifying the types of skilled workers in the market, the data can be used to evaluate occupational trends by industry, classify emerging or declining occupations and evaluate the impact of technology on occupations.

 To obtain a free copy of Connecticut Occupational Employment and Wages, Statewide or for the Labor Market Areas, contact the Department of Labor, Office of Research at (860) 263-6285. The information is also available on our website at: http://www.ctdol.state.ct.us/lmi/misc/oesarea.htm.


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Industry Clusters
Urban Clusters

Can industry clusters play a role in inner city economic development? Most assuredly, according to Professor Michael Porter of the Harvard Business School.cedmay99

Over the past few years Porter has turned his attention to the problem of inner cities with a focus on the role of business and industry in turning the economic tide. In his widely disseminated article, "The Competitive Advantage of the Inner City", Porter argues that inner-city distress is as much an economic problem as a social one. A sustainable economic approach must focus on making inner cities competitive as business locations and on integrating these areas into the regional and national economy.cedmay99

Porter has identified four competitive strengths of inner cities and maintains that building on these inherentcedmay99

advantages is necessary in order to restore prosperity in inner cities. The four strengths include: strategic location; unmet local demand; available workforce; and integration with regional clusters. Economic progress in inner cities will only come, Porter argues, from recognizing and enhancing these inherent advantages and building on the base of existing companies.cedmay99

Over the next few months, this column will look at each of these competitive strengths in a little more detail.

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Housing Update
March Housing Permits Up 47.9%

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 1,105 new housing units in March 1999, a 47.9 percent increase compared to March of 1998 when 747 were authorized.

The Department further indicated that the 1,105 units permitted in March 1999 represent an increase of 113 percent from the 518 units permitted in February 1999. The year-to-date permits are up 11.3 percent, from 2,131 through March 1998, to 2,372 through March 1999.

"Permit activity is on the upswing, both in terms of the monthly and year-to-date totals," Commissioner Abromaitis said, "This is continued good news for the housing market as we move into the summer months."

Reports from municipal officials throughout the state indicate that Middlesex and Fairfield Counties both with 96.4 percent showed the greatest percentage increase in March compared to the same month a year ago. Tolland County followed with a 57.1 percent increase.

Fairfield County documented the largest number of new, authorized units in March with 330. Hartford County followed with 239 units and New Haven County had 158 units. Stamford led all Connecticut communities with 172 units, followed by Southington with 56 and Middletown with 54.

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Defining Employment
By Salvatore A. DiPillo, Research Analyst Supervisor

We often hear data users express some confusion or misunderstanding about the three employment data series produced by the Department of Labor's Office of Research. In this article, we will attempt to clarify the conceptual differences among them.

Perhaps the most important concept to understand is whether the employment data are providing information regarding jobs or people. The nonfarm employment estimates and the data on workers covered by unemployment insurance are based on employerprovided information about the number of employees on company payrolls during a specified time period. These payroll sources equate employment with jobs. The labor force statistics are based largely on a household survey that identifies whether the residents of the household are working or not and, thus, they reflect the employment status of people. The circumstances under which these data are developed are described below.

Nonfarm Employment from the Establishment Survey

The Current Employment Statistics (CES) survey collects data each month from a sample of about 5,000 nonfarm establishments in Connecticut. From these data, employment, hours, and earnings estimates for the State and labor market areas are prepared and published. Employment reported is the total number of persons on the payroll, full or part time, during any part of the pay period that includes the 12th day of the month.

The nonfarm employment estimates are benchmarked annually to a more complete count of employment. The basic source of benchmark data for the CES survey is data on "all employees" collected as a byproduct of the

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Long-Term Future Of Current Expansion: A Question Mark?

The Connecticut coincident employment index increased, once again, to a new peak with the release of (preliminary) February data. This month's report coincides with the annual benchmark revisions. These revisions generally affect the most recent observations, tending to smooth the more exaggerated movements. Using the newly revised data, the coincident index fell in only two months - August and September - during the last twelve. The coincident index now stands at a level not seen since February 1990 and not too far from its prior peak in February 1989. The Connecticut leading employment index continues to send mixed signals about the future path of the Connecticut economy. The leading index last reached its current high in February 1998. Since then, the index has increased in five months and decreased in the remaining seven months. Over the past six months, the leading index has risen one month and fallen the next. The index rose with the most recent February 1999 estimate. We have carefully monitored the leading index over the past year because its movements have raised some concern about the possibility of an impending slowdown in the Connecticut economy.

If we look at some of the key indicators included the indices, on a positive note, the last twelve months have witnessed a 1.74 percent increase in nonfarm employment, or 28,400, and a 1.69 percent increase in total employment, or 27,700. In addition, the total unemployment rate declined from 3.6 to 3.1 percent, a substantial improvement in the unemployment rate. On the negative side, initial claims for unemployment insurance increased by 8.86 percent in February 1999 over February 1998 while total housing permits fell by 36.31 percent when comparing the same two months.

In summary, the coincident employment index rose from 94.3 in February 1998 to 99.5 in February 1999. All four components of the index point in a positive direction on a year-overyear basis with higher nonfarm employment, higher total employment, a lower insured unemployment rate, and a lower total unemployment rate.

The leading employment index decreased from 92.0 in February 1998 to 89.3 in February 1999. All five index components, once again, sent negative signals on a yearover- year basis with a higher short-duration (less than 15 weeks) unemployment rate, higher initial claims for unemployment insurance, a shorter average work week of manufacturing production workers, lower total housing permits, and lower Hartford helpwanted advertising. This is the second time (last month and this month) since we began reporting the leading index that all five components sent negative signals on a year-over-year basis in the same month. Despite these numbers, the leading index increased this month over last month by a small amount.

SOURCE: Connecticut Center for or Economic Analysis, University of Connecticut. Developed by Pami Dua [Economic Cycle Research Institute; NY,NY] and Stephen M. Miller [(860) 486-3853, Storrs Campus]. Kathryn E. Parr and Hulya Varol [(860) 486-0485, Storrs Campus] provided research support.

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Last Updated: October 15, 2002