Hartford Business Journal

www.HartfordBusiness.com December 22, 2014 • Hartford Business Journal 13 Economy E c o n o m i c F o r E c a s t Steven Lanza Assistant economics professor in-residence, University of Connecticut How many jobs will Connecticut add/lose? +17,000 What will Connecticut's unemployment rate be at the end of 2015? 5.7% What type of GDP growth/decline will CT see in 2015? +2% to 2.5% Which industry will add the most jobs? Accommodation and food services Which industry will lose the most jobs? Financial services Major issues that will impact Connecticut's economy in 2015: While I expect moderate growth to continue in Connecticut during 2015, the state will still face its share of challenges, not the least of which is making its own ends meet. Latest esti- mates show a deficit nearing $100 million this year, with $1 bil- lion-$2 billion deficits in each of the next several fiscal years. At worst, the expected shortfalls are half what the state faced four years ago when Democrats gained the statehouse and retained the General Assembly, but Republican legislative pickups in this fall's election should ensure a lively debate next year over public policy options and priorities. The U.S. economy is the biggest single driver of Connecticut's economy, so much of what happens here also depends on how well the rest of the country is doing. The good news is that the U.S. economy appears to be pick- ing up steam. Jobs are climbing, output is growing, and oil and gas prices are plummeting, giving consumers the equivalent of a massive tax cut, which should help boost spending among increasingly buoyant households. The bad news is that President Obama and Congress are headed on collision courses, our European trading partners are treading water, and Japan is in recession. Exports are as impor- tant to Connecticut as to the rest of the nation, so a slowing world economy will stir up headwinds in the Nutmeg State. Bharat Kolluri Economics professor, University of Hartford How many jobs will Connecticut add/lose? +15,000 What will Connecticut's unemployment rate be at the end of 2015? 6.4% What type of GDP growth/decline will CT see in 2015? +2% Which industry will add the most jobs? Health care, information technology services and real estate Which industry will lose the most jobs? Some manufacturing sectors Major issues that will impact Connecticut's economy in 2015: Connecticut's economy will improve although at a slower pace lagging behind the U.S. economy in terms of employ- ment, economic growth and other indicators. The U.S econ- omy seems to be recovering well on its way to pre-Great Recession levels and this will definitely improve the over- all economic conditions in Connecticut for businesses and households in 2015. Connecticut's economy will also experience higher cost of living due to higher expected inflation and upward trend in the interest rates of the overall economy. More specifically, the costs of health care, housing and transportation are expected to increase among others. This combination may affect the costs of production and hiring. In addition, like many other states, Connecticut may face a shortage of skilled and highly qualified labor. Steven Lanza Bharat Kolluri

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