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Connecticut Economic Digest: April 2001 issue
Regional Economic Retrospective | Area Employment Projections to 2008 | Town / City Profile: Danbury | Continued Employment and Wage Growth in Third Quarter 2000 | Industry Clusters | Housing Update

Regional Economic Retrospective
By Joseph Slepski, Research Analyst

The year was 1988. Employment was at record levels, and employers were complaining that a labor shortage made it difficult, if not impossible to hire and retain workers. High school students were being paid as much as $8.00 per hour to work entry level jobs that previously were paying minimum wage. Fast forward to the beginning of 2001, the characteristics are eerily similar. Even though the situation appears to be the same, much has happened during this twelve year period of time. From those boom times of the late eighties came the recession of the early nineties which led to the recovery during the mid to latter part of the last decade. To what extent have states recovered? How did Connecticut fare, compared with the other states in the region? This article will compare pre- and post-recession employment levels in Connecticut with the rest of the New England states, as well as New York.


All of the New England states plus New York reached record levels of employment between 1988 and 1989. Similarly, they had all reached their low point by the end of 1992. As the chart below shows, in terms of percentage Massachusetts had the highest rate of job loss in the recession period, 11.6 percent, as did Rhode Island, the smallest of the states. New Hampshire had the second highest rate, with an 11.1 percent loss. Vermont had the lowest rate of job loss, 6.4 percent. The percentages of job losses in the other states were: Connecticut (9.4 percent), New York, the largest of the states (7.0 percent), and Maine (6.9 percent). Most of the seven states in the region suffered losses in the same industry divisions, with construction and manufacturing especially hard hit. Some strength was shown, however, in the services industry division.


By the end of 1992 the tide had turned and by 2000 all states in the region had recovered the number of jobs they lost during the recession. (See table below.) On average, the period of job losses persisted 34 months, while job recovery took 66 months. In general, states took twice as long to regain jobs as it took to lose them. New Hampshire and Vermont took somewhat less time, adding back their jobs the quickest, while Rhode Island's recovery was three times as long as its downturn. Connecticut was the last state in the regions to get back the number of jobs it lost.

As the table on page 3 shows, the highest percentage of net jobs gained as of January 2001, over the end of recession occurred in New Hampshire, where a net employment increase of 20.7 percent took place. The next highest percentage was in Vermont with 14.8 percent, followed by Maine (13.6 percent), Massachusetts (9.1 percent), New York (6.1 percent), Rhode Island (4.3 percent), and Connecticut (2.4 percent). Each of the states in the region was able to achieve their gains by having a strong services sector, along with robust trade, construction, transportation, communications and utilities, finance, insurance and real estate, and government industries.


What brought about the decline? Several factors were at work. The region was historically dependent on manufacturing industries and much of this activity was related to national defense. When the cold war ended defense cutbacks followed, leading to reduced employment levels in the region's factories. The real estate market started to bottom out and this, coupled with the completion of regional projects, led to layoffs in the construction industry. The finance industry was impacted by bank failures leading to the elimination of many jobs.

Employment Peak, Trough and Recovery Dates and Duration
State Dates Duration in Months
Peak Trough Recovery Recession Recovery
Connecticut Feb.1989 Dec.1992 Jan.2000 46 85
Maine. Jun.1989 Dec.1991 Nov.1996 30 59
Massachusetts Dec.1988 Dec.1991 Feb.1998 36 74
New Hampshire. Jan.1989 Jul.1991 Mar.1995 30 44
New York.. Jun.1989 Nov.1992 Oct.1998 41 71
Rhode Island.. Jun.1989 Dec.1991 Sep.1999 30 93
Vermont Jun.1989 Jun.1991 Aug.1994 24 38
Source: U.S.Department of Labor, Bureau of Labor Statistics

Conversely, what has brought about the recovery? The financial markets along with the insurance industries have been enjoying robust growth. The construction industry has rebounded as the healthy economy has led to an increase in building projects. The transportation, communications and utilities sector has also been going through a growth spurt. The healthy economic times have also bolstered the trade sector.

One circumstance remains similar, however. Though a measure of stability has been restored, the manufacturing sector has not gained back the jobs lost during the last decade and it is unlikely that manufacturing employment will ever approach its past level. With the presence of this sector of the economy declining, another sector has made up for the loss. This sector is services, which has become dominant in the region. Professional services, education, computer services, engineering services, entertainment, legal services, tourism and the by-products of the casinos have led to an ever increasing level of jobs for service workers. For most of the region's states, the industry mix now isn't much different than it was in 1988-1989, except for changes in manufacturing and services.

Peak, Trough and Current Employment Levels
State Employment (000s) Percent Change
Peak Trough Jan.2001 Loss Regain Net
Connecticut 1,678.3 1,520.1 1,699.9 9.4 11.8 2.4
Maine. 545.2 507.6 611.8 6.9 20.5 13.6
Massachusetts 3,149.1 2,785.3 3,361.3 11.6 20.7 9.1
New Hampshire. 535.7 476.3 627.8 11.1 31.8 20.7
New York.. 8,277.2 7,697.4 8,706.1 7.0 13.1 6.1
Rhode Island.. 467.1 413.1 478.6 11.6 15.9 4.3
Vermont 263.7 246.7 299.2 6.4 21.3 14.8
Source: U.S. Department ofLabor, Bureau of Labor Statistics

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Area Employment Projections to 2008
By Dana Placzek, Research Analyst

Last month readers of the Digest were given a glimpse of the industry employment projections for Connecticut. However, statewide projections obscure the very real differences among regional economies. Here then is a whirlwind tour of our industry employment projections for substate areas. The industries highlighted are those that are projected to grow the most in terms of actual employment over the 10-year projection period from 1998 to 2008. In developing area projections, the State is divided into five "Projection Areas" (see map), which are combinations of Labor Market Areas (LMAs).

Capital Area

The Capital Area is comprised of the Hartford LMA. Total employment in the Capital Area is expected to grow 9.6 percent, roughly the same as the statewide growth rate of 9.7 percent. This growth will be dominated by the services sector, especially business services, growing 34 percent, and health services, projected to increase 16 percent. Also in the top five industries is insurance carriers, long considered a mainstay of the Hartford economy, which is expected to grow 8 percent.

Eastern Area

The Eastern Area, a combination of the Danielson, New London, and Lower River LMAs, will have two fast-growing sectors: services and nondurable manufacturing. The growth in manufacturing, due primarily to pharmaceuticals manufacturing, bucks the general trend for the State. This growth is projected to be 37 percent, and is driven by Pfizer's continued expansion. The expansion of the casinos is pushing the growth of recreation services, which should increase 28 percent. Overall the growth in the Eastern Area is the greatest of the five areas, 13.3 percent over the ten year period to 2008.

South Central Area

Services also dominate growth in the South Central Area (New Haven LMA). Health services are expected to increase by 23 percent; this industry currently makes up about 10 percent of total employment for this region. Also expected to have healthy growth is business services, with an increase of 28 percent. Total employment should grow 10 percent. As is the general trend in manufacturing, durable goods manufacturing employment is expected to decline about 5 percent.

Southwestern Area

The Stamford and Bridgeport LMAs make up the Southwestern Area. In contrast with the growth sectors of the other areas, finance, insurance, and real estate will be the growth sector in the Southwestern Area, predominantly in securities and commodities and in holdings and investments, at least in terms of growth rate. Security and commodity brokerage jobs are projected to grow by a whopping 55 percent, and holdings and investments jobs by 43 percent. This will be supplemented with strong growth in business services of 32 percent and health services of 19 percent, which numerically will have greater growth. In total, a growth rate of 10.3 percent is forecast for this area.

Western Area
Services also dominate in the Western Area, specifically business services, which is expected to grow 34 percent; health services, 19 percent (although this sector will see the greatest growth in actual numbers of jobs); and social services, 33 percent. The Western Area, composed of the Danbury, Waterbury, and Torrington LMAs, should see overall growth of 10.5 percent.

For complete details on the 1998-2008 area employment projections, visit the Connecticut Department of Labor's Web site at, and look for the publication titled "Connecticut Forecast 2008: New Decade, New Careers".

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By Michael H. Zotos, Ed.D., Associate Research Analyst


Danbury, nestled in the foothills of the Berkshires, bordering New York State, and midway between New York City and Hartford, continues to maintain a very healthy level of economic prosperity. The city has been gifted with a very diversified industrial base, a well-trained and educated workforce, and a thriving retail sales environment. Known as the "Gateway to New England," Danbury is intersected by Interstate 84 which goes east and west and Route 7, north and south.


The saying "Danbury Crowns Them All" had great relevance during an era when the city was dominated by manufacturers producing men's and women's hats. This industry was decimated by the 1960s when the public decided that wearing a hat was no longer stylish or necessary. Fortunately there were other companies that provided not only a base for the future but also prevented an economic downturn that was common to similar cities in Connecticut. Producers of industrial bearings, medical supplies and equipment, machine tools, chemicals, and others played a significant role during this period. Organizations such as the Chamber of Commerce, the Danbury Industrial Corporation, and a city government concerned with economic development also provided incentives.

Today, the city is home to such major corporations as Union Carbide, Praxair Inc., Ethan Allen and ATMI Corp., as well as one of the largest shopping malls in New England with over 200 stores under one roof. As the table below shows, Danbury's unemployment rate is at a ten-year low, and while the labor force shows signs of declining slightly since 1990, the population has increased somewhat over the period to 67,000. Retail sales and sales tax contributions are the highest in the State, and the number of new housing permits increased to a high of 926 in 1998. A surge in new rental units, including luxury and senior housing, filled a void for apartment seekers in the area.

Many of Danbury's jobs are concentrated in the services, manufacturing, and retail trade sectors. All of these industries have been solid and reliable economic generators over the years. They provide a healthy variety and balance of jobs while history has proven that they have been stable through various economic peaks and valleys. The services sector generated the highest employment among the three. The health services industry led the way followed by education (including colleges), help supply, and social services.

As the table shows, average wages paid to workers employed in Danbury increased by 36 percent between 1992 and 1999. The highest increases were posted in finance, insurance, and real estate (+61%) and manufacturing (+52%). Manufacturing and finance, insurance, and real estate wages ranked among the highest in the State.


To date, Danbury has not yet seen evidence of the slowdown in the national economy. Existing companies and retail establishments have managed to retain a solid base in the community. Layoffs and shutdowns have been minimal. New business startups and aggressive recruitment for new industries have been ongoing. The opening of a new state of the art ice hockey center will be completed soon in the downtown area. Restaurants, hotels, and entertainment industries are prospering. The availability of housing is at a premium.

Despite sluggish growth in some high tech industries, the demand for optical and medical equipment, telecommunications, printing and publishing, office equipment, software, robotics, pharmaceuticals, chemicals, and consumer goods will be strong.

Danbury City Trends
1992 1998 1999
Industry Units Jobs Wages Units Jobs Wages Units Jobs Wages
Total 2,398 42,289 $31,869 2,401 44,355 $42,116 2,428 44,243 $43,311
Agriculture 33 167 $21,237 41 237 $26,144 39 192 $27,237
Construction 244 966 $34,198 225 1,421 $40,555 238 1,515 $43,159
Manufacturing.. 147 12,294 $43,644 136 10,603 $62,343 137 10,333 $66,325
Trans./Comm./Utilities. 83 1,134 $29,057 99 1,483 $37,947 91 1,332 $40,119
Wholesale Trade 189 1,511 $38,936 183 1,678 $56,833 183 1,790 $51,707
Retail Trade.. 645 9,852 $15,305 585 9,691 $19,791 584 9,477 $20,755
Finance/Ins./Real Estate.. 182 2,095 $39,535 199 3,069 $62,578 200 3,401 $63,535
Services 815 10,289 $29,818 884 12,359 $35,236 909 12,134 $36,301
Federal Government. 8 893 $34,996 7 575 $45,989 8 558 $48,276
State Government 17 912 $40,330 * * * 13 1,295 $31,975
Local Government 23 2,162 $34,237 22 2,087 $42,477 22 2,205 $41,635
* Data are unpublishable due to the changes in reporting.

Economic Indicators \ Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Population. 65,585 65,571 65,383 65,592 65,048 65,249 65,316 65,429 65,829 66,965
Labor Force. 38,697 38,841 39,629 37,872 36,475 36,157 35,888 35,918 35,764 35,409
Employed. 36,744 36,267 36,707 35,587 34,527 34,474 34,114 34,330 34,718 34,384
Unemployed. 1,953 2,574 2,922 2,285 1,948 1,683 1,774 1,588 1,046 1,025
Unemployment Rate.. 5.0 6.6 7.4 6.0 5.3 4.7 4.9 4.4 2.9 2.9
New Housing Permits. 67 89 132 123 112 84 59 238 926 321
Retail Sales ($mil.) 982 865 1,171 2,748 2,941 3,057 3,297 3,719 4,060 4,239

For further information on the city of Danbury or other cities and towns in Connecticut, visit

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Continued Employment and Wage Growth in Third Quarter 2000
By Edward T. Doukas Jr., Research Analyst

Recently released preliminary figures show that during the third quarter of 2000 (3Q00) Connecticut's unemployment insurance (UI) covered employment grew by 22,856, an increase of 1.4 percent over the same period of the previous year (see table below). The 3Q00 employment total was the highest on record for the period and marked the eighth consecutive increase in third quarter employment. However, the over-the-year increase was below the 2.0 percent growth of the previous year, and was the lowest third quarter increase since the period of 1994-95. Private industry employment rose 1.3 percent while employment in the government sector expanded 2.2 percent.

The average weekly wage figure for Connecticut workers rose to $817 during 3Q00, up 5.0 percent from the previous year's $778. The average private sector wage grew 5.5 percent to $825 from $782 a year earlier, while the average wage for government sector workers showed a much smaller increase to $756 from $746, up 1.3 percent.

ConnecticutUI Covered Employment and Wages for Third Quarter 1999 and 2000
Industry Reporting Units Average Monthly Employment Avg. Weekly Wage
3Q 1999 3Q 2000 %Chg 3Q 1999 3Q 2000 Chg %Chg 3Q 1999 3Q 2000 %Chg
Total 106,807 108,558 1.6 1,648,186 1,671,042 22,856 1.4 $778 $817 5.0
Total Private 103,117 104,894 1.7 1,456,801 1,475,449 18,648 1.3 $782 $825 5.5
Agriculture 2,714 2,747 1.2 20,229 20,261 32 0.2 $466 $472 1.3
Mining.. 68 69 1.5 855 864 9 1.1 $1,049 $973 -7.2
Construction.. 10,257 10,423 1.6 64,812 68,784 3,972 6.1 $808 $830 2.7
Manufacturing 6,007 5,965 -0.7 265,735 262,044 -3,691 -1.4 $1,054 $1,117 6.0
Transportation & Public Utilities 3,406 3,397 -0.3 74,455 76,742 2,287 3.1 $877 $866 -1.3
Wholesale Trade.. 10,175 10,470 2.9 82,487 83,390 903 1.1 $1,028 $1,066 3.7
Retail Trade. 19,618 19,552 -0.3 277,456 281,704 4,248 1.5 $416 $427 2.6
Finance, Insurance & Real Estate 9,266 9,587 3.5 141,109 142,742 1,633 1.2 $1,200 $1,359 13.3
Services.. 41,151 42,210 2.6 528,906 538,093 9,187 1.7 $682 $717 5.1
Total Government 3,690 3,664 -0.7 191,384 195,594 4,210 2.2 $746 $756 1.3
Federal Government.. 572 589 3.0 22,253 23,057 804 3.6 $796 $887 11.4
State Government.. 800 787 -1.6 61,791 62,814 1,023 1.7 $872 $822 -5.7
Local Government 2,318 2,288 -1.3 107,340 109,723 2,383 2.2 $662 $691 4.4

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Industry Clusters
BioScience Update

Connecticut United for Research Excellence, Inc. (CURE) in March released its Sixth Annual Economic Report. It reported that total BioScience-related research and development (R&D) expenditures grew by 15 percent in the State during 2000 to $3.05 billion. Employment, including biotechnology and pharmaceutical companies, plus the academic segment, now totals over 16,000. The average salary in R&D positions is now more than $63,000, nearly 20 percent higher than the previous year. 

The Cluster is also growing in size. This year's report included data from 16 biotechnology companies plus five pharmaceutical companies, whereas last year's report included only eight biotechnology companies. 

Looking at the biotechnology, pharmaceutical, and academic institutions separately, CURE noted that the biotech companies increased R&D spending 46 percent to $226 million. On the pharmaceutical side, spending increased 14 percent to $2.4 billion, and academic institutions boosted spending 10 percent to $391 million. 

Occupied laboratory space within the cluster also grew during 2000 by 479,329 square feet, or 11 percent. In the last five years overall, lab space has increased 2,075,092 square feet, or 77 percent. 

Founded in 1990, CURE has been, since 1998, the organizational center of Connecticut's BioScience Cluster. More information about the cluster can be obtained at the CURE Website

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Housing Update
February 2001 Housing Permit Activity

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development today announced that Connecticut communities authorized 706 new housing units in February 2001, a 39 percent increase compared to February of 2000 when 508 units were authorized.

The Department further indicated that the 706 units permitted in February 2001 represent a decrease of 16.8 percent from the 849 units permitted in January 2001. The year-to-date permits are up by 18.6 percent, from 1,311 through 2000, to 1,555 through February 2001.

Stamford Labor Market Area documented the largest number of new authorized units in February with 276. Hartford Labor Market Area followed with 156 units. Four out of ten labor market areas showed increases in new housing authorizations compared to a year ago. Stamford LMA showed the largest gain of 234 units. Norwalk led all Connecticut communities with 248 units, followed by North Haven with 23 and Hamden with 17.

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Published by the Connecticut Department of Labor, Office of Research
Last Updated: October 25, 2002