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Connecticut Economic Digest: July 1998 issue
Reconstructing Bridgeport | Industry Clusters | Housing Update | Is There Trouble Brewing In The Economic Clouds?

Reconstructing Bridgeport
By Joseph Slepski, Research Analyst

As the most populous city in the State of Connecticut, Bridgeport not only has an effect on the other twelve towns in the Labor Market Area, but on the rest of the State as well. Its location has always been advantageous. Being on the waterfront enabled Bridgeport to become a major nineteenth century shipping center. The proximity to New York allowed the Area and City to become major players in the expansion of industry that took place during the early twentieth century.

The Rise...

The Bridgeport area has had an admirable history, influenced by its share of colorful characters. For example, the master showman Phineas T. Barnum was born in Bridgeport and boldly developed a circus persona that lives on to this day. Jasper McLevy served as Bridgeport mayor from the late thirties until the early fifties. His legacy includes his stubborn approach to attaining a balanced budget: snow removal was not performed by the City. When asked how people would get about during the winter, the Mayor would say "the good Lord brought the snow, the good Lord will take it away," and this was true - by early May not a snowflake would be found. Folklore has it that many a travelling salesman would set out in November from Portland, Maine and not arrive at his destination of Poughkeepsie, New York until the following April. In truth, the resilient city residents would actually band together and shovel the streets to let the buses pass through.

It was during Mayor McLevy's years that the City bought Seaside Park and turned it into a beachfront amusement park modeled after New York's Coney Island. The City also built what later became Kennedy Stadium. This was the first stadium in the State to have lights and from the 1940ís through the 1980's high school and minor league football was played in this stadium, which also hosted professional boxing and wrestling.

During World War II, Bridgeport was the ball bearing capital of the world as firms in the City and surrounding towns were the major suppliers of ball bearings that were used in production of weapons for the Allied Armies. Many local residents who were not called to war could later boast that they fought the "Battle of Bridgeport" by working in these factories.

The City of Bridgeport had the first television station in the State. When WICC signed on the air in 1952, its first newscaster was Bob Crane, who later became a major television star. Bridgeport also opened the State's first and still only zoo in Beardsley Park.

The 1950's and 1960's were especially good for the City and Area. The construction of Interstate Route 95 linked Bridgeport to the entire east coast. The ìguns and butterî policy of the sixties proved especially beneficial to area firms such as Sikorsky Aircraft and General Electric which provided parts to the defense industry. Education was important in the area as private colleges such as Sacred Heart University, the University of Bridgeport and Fairfield University expanded their base of students. The State also showed its commitment to education by opening Housatonic Valley Community College. Bridgeport was riding a wave of prosperity, but this wave did crash.

...And Fall

Like virtually every large city, Bridgeport would begin to experience a decline in the late 1960's and early 1970's. Increasing use of the automobile and new and improved roads lead people out of the city and into the suburbs. For a period of thirty years from 1963-1993, more than 30,000 people left the city of Bridgeport. During this same time period, 30,000 factory jobs also disappeared. This changed the entire industrial mix of the City. Where in 1963 half of the jobs in the city were in manufacturing, by 1993 only one in every five jobs was in a local factory.

The Labor Market Area was able to hold its own, despite the City's troubles, during the booming economy of the 1980's; however, the beginning of the 1990's proved disastrous for the entire region. The end of the "Cold War" led to drastic cuts in defense spending and the loss of thousands of manufacturing jobs. Large employers such as Sikorsky Aircraft, General Electric, Bryant Electric, Bic, Remington and Allied Signal either eliminated thousands of jobs or shut their doors altogether. During the recession of the early nineties, 22,500 area jobs were lost.

The loss of jobs combined with certain non-economic factors made Bridgeport the butt of many negative comments. The city was entirely different from the ìbustling centerî of twenty years earlier. Seaside Park was in shambles, WICC-TV was defunct, the University of Bridgeport, beset by financial woes, lost the majority of its students when the college was sold to the Reverend Moon, and the City's beleaguered police department struggled with an exploding crime rate. The City of Bridgeport even went so far as to declare bankruptcy in 1990, although the courts would later rule this move to be unconstitutional. The last blow came in 1995 when the State Senate rejected a proposal, backed by the Governor, to have the Mashantucket Pequots build a casino in downtown Bridgeport. The State also rejected a bid by developer Donald Trump to build a Grand Prix racetrack in the City.


In spite of all this, Bridgeport and its surrounding towns have begun to climb back up. The improving State and National economies have allowed for local financial institutions to begin taking certain risks. In the past two years, 4,100 new jobs have been created in the Labor Market Area. Many of these positions are in small, start-up businesses such as restaurants, small stores and other service-oriented firms. More money has been earmarked for better police protection and this has led to a drop in the crime rate and a safer feeling by local residents. Old and dangerous housing projects have been torn down and residents have been moved into newer living quarters. This has led to the creation of many new construction jobs. The school system has been revitalized and the result has been higher scores on the student mastery tests. State and local funds were used to expand the P.T. Barnum Museum and the Beardsley Park Zoo, and both attractions had their highest ever attendance levels in the past year. The city of Bridgeport has even established a Tourism Council to promote various events in the City.

A watershed event occurred last year. When Zurich Reinsurance sought a package of State funds to help finance their move from New York to Stamford, the Bridgeport area legislative delegation balked until the company gave the City ten million dollars. This money was used to finance the construction of a 7,000-seat baseball stadium that now houses the Bridgeport Bluefish of the Atlantic Professional Baseball League. It is expected that a quarter of a million fans will come to Bridgeport this summer to watch baseball. Money is also being used to renovate the waterfront and a new baseball museum is under construction. Fairfield University and Sacred Heart University are both in the midst of major expansion efforts and enrollment is also rising at the University of Bridgeport, which has established the only programs in the entire State for Chiropractic and Naturopathic medicine.

Road To Recovery

The latest efforts to improve the cities and towns in the Bridgeport area appear to be paying off. The population, which declined by 15,000 in the early nineties, has edged up by 2,000 in the last two years and is expected to increase by another 3,000 by the turn of the century. The Labor Market Area has also regained nearly a fifth of the 22,500 jobs lost during the last recession and projections indicate this trend will continue. The unemployment rate, which was in the double digits in both the City and Area, is down to four percent in the Area and six percent in the City. The high cost of living in lower Fairfield County is driving more and more people to residences in the Bridgeport area, where median housing prices are $200,000 lower. The area's proximity to New York and the ease of getting there by either Interstate Route 95, the Merritt Parkway or Metro North Railroad will continue to be a drawing point.

To be sure, there are still many obstacles to overcome: the City of Bridgeport has lost 20,000 jobs in the last eight years alone. Nevertheless, the population is now growing, tourism is increasing and unemployment is going down, and the Bridgeport area is poised for even stronger economic growth.

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Industry Clusters
China Trade Impacts State

On June 18, 1998, a 71- member trade delegation from Shandong Province, China's third largest province, arrived in Connecticut. Governor Li Chunting met Governor Rowland and signed a trade agreement to encourage cooperation and partnerships between businesses in Connecticut and Shandong.

n International sales are increasingly important for Connecticut companies. Recent data show Connecticutís exports to China totaled more than $69 million in 1997. Export trade with key Asian nations amounted to $1.76 billion in 1997, or 23% of the Connecticut total.

A few examples are ABB's (Combustion Engineering) power plants in Shandong. China's plans to build 150 nuclear power plants could result in more jobs in Connecticut. Aetna, the second non-Chinese insurance company licensed to do business in China, could have significant growth opportunities since Shandong is expected to be a leading market. Loctite (Hartford) has recently doubled the size of its plant in Yantai, resulting in increased sales to Asia; and Carvel (Farmington) has a string of 14 ice cream stores in Shandong.

The DECD Industry Cluster/ International Division has trade representatives to provide market counseling, perform agent/distributor searches, and promote Connecticutís trade in Mexico, Argentina, and Brazil, as well as China, and soon Israel.

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Housing Update
May Housing Permits Increase 25.7%

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 1,051 new housing units in May 1998, a 25.7 percent increase compared to May of 1997 when 836 were authorized.

The Department further indicated that the 1,051 units permitted in May 1998 represent an increase of 13.3 percent from the 928 units permitted in April 1998. The year-to-date permits are up 10.2 percent, from 3,730 through May 1997, to 4,110 through May 1998.

"The housing sector continues to demonstrate strong growth," Abromaitis said. "A 10.2 percent increase through the first five months of 1998 is a solid indicator of the economy's overall strength."

Reports from municipal officials throughout the state indicate that Hartford County with 106.3 percent showed the greatest percentage increase in May compared to the same month a year ago. Windham County followed with a 28.6 percent increase.

Hartford County documented the largest number of new, authorized units in May with 330. Fairfield County followed with 243 units and New Haven County had 183 units. Manchester led all Connecticut communities with 152 units, followed by Danbury with 61 and Newtown with 33.

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Is There Trouble Brewing In The Economic Clouds?

Just when the pilot announces that blue skies seem to extend forever, those darned dismal scientists (economists) hoist the warning flag that stormy weather may be on the horizon. Well, in truth, warning flags may be flying from the Connecticut coincident and leading employment indexes. Then, again, the warning may be a false alarm and not a sign of bad things to come. The Connecticut coincident employment index, a barometer of current employment activity, has not moved above its January 1998 peak so far this year. It now falls just below this peak with the release of (preliminary) April data.

Connecticut's leading employment index, a barometer of future employment activity, has experienced small declines in the last two months after reaching its peak in the current expansion in February. As a rule, three consecutive declines in the leading index must occur before forecasters consider it a negative signal; something that the leading index has not yet delivered.

In the Spring 1998 issue of The Connecticut Economy, editor-inchief Will McEachern cites the shrinking labor force as a possible threat to the current expansion. Connecticut's economy will have some difficulty maintaining growing employment with a flat population and a declining labor force. The declining labor force reflects in large part the declining participation rate by males during the 1990s in Connecticut. When push comes to shove, either population will have to start growing, male labor force participation will have to increase, or employment growth will stop. If employment growth halts, then we may face a period of slow growth, or even a downturn, unless rising labor productivity (more product per labor input) rides to the rescue.

While we share McEachern's concern about the sustainability of the current expansion, given the trends in the labor market, we also share his view that it is much too early to call an end to the current expansion. Several more month's data will provide important information. We eagerly await future data releases.

In summary, the coincident employment index rose from 87.7 in April 1997 to 94.4 in April 1998. 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.

The leading employment index rose from 89.7 in April 1997 to 90.2 in April 1998. Three index components sent positive signals on a year-over-year basis with a lower short-duration (less than 15 weeks) unemployment rate, lower initial claims for unemployment insurance, and higher Hartford help-wanted advertising. Two components sent negative signals with lower total housing permits and a shorter average workweek of manufacturing production workers.

SOURCE: Connecticut Center for or 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) 486-0485, Storrs Campus provided research support.

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Last Updated: October 15, 2002