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Connecticut Economic Digest: August 1997 issue
Danbury Labor Market Area Thriving | Small Business Advisory Council continues activities | Housing Update | Economic weather bulletin: blue skies with few clouds?

Danbury Labor Market Area Thriving
by Michael H. Zotos, Ed.D., Associate Research Analyst

The Danbury Labor Market Area has been riding the economic wave of prosperity over the past few years. Most of the indicators point to a bright future. This economic success has been achieved as a result of many favorable factors: a highly trained and educated workforce; its location-Fairfield County, 60 miles from New York City and bordering Westchester County, New York; a highly diversified industrial base including chemicals, robotics, telecommunications, finance, medical equipment, optics, pharmaceuticals, computer software and equipment, batteries, relocation firms, and industrial bearings. In addition to its strong manufacturing base, the area accounts for the highest amount of annual retail sales in the state. The Danbury Fair Mall with over 200 stores coupled with numerous shopping centers provides for an employment of over 17,000 workers.

A very low unemployment rate, which historically has ranked as one of the lowest in the state, reflects a very active workforce. In addition, this region ranks very high in relation to average weekly manufacturing earnings in the state. The number of average manufacturing weekly hours worked and average hourly wages also rank near the top.

The educational level of the Danbury Area's population is remarkably high. In a Fortune magazine article dated August 18, l997, the area ranked thirteenth in the country with 13.8% of the population holding a fouryear college degree. Jobs in finance, medicine, engineering and high tech industries require managers, professionals, and technical personnel with strong educational credentials.

Construction is another sector which has grown considerably. Between January 1996 and January 1997, 300 new jobs were added in this industry, a 11.5% increase. New home construction, road building, commercial and industrial construction and improvements accounted for this growth. Companies such as G.E. Capital, H.F.S. Mobility, Bob's Furniture, and Circuit City, will be in need of thousands of square feet of space. These developments will generate new construction, while other areas are to be renovated. A solid infrastructure adds to the allure of the area.

The second highest increase in jobs over the same time period occurred in finance, insurance, and real estate. Approximately 300 jobs were added to this category resulting in a 7.9% spike. With an expanding economy, services in the banking, credit, insurance, and housing areas are needed to support the industrial, commercial, and retail demands. According to the News Times, the area's local newspaper, news reports indicate that within the year over 800 new jobs will be created in the financial, services, and manufacturing sectors. In some cases, the increase is due to the expansion of existing companies while others are due to new companies moving into the area. The Danbury Labor Market Area has been relatively less affected by corporate downsizing and defense cuts when compared to the central and eastern sections of the state. Admittedly, there have been layoffs and plant closings; however, newly created jobs have replaced jobs lost. New employment has been edging up gradually over the past few years. A balance of manufacturing and service related jobs has helped to add stability to the job market and jobs have been added in finance, telecommunications, sales management, health services and education.

One significant development in the city of Danbury is the resurgence of City Center. What was once a slow growth, sluggish retail area, has transformed itself into a business and entertainment center. New restaurants, boutiques, and other small business enterprises have added economic stability to the downtown zone. Some of the start-up capital projects include the expansion of city hall, the creation of a new technology center at the Danbury Library, the possibility of a partnership with the National Hockey League for developing an ice arena on redevelopment property, and the revitalization of the Palace Theater Theater for social and cultural events.

Home sales in Fairfield County between the third quarter of 1995 and the third quarter of 1996 increased 7.9%. Both Danbury and Bethel registered strong sales. Commercial real estate is also at a premium. Corporate expansion, the increase in start-up companies, and new retail outlets are causing a shortage of available property.

Future economic trends look promising for the Danbury Labor Market Area. If the financial and economic indicators continue to remain stable, the region will continue to attract corporate, retail, and service related industries.

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Small Business Advisory Council continues activities

The Governor's Small Business Advisory Council, which became active again in October 1995, has had a busy two years of activity and will continue programs serving Connecticut's Small Business Community. Governor Rowland re-established the Council on October 18, 1995, by Executive Order 7-A, which says that the group will operate within the Department of Economic and Community Development. The Council is a bipartisan, volunteer group of professional men and women involved in small business throughout the State. Its Mission is as follows:

  • To act as a voice for the small business community in bringing their concerns, issues and interests to the Governor's office, the State Legislature and Regulatory bodies;
  • To ensure that small business has appropriate access to services available through State agencies and organizations;
  • To evaluate the performance of State and public agencies and organizations serving the needs of small business;
  • To coordinate with the State's economic development efforts the general promotion of the growth of small business.

The GSBAC has sponsored two very successful prior breakfast forums over the past six months, bringing together over 1,100 small business people in an effort to discuss issues affecting them. Keynote speakers have been featured at these events, including Governor Rowland and Lt. Governor Rell, as well as Mark Stevens, nationally syndicated columnist for The Hartford Courant. Planning is underway for a breakfast forum which will be scheduled in late October involving Governor Rowland and the University of New Haven.

To date, the Council's activities have also included the following: 1) Meeting with various state agency department heads to evaluate specific agency programs and how they impact small business. 2) Meeting with representatives from the Connecticut Development Authority in an effort to represent the end-user of various loan products offered by the State; and 3) Submitting its legislative endorsements to the Governor and State legislators for consideration during the past session.

Other efforts underway are the publishing of a newsletter highlighting issues, programs, etc. which directly address "small business" concerns. The GSBAC newsletter will be distributed to businesses throughout the State. In addition, the Council is in the process of developing a Web site on the Internet to provide information about the Council and its members, as well as information on State agency programs and services available to the small business community and how to access them.

The Council's co-chairmen are Joseph Harpie, Vice President at First City Bank in Newington, and Michael Martinez, President of Martinez & Associates, an information technology firm located in Hartford. From the small business community, Harpie and Martinez are joined by the following additional members of the Council: Lisa Arenberg, Advanced Placement, Inc., Milford; Ralph Biondi, Biondi and Rosengrant; M. Edward Fenton, Fenton Group, Wethersfield; Murray Gerber, Prototype & Plastic Mold Co., Middletown; Mary Gentry, Gentry & Associates, North Haven; Brendan Grady, Dollar Dry Dock, West Hartford; Mark Hyner, Whyco Chromium Co., Thomaston; Thomas Kellogg, Business Lenders, Inc., Hartford; and Carlos Lopez, Luis of Hartford, Hartford.

Also, Bobi Molchan, R.C. Knox and Company, Inc., Hartford; Shaw Mudge, Jr., Shaw Mudge & Co., Shelton; Rosalie Renfrew, Access Research, Inc., Windsor; Thomas Reynolds, Reynolds & Rowella, Ridgefield; Marcia Rogers, Smaller Manufactures Association of CT, Waterbury; Warren Ruppar, Independent Insurance Agents of Connecticut, Inc., Wethersfield; Kenneth Savino, Savino, Sturrock & Sullivan, East Hartford; Edward Seder, Shetucket Iron & Metal Co., Norwich; Carmen Vacalebre, C. Vac Enterprises, Waterbury; and Joel Young, Olympus Industrial, Middletown, Commissioner Peter Ellef, Department of Economic and Community Development, represents the State as a Council member, and Adam Ney, CT Business and Industry association, attends GSBAC meetings as a guest.

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Housing Update
June: housing permits increase

The Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 886 new housing units in June 1997, a 29.5% increase compared to June 1996 when 684 were authorized.

The Department further indicated that the 886 units permitted in June 1997 represent an increase of 6% from the 836 units permitted in May 1997, and that the year-to-date permits are up 32.6% from 3,481 through June 1996, to 4,616 through June 1997.

Reports from municipal officials throughout the state indicate that New Haven County showed the greatest percentage increase in June compared to the same month a year ago: 107.1%, followed by Tolland County with a 30.6% increase.

New Haven County documented the largest number of new, authorized units in June with 292. Hartford County followed with 158 units and Fairfield County had 150 units. East Haven led all Connecticut communities with 87 units, followed by Cheshire with 61, and Danbury with 24.

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Economic weather bulletin: blue skies with few clouds?

Has summer returned to the Connecticut economy? The Connecticut coincident employment index, a barometer of current employment activity, reached another new peak in the current expansion with the release of (preliminary) May data. Since January 1996, the coincident index has not fallen in any month, except in September 1996. What's more, this recent upward movement has been more brisk than the previous movement since the last trough.

Connecticut's leading employment index, a barometer of future employment activity, continued its yo-yo pattern. The index has not moved in the same direction, either up or down, for more than two consecutive months since December 1994. This month, it returned to its peak in the current expansion; last reached in March 1997.

The movement in the coincident index since January 1996 mirrors the stronger employment market. Over the last 17 months, the coincident index expanded by 9.8 percent. Nonfarm employment rose by 46,000, or 2.9 percent, while total employment rose by 39,800, or 2.5 percent. In addition, the insured unemployment rate fell from 3.06 percent to 2.30 percent, or a 24.8 percent decrease, while the total unemployment rate fell from 6.0 percent to 5.2 percent, or an 13.3 percent decrease. All in all, the coincident index forecasts continuing fair weather.

Over the last 17 months, the leading index grew by 8.2 percent. Housing permits rose from 527 to 685, or 30.0 percent. Housing permits did, however, break the 1,000 mark twice - May 1996 and March 1997. The short-duration unemployment rate fell from 1.86 to 1.29 percent, or a 30.6 percent decrease. Hartford help-wanted advertising increased from 33 to 36, or 9.1 percent. The initial claims for unemployment insurance decreased from 20,971 to 15,523, or 26.0 percent. Finally, the average workweek for manufacturing production workers rose from 39.1 to 42.5 hours, or 8.7 percent. Even though the leading index continues to bounce around, the overall trend predicts more sunny, cloudless days in our future.

In summary, the coincident employment index rose from 84.7 in May 1996 to 89.9 in May 1997. All four index components continue to point in a positive direction on a year-over-year basis with higher nonfarm employment, higher total employment, a lower insured unemployment rate, and a lower total unemploymentrate.

In summary, the coincident employment index rose from 84.7 in May 1996 to 89.9 in May 1997. All four index components continue to point in a positive direction on a year-over-year basis with higher nonfarm employment, higher total employment, a lower insured unemployment rate, and a lower total unemployment rate.

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) 486-3022, Storrs Campus] provided research support.

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Last Updated: October 15, 2002