Hartford Business Journal

12 Hartford Business Journal • December 22, 2014 www.HartfordBusiness.com Economy E c o n o m i c F o r E c a s t Scorecard Here is a quick snapshot of what four Connecticut economists and business professors think will happen to the state's economy in 2015. Fred Carstensen Finance and economics professor, UConn; director of the Connecticut Center for Economic Analysis How many jobs will Connecticut add/lose? +28,000 What will Connecticut's unemployment rate be at the end of 2015? 5.8 % What type of GDP growth/decline will CT see in 2015? +3.1% Which industry will add the most jobs? Construction Which industry will lose the most jobs? Manufacturing Major issues that will impact Connecticut's economy in 2015: The most important driver will be bioscience. Connecticut has leaped up the rankings in venture capital per capita, from 39th to ninth, largely on the basis of bioscience startups. Jackson Laboratory, in collaboration with UConn, has already filed for four biomedical patents, secured more than $14 million in research awards, and has many millions more in the pipeline. JAX is filling its research building so fast that it is already planning a second research facility. Yale is also a major contributor, with a strong intellectual prop- erty transfer system and multiple spinoffs from Yale research. The United Technologies Corp. deal has stabilized the aero- space-engineering sector, encouraging companies in the value- chain to expand, and leading to construction of the $450 million Pratt research park. This, with multiple projects in Hartford and other major construction initiatives, will bring vitality to con- struction for the next few years, well above current patterns. The principal threats to achieving moderate-to-strong growth are the continuing stalemate in Washington, resulting in national policies that are manifestly damaging the Ameri- can economy, and the fragility of the global economy, with serious asset bubbles in China and Europe threatening to cre- ate self-imposed recessions. Susan Coleman Finance professor, University of Hartford How many jobs will Connecticut add/lose? +13,000 What will Connecticut's unemployment rate be at the end of 2015? 6.3% What type of GDP growth/decline will CT see in 2015? +1.3% Which industry will add the most jobs? Education/ health care Which industry will lose the most jobs? Financial Major issues that will impact Connecticut's economy in 2015: A number of factors have the potential to impact our state's economy going forward. The first is the continued overall health of the U.S. economy and its recovery from the linger- ing effects of the financial crisis and Great Recession. Related to this is the continued strength of the stock market and the financial sector, which employs a significant number of state residents and generates substantial tax revenues. The prospect of rising interest rates poses a risk, particu- larly to the housing sector, which has still not fully recovered. Although we all know that higher interest rates are coming, rates have been so low for so long that it will still be a bit of a shock when it finally happens; hopefully not enough of a shock to derail the housing recovery. Another issue is an anticipated billion-dollar-plus budget deficit for the coming fiscal year, which will necessitate either spending cuts or yet another tax increase. This relates to the larger issue of our state's ongoing inability to get its fiscal house in order. Global issues and developments will also have an impact. One concern is that the growing strength of the dollar com- bined with economic weakness in the Euro zone will have a negative effect on exports and our manufacturing sector. Beyond that, geopolitical instability in the Middle East poses a growing threat. Fred Carstensen Susan Coleman

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