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Connecticut Economic Digest: January 2006 issue
The 2006 Economic Outlook: New Year, New Optimism | Occupation profile: Automotive Service Technicians And Mechanics

The 2006 Economic Outlook: New Year, New Optimism
By Laura Jaworski, Trade Specialist/Research Analyst, and W. Michael Regan, Community Development Assistant Administrator, DECD

The New Year's fresh start brings with it a renewed sense of opportunity and optimism for the 2006 Connecticut economy. Leading economic indicators forecast a State economy that will continue to slowly grow on a path to recovery from the national recession that hit over four years ago. A review of several key factors follows.

Gross State Product

The most important indicator of Connecticut's economic performance is Gross State Product (GSP), the total dollar value of all final goods and services produced in the State. There is an approximate two-year lag in the State GSP data released by the Bureau of Economic Analysis. The Connecticut GSP for 2004 was $185 billion. Connecticut's GSP grew 4.5% between 2003-2004, above the national GSP growth of 4.3% during this time period, and significantly greater than the State's average annual GSP growth rate of 2.1% logged between 1997-2003. As the State's GSP trend has been upward, this is an encouraging positive in the Connecticut economic forecast.

Nationally, the U.S. Gross Domestic Product (GDP) grew 4.3% in the third quarter of 2005, the best performance in over a year, and considerably higher than the 3.3% GDP increase logged in the second quarter. Such growth indicates an overall healthy economy.


In recent years, Connecticut's population growth has been among the lowest in the U.S., leading to slow growth in the State's labor force, a constraint to job expansion, which is not easily rectified in the short-term. According to the U.S. Census Bureau, Connecticut's population increased 2.9% between April 2000 and July 2004, versus national growth of 4.3% during that time. Connecticut's population topped 3.5 million for the first time in 2004. Annual gains of 0.5% are forecasted to 2008, with the State adding between 15,000-26,000 persons on average during 2005-2008. A growing population, albeit small, coupled with the State's highly educated and skilled workforce, is a boon to the Connecticut economy.


The State avoided a potentially catastrophic employment loss when the Base Realignment and Closure Commission (BRAC) removed the U.S. Naval Submarine Base in Groton from the Pentagon's military realignment and closure list. The closure of both, along with the sub base's concomitant impact on Electric Boat, would have devastated the State's projected employment growth.

Connecticut's job losses during the recession began earlier and were more prolonged than national job losses. The State lagged most of the nation coming out of the recession, and won't recover all of the 61,400 jobs it lost from July 2000-September 2003 until April 2007, however a recent FDIC report for Fall 2005 states that Connecticut currently ranks 26th in the nation for job growth, which is up from previous quarters - indicating that Connecticut is moving, albeit slowly, in the right direction. Data from the New England Economic Partnership (NEEP) forecast indicates that Connecticut will add approximately 18,200 positions in 2005. State job growth will continue at a steady pace with 17,600 jobs added in 2006. Top sectors of job creation are expected to include professional services, education and health services and leisure and hospitality. Another employment bright spot is the financial services sector, which will strengthen the State's reputation as a prime location for global financial transactions. The Royal Bank of Scotland's recent decision to locate and expand its U.S. operations in Stamford is a clear example of this sector's growth potential in the state. Manufacturing should hold steady in 2006.

Since May 2005, Connecticut's unemployment rate has been above the national rate for the first time since mid-1997. This is a point of concern in otherwise positive employment indicators. Connecticut's unemployment rate is forecasted by NEEP to remain in the low 5% range annually through 2009. The national unemployment rate is currently 5.0%.

Personal Income

Employment growth equates to income growth. According to the NEEP forecast, nominal personal income data for Connecticut reveals that in 2004 the State had the highest per capita personal income in the U.S. at $45,398, versus a national average of $32,937. This State figure grew by 5.6% from 2003 (versus a national growth of 4.7%), and is expected to grow 5.5% in 2005 and 5.8% in 2006, acting as a positive force in the growth of consumer spending, which translates to greater consumer confidence. This is significant, as spending marks the largest contribution to the GDP.

Energy Costs

A potential factor to slow growth and spending in 2006 are the energy costs associated with higher gasoline, home heating oil, natural gas and electricity prices. Higher energy costs will place a greater burden on Connecticut businesses and consumers, acting as an indirect tax and thereby reducing disposable income and discretionary spending. According to NEEP data, the higher combined costs of gasoline and heating could raise energy expenditures by $1,700 for the average household. Businesses will feel these costs as they power machinery to manufacture goods, run computers, etc. These costs appear to be a part of the economic forecast for at least the next six to twelve months.


NEEP projections estimate that housing permits will increase 0.8% to 11,935 in 2005, up from 11,837 in 2004. As mortgage rates rise along with land and construction costs, permits are projected to decrease to 11,442 in 2006 and 9,606 in 2007. Such a decrease is modest.

Despite increasing mortgage rates, Connecticut's existing home sales market is also expected to be strong. Sales figures in 2005 are projected to increase by 2,700 units from 2004 to 56,800, while sales of existing homes are projected to be 52,000 in 2006, as the average price continues to rise through 2009. As in the rest of the country, Connecticut's construction and housing markets continue to be hot sectors. New U.S. home sales hit a record in October, rising 13%, the most recent month for which data is available.

Federal Reserve and Interest Rates

As mentioned above, interest rates impact the housing market. The Federal Reserve is likely to continue gradually raising interest rates. According to, the Federal Reserve is on an inflation-fighting offensive, and projects that in addition to rising mortgage rates, the Federal Funds rate (the interest rate on 10-year Treasury Bonds) will increase in 2006. According to forecasts, mortgage rates are expected to rise to 6.71% in 2006, and average 7.0% annually between 2006-2009.


Exports increase a state's GSP and lead to job creation. In 2004, Connecticut registered $8.56 billion in exports, up from $8.14 billion in 2003. Year-to-date third quarter 2005 figures from the World Institute for Strategic Economic Research (WISER), the most recent available data, indicate that Connecticut exports are up 11.54% over the same time last year. Top export sectors continue to be transportation equipment and optical and medical instruments. As in the past, Canada continues to be Connecticut's top export destination. Growing Connecticut export markets to watch include Belgium, Brazil, China, Malaysia and the Netherlands.

Although Connecticut is a small state geographically, the State's export sector is sizable, and outperforms national export figures. According to a recent report prepared for the Eastern Trade Council, Connecticut's trade value in dollars increased 40% between 1996-2004, while the U.S. figure increased 31% over the same time. Connecticut's continued growth in exports is a positive for the State's economy.

International topics to monitor include the national trade deficit, future bilateral trade agreements, energy imports as a result of the Gulf Coast hurricanes, and Chinese currency valuation issues. The growth in Connecticut's exports however, is a double-edged sword in that it makes Connecticut's economy more susceptible to international pressures. A volatile global market place could easily translate into increased volatility in Connecticut's economy.


Over all, the economic outlook for 2006 is one of optimism. Positive indicators and slow to moderate growth in GSP, employment, personal income and exports, signal continued economic recovery. Growth will be slow and uneven and high energy costs, the economic fall out from hurricanes Rita and Wilma, the continuing war in Iraq, and increasing producer costs will work to further constrain growth, however the U.S. economy has proven to be very resilient in recent years and positive signs outweigh negative ones for Connecticut. All in all, the emerging picture for 2006 is encouraging.

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Occupation profile: Automotive Service Technicians And Mechanics
By Jungmin Charles Joo, Associate Research Analyst, DOL


Anyone whose car or light truck has broken down knows the importance of the jobs of automotive service technicians and mechanics. They diagnose, adjust, repair, or overhaul automotive vehicles. The ability to diagnose the source of a problem quickly and accurately, a most valuable skill, requires good reasoning ability and a thorough knowledge of automobiles. Many technicians consider diagnosing hard-to-find troubles one of their most challenging and satisfying duties.

Nature of the work

The work of automotive service technicians and mechanics has evolved from mechanical repair to a high technology job. Technicians must have an increasingly broad base of knowledge about how vehicles' complex components work and interact, as well as the ability to work with electronic diagnostic equipment and computer-based technical reference materials.

About half of automotive service technicians work a standard 40-hour week, but almost 30 percent work more than 40 hours a week. Many of those working extended hours are self-employed technicians.


In Connecticut, 8,940 were employed as automotive service technicians and mechanics in 2004. Nationally, they held about 662,840 jobs. The top five states with the highest concentration of workers in this occupation were Delaware, North Dakota, Arizona, Vermont, and Pennsylvania.

The majority worked for automotive repair and maintenance shops, automobile dealers, and retailers and wholesalers of automotive parts, accessories, and supplies. Others found employment in gasoline stations; home and auto supply stores; automotive equipment rental and leasing companies; Federal, State, and local governments; and other organizations. About 16 percent of service technicians were self-employed, more than twice the proportion for all installation, maintenance, and repair occupations.

Training and other qualifications

Automotive technology is rapidly increasing in sophistication, and most training authorities strongly recommend that persons seeking automotive service technician and mechanic jobs complete a formal training program in high school or in a postsecondary vocational school. However, some service technicians still learn the trade solely by assisting and learning from experienced workers.

Employers increasingly send experienced automotive service technicians to manufacturer training centers to learn to repair new models or to receive special training in the repair of components, such as electronic fuel injection or air conditioners.

Voluntary certification by the National Institute for Automotive Service Excellence (ASE) has become a standard credential for automotive service technicians. Certification is available in 1 or more of 8 different service areas, such as electrical systems, engine repair, brake systems, suspension and steering, and heating and air conditioning. For certification in each area, technicians must have at least 2 years of experience and pass a written examination. Completion of an automotive training program in high school, vocational or trade school, or community or junior college may be substituted for 1 year of experience.


The national average annual wage for automotive service technicians and mechanics was $34,760, while Connecticut's was higher at $38,251 in 2004. The top five paying states for this occupation were Alaska ($45,110), Delaware ($43,040), California ($40,310), Massachusetts ($39,870), and District of Columbia ($38,940). As the chart shows, the earnings among the regions of the State ranged from $34,188 in the Bridgeport Labor Market Area to $45,658 in the Danbury Labor Market Area.

Job outlook

Job opportunities in this occupation are expected to be very good for persons who complete automotive training programs in high school, vocational and technical schools, or community colleges. Persons with good diagnostic and problem-solving skills, and whose training include basic electronics skills, should have the best opportunities. Automotive service technicians and mechanics must continually adapt to changing technology and repair techniques as vehicle components and systems become increasingly sophisticated.

Nationally, employment of automotive service technicians and mechanics is expected to grow by 12 percent, which is about as fast as the average growth for all occupations through 2012. In Connecticut, it is also expected to grow by 12 percent, adding nearly 400 openings each year.

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Published by the Connecticut Department of Labor, Office of Research
Last Updated: January 9, 2006