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12 | HARTFORD BUSINESS JOURNAL • DECEMBER 24, 2018 A quick snapshot of what five Connecticut economists and business professors think will happen to the state's economy in 2019. Steven P. Lanza Assistant Professor in Residence, University of Connecticut CT's slow growth will likely continue Connecticut is on track to add more than 15,000 jobs in 2018. That would be the state's best performance since 2011, the first year of the recovery from the U.S. Great Recession. As of October, Connecticut has recovered 90 percent of the jobs lost in that recession. The state will complete that recovery in 2019, if it adds the forecasted 11,000 jobs to its payrolls. The improving employment picture is reflected in Connecticut's low jobless rate, which is on par with rates achieved during the mid-2000s expansion. But today's labor force is bigger than it was then, so the state is setting records for the largest number of residents employed in history. The unemployment rate should continue to inch down next year to 4.3 percent. State GDP growth, however, remains something of a sore spot. At the current pace, real GDP will advance by barely 0.7 percent in 2018. But some growth is better than no growth: The state has posted positive annual GDP growth just twice in 10 years. The modest uptick in 2018 should be coupled with a comparable 0.6 percent increase in 2019. The baseline forecast could gain a boost from some potential economic tailwinds. To date, there appears to be no sign of the U.S. economy flagging — the country could set a record next year for the longest expansion in history. And tight labor markets and rising wages could continue to fuel robust consumer spending. Closer to home, voters' passage of the transportation fund lockbox could make more palatable the prospect of electronic tolling on Connecticut highways and gen- erate the resources that would allow the state to make long-overdue investments in infrastructure. Alternatively, the forecast could be hobbled by potential economic headwinds. U.S. tariffs could prompt retaliatory measures by our trading partners, prompting trade skirmishes, if not an outright war, which would dull GDP growth. The ongoing Fed rate hikes threaten to crimp business investment and the current stock market swoon could deepen further. And there's always the risk that Connecticut's elected officials will once again fail to come to grips with the state's chronic budget shortfalls. Alissa K. DeJonge Vice President of Research, Connecticut Economic Resource Center Inc. Changing demographics will impact CT economy Connecticut's population, after a few years of decline, saw a slight uptick in the most recent numbers released by the U.S. Census Bureau. The population increase was due to natural population growth that was just ahead of net (negative) migration. Since 2010, Connecticut has seen a steady increase of retirement-age population, while the school-age population (below 25 years) and working-age residents (25-64 years) experienced small but steady decreases. The large generation of Baby Boomers continues to retire while the next genera- tion, the Gen Xers, is a smaller age group, which will further reduce the overall level of economic demand and output. The demand decrease should eventually be alleviated by the larger Millennial generation, but in the mid-term, there could very well be a dip in the amount of GDP produced in the state, just because of these demographic shifts. Even though the demographic trends are not particularly favorable for Connecti- cut right now, there are some industries that have seen growth during 2018 and should continue through 2019. One bright spot for Connecticut's economy is defense manufacturing. Demand from the federal government will continue to boost the number of F-35s, Black Hawk helicopters, submarines and other weapons systems made in Connecticut. Another industry that looks extremely promising for Connecticut in 2019 is ener- gy, particularly in alternative energy including wind. This industry has seen growth over the past few years with the installation of household solar, and with the state's increased efforts to add renewable energy to the generation mix. One other industry to watch in Connecticut is wholesale trade and distribution due to the influence of e-commerce. The increasing presence of Amazon in the state is bringing new investments into this industry. One industry that is undergoing a large transition is retail, because of the effect of online shopping. Traditional storefront retailers that remain profitable during this transition will adopt a hybrid approach of retaining less inventory on-site and enhancing the shopping social experience. What's your 2019 economic outlook for Connecticut? Moderate growth How many jobs will Connecticut add? 15,000 What will Connecticut's unemployment rate be at the end of 2019? 4% What type of GDP growth will Connecticut see in 2019? 1% Which industry will add the most jobs? Defense Which industry will lose the most jobs? Retail What's your 2019 economic outlook for Connecticut? Moderate growth How many jobs will Connecticut add? 11,000 What will Connecticut's unemployment rate be at the end of 2019? 4.3% What type of GDP growth will Connecticut see in 2019? 0.6% Which industry will add the most jobs? Health care Which industry will lose the most jobs? Government ECONOMIST SCORECARDS