Hartford Business Journal

www.HartfordBusiness.com December 22, 2014 • Hartford Business Journal 39 Industry Focus E c o n o m i c F o r E c a s t measures of household finances, includ- ing the savings rate, financial-obligation ratio and various measures of credit qual- ity, all suggest that consumers are in a bet- ter position to spend in the coming year. Businesses are also notably more upbeat about the economic outlook going into the new year. Measures of CEO and small business confidence both improved during the second half of 2014 and more businesses plan to increase capital spend- ing and add staff during the coming year than at any other point since the reces- sion ended. Even the construction sector appears headed for better days, with both residential and commercial construction set to post stronger gains in 2015. Connecticut and much of New Eng- land has faced an even more arduous road to recovery than the nation has. Job growth has tended to be slower and over- all economic growth has generally lagged behind the nation in most of the region. Nonfarm employment has risen just 1.4 percent in Connecticut over the past year, which lags behind the nation as whole. Moreover, much of the growth in jobs has been in lower paying industries, including restaurants, retailers, social assistance and administrative jobs. Man- ufacturing continues to struggle with tighter defense budgets and the state's housing sector is still weighed down with legacy issues from the housing bust. The recovery has been strong and more broadly based in the region's major metropolitan areas, particularly Stamford and Boston. Both areas benefit from the resurgence in the financial mar- kets and growth in the asset manage- ment sector. By contrast, the insurance industry has faced a tougher recovery and provided less of a boost to Hartford. Wells Fargo expects conditions to improve in 2015. The U.S. economy appears poised for its strongest growth since the recession ended five and a half years ago. Growth should not only be stronger but also more broadly based, as every segment of the domestic economy (consumer spending, business-fixed investment, homebuilding and govern- ment) making a positive contribution. With growth accelerating, the Federal Reserve will begin to normalize interest rates around the middle of the year and may ultimately raise the federal funds rate by three-quarters of a percentage point. Connecticut should also see growth improve in 2015. Employment growth should improve modestly from its most recent pace, as hiring in financial services and professional services turns up. Wells expects businesses to add close 30,000 jobs across the state in 2015 and look for the unemployment rate to drop by at least a half percentage point to 5.8 percent. n Mark Vitner is managing director & senior economist for Wells Fargo Bank. ▶ ▶ Connecticut employment growth should improve modestly from its most recent pace, as hiring in financial services and professional services turns up. Your business is evolving... is your technology evolving with it? Still Running Windows XP? As of April 8th, Microsoft will no longer support XP. There's still time. Call Walker to learn how this will impact your operations & security, and what options will best serve your organization's short and long-term goals. For more information, contact Joe McGrattan at: (860) 678.3530 x306 or info@thewalkergroup.com Information technology is essential to continuous growth and profitability. Transform your business with custom IT solutions from The Walker Group. www.TheWalkerGroup.com | (860) 678.3530 | info@thewalkergroup.com Network Management IT Security Web Design & Development Cloud Hosting Backup & Disaster Recovery Virtualization IT Staffing Wireless Networks

• Cover