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
||Duration in Months
|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
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
|Peak, Trough and Current Employment Levels
|Source: U.S. Department ofLabor, Bureau of Labor Statistics
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).
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.
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.
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
Western AreaServices 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
For complete details on the 1998-2008 area
employment projections, visit the Connecticut Department of Labor's Web site
and look for the publication titled "Connecticut Forecast 2008: New
Decade, New Careers".
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
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
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
|* Data are unpublishable due to the changes in reporting.
|Economic Indicators \ Year
|New Housing Permits.
|Retail Sales ($mil.)
For further information on the city of Danbury or other cities and towns in Connecticut,
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
||Average Monthly Employment
||Avg. Weekly Wage
||Transportation & Public Utilities
||Finance, Insurance & Real Estate
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
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 http://www.curenet.org.
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.
Return to Top