Hartford Business Journal

8 | BOOK OF LISTS 2020 Steven P. Lanza Associate Professor in Residence, Economics University of Connecticut Slower U.S. economy will drag down CT in 2020 Connecticut will likely end 2019 having gained 6,000 jobs for the year. Even so, the state will still come up 3,000 jobs short of its 2008 high-water mark of 1,699,000 jobs, measured on an annual basis. And there is no guarantee it can cross that threshold in 2020 either. Jobs are only forecasted to grow by 3,000 next year. Like jobs, Connecticut's GDP is struggling to rescale previous heights. State GDP is on track to increase 1.6 percent in 2019, but by just 0.4 percent in 2020. The real value of output produced in Connecticut remains nearly 5 percent below the previous business cycle peak. The number of state residents employed, by contrast, is at an all-time high. In 2019, an average of 1,845,000 residents who were in the labor force held jobs. That's up by 70,000, or 4 percent, from 2008, at the crest of the last business cycle. The number employed can exceed the number of jobs because the former includes those who are self-employed or working out of state. And the high employment count helps to explain why wages and salaries are 20 percent higher now than in 2008, why the jobless rate has dropped to 3.7 percent, and why it should inch down further to 3.6 percent next year. Connecticut's lackluster 2020 prospects are predicated on an anticipated slowdown in the U.S. economy next year. And President Trump's trade war is hobbling state exporters: Connecticut ex- ports have dropped nearly 20 percent, or by more than $800 million, in just over a year. Still, there are some bright spots. Electric Boat is mounting a huge new investment in its Groton facility ahead of its production of the Navy's next-generation Columbia-class submarine. The state Department of Energy and Environmental Protection has made a major foray into renewable energy generation by awarding Deepwater Wind a contract to build a 200-megawatt offshore wind farm near Block Island. And the state's world-class educational and healthcare facilities will continue to be a source of growth for years to come. Alissa K. DeJonge Vice President of Research, Connecticut Economic Resource Center Inc. Shifting population, workforce trends will impact CT's economy in 2020 Connecticut's population is just below 3.6 million. Recent (2013-2017) mi- gration patterns are somewhat counterbalancing Connecticut's aging trend, as more children (ages 17 and under) and working-age residents are moving to the state than are leaving. However, more college-age and retirement-age residents are leaving than are moving to Con- necticut. There is still a large segment of retirement-age population in Connecticut, and they are behind much of the demand for healthcare services. In addition to these demographic trends, technological advances abound and are affecting the economy in numerous ways. For instance, an increasing number of processes are becoming au- tomated — such as self-checkout kiosks in many retail locations and algorithms that personalize marketing messages to potential consumers. Automation will continue to disrupt labor markets in more industries, having workforce impli- cations. However, there can also be an opportunity for Connecticut's software companies to thrive because of the increasing demand for services. Another trend that is affecting the entire economy is the ability to process more data more quick- ly. The way each of us has portable computers at our fingertips in the form of smartphones is one trend, and companies are using more complex data systems to find more efficient ways to promote products. Much data is being generated and data storage has increasing importance. Consumers and the workforce are data-savvy, and companies are using data to stay ahead in terms of understanding their markets. There are opportunities for fintech and insurtech companies to expand their markets in Connecticut. The greater use of advanced materials in manufacturing processes is an industry trend that has tremendous opportunity for the advanced-manufacturing sector in Connecticut. The state has several companies that are part of the advanced-manufacturing supply chain and can apply these materials to new innovations and to enhance other processes. The retail industry continues its transition because of the effect of online shopping. Traditional storefront retailers that remain profitable will adopt a hybrid approach of retaining less inventory on-site and enhancing the shopping social experience. A quick snapshot of what five Connecticut economists and business professors think will happen to the state's economy in 2020. ECONOMIST SCORECARDS 2020 CT projected job growth? 2020 CT projected job growth? Moderate Growth Moderate Growth 7,500 3,000 3.5% 3.6% 1% 0.4% Health Services Education & Health care Retail Trade, transportation & utilities 2020 GDP growth? 2020 GDP growth? 2020 job gains? 2020 job gains? Industry to add most jobs in 2020? Industry to add most jobs in 2020? Unemployment rate by end of 2020? Unemployment rate by end of 2020? Industry to lose most jobs? Industry to lose most jobs?

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