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20 HARTFORDBUSINESS.COM | JANUARY 13, 2025 Economic Forecast Stagnation looms for CT economy C onnecticut employment is still below 2008 levels, and only 9,000 up from June 2018. By comparison, the nation has added 10 million jobs since June 2018. The fiscal guardrails, designed for a vastly different budget environ- ment, have sent nearly $8 billion out of the state, while funding for K-12 education falls well below national averages. And UConn, a major economic driver that generates more net new revenue than the state provides in support, faces serious budget cuts and staffing reductions. In the critical arena of data storage and cloud infrastructure, Connecticut is virtually absent, having but 0.68% of the national infrastructure, lagging New Hampshire. In contrast, the healthy econo- mies of Massachusetts and New York each have nearly 5%. The oddity is that Connecticut is home to the largest source of electricity generation in New England (the Millstone nuclear power station), but exports almost 50% of that power, supporting its neighbors' economies. Connecticut has long underin- vested in itself relative to other states and now looks to be paying the price. Even still, there are bright spots. UConn and Yale have grown strongly in the past decade, playing a critical role in preserving Connecticut's economic health. Yale has created three new colleges or schools, is investing heavily in expansion of facilities and recruiting faculty, and — critically — has become a full member of the Massachusetts Green High Performance Computing Center in Holyoke, putting the school at the cutting edge in data analytics and quantum computing. The growth of Yale University and Yale New Haven Health is also driving much new investment in the New Haven region in everything from laboratory space to residential housing, supported by the vibrant expansion of service at Tweed New Haven Airport. Meanwhile, UConn is on track to reach a half billion dollars in funded research. Manufacturing, driven by defense and aerospace, looks to remain Expect slower job/ economic growth in 2025 C onnecticut's economy is affected by the economic policies of the federal government. If the incoming administration imposes high tariff rates, imports will fall and the value of the dollar in world markets will rise, hurting the U.S. export sector. Retaliation by other coun- tries will exacerbate this outcome. Since Connecticut is an export-oriented state, its economy will grow only moderately. Connecticut should experience employment growth in 2025, but not as impressive as in 2024. Connecticut's unemployment rate has recently fluctuated between 3.2% and 3.8%. At such a low rate, to create more jobs (adding more people to the payroll) would require a signifi- cant migration of businesses as well as skilled and professional people into Connecticut. Without the migration, I would expect a net job gain of about 3,000 to 4,000 jobs in 2025. This analysis rests on the expectation that no drastic change will take place at the state level (such as a tax increase). Fred Carstensen Professor, Finance and Economics; Director, CT Center for Economic Analysis University of Connecticut Farhad rassekh Professor of Economics University of Hartford HOW MANY JOBS WILL CT ADD IN 2025? Less than 10,000 HOW MANY JOBS WILL CT ADD IN 2025? 3,000 to 4,000 WHAT'S YOUR 2025 ECONOMIC OUTLOOK FOR CONNECTICUT? No growth WHAT'S YOUR 2025 ECONOMIC OUTLOOK FOR CONNECTICUT? Moderate Growth WHAT WILL CT'S UNEMPLOYMENT RATE BE AT THE END OF 2025? 3.5% WHAT WILL CT'S UNEMPLOYMENT RATE BE AT THE END OF 2025? 4% WHAT TYPE OF GDP GROWTH WILL CT SEE IN 2025? 2.5% WHAT TYPE OF GDP GROWTH WILL CT SEE IN 2025? 2% to 2.5% WHICH INDUSTRY WILL ADD THE MOST JOBS? Tourism and hospitality WHICH INDUSTRIES WILL ADD THE MOST JOBS? Health care and education WHICH INDUSTRY WILL LOSE THE MOST JOBS? Information WHICH INDUSTRIES WILL LOSE THE MOST JOBS? High-tech and insurance strong, though high productivity growth limits job creation and elements of the supply chain have been leaving the state. There are also promising invest- ments to bring professional soccer to Bridgeport as part of a billion-dollar complex and other major residential developments. And federal funding is driving major improvements in critical elements of the state's transportation infrastructure.