Mainebiz

V O L . X X I I I N O. I JA N UA R Y 9 , 2 0 1 7 14 Q: What are some areas of growth in Maine? Amanda Rector: ere have been intriguing devel- opments lately in the entire range of food and bever- age-related industries in the state — everything from farming, aquaculture, food production, breweries and distilleries, restaurants and more. Maine was well- placed to take advantage of the increased interest in high-quality, locally sourced and sustainable foods. e state also saw a stellar summer tourism season, led by continued low gas prices, a stronger national economy and good weather, although the lack of rain hurt farmers this year. Regionally, the southern parts of Maine continue to see the strongest growth in the state, as industries in other parts of the state have been harder hit by population loss, high energy prices and structural changes in the economy. John Traynor: e health sciences-services area is very strong in Maine already so leveraging that strength is probably the path of least resistance. Many munici- palities around New England are building research corridors alongside their leading hospitals to foster companies involved in pioneering medical research. Maine has tremendous public and private colleges and universities. Holding on to those graduates should be a top priority. Creating the entrepreneurial environ- ment to foster business startups may result in the next Google being based in Maine. Jonathan Reisman: I don't expect much overall growth in Maine's economy next year. Inertia would suggest a continuation of the past lagging and anemic growth amid sectoral and geographic redistribution. e national economy will be buoyed by increased economic freedom from regulatory relief and tax reform, but crony capitalism and protectionism will likely temper those gains. Maine's economic freedom and economy will be damaged by successful referenda raising the minimum wage and taxing the rich. Rachel Bouvier: In my line of work, I see sev- eral trends that excite me: the surge in interest in renewable energy, the innovation that's occurring in Maine surrounding the wood products industry and growth in local, sustainable farming, including aquaculture. Maine's comparative advantage is its natural capital — land, forests, water. e struggle will be how to harness that natural capital in a way that doesn't jeopardize future growth. Charles Lawton: To me, the overriding concern is we can't fill everything we have. If you look at the U.S. Department of Labor 10-year projections, we can't even fill the replacement jobs. Even if you take one of the hardest hit industries, the paper industry, how are we even going to make the paper and fill the jobs we have left? at relates to labor-force participation. e number of workers, particularly 25- to 55-year- old males, is dropping. Many are not even looking for work. at speaks a great deal about the situation. People are out there, but it's not just putting an ad in the paper. HR people use the term 'talent acquisi- tion.' You can't walk down a street without seeing 'help wanted' signs. With minimum wage, the cow's out of the barn. People are already paying more, and not just in wages. You see Starbucks paying people's college tuition because it's cheaper to keep someone than look for new employees. Retention is a big issue. Q: What effect will the Donald Trump White House have on the economy? Amanda Rector: Nationally, there is optimism that the Trump administration will have a positive effect on the economy. e two largest contributors to this optimism are proposals around tax cuts and infrastruc- ture spending. Maine's economy would benefit from increased growth in the national economy. ere is still a great deal of uncertainty about the specifics of the new administration's policies, so it is yet to be seen how large the economic boost might be. ere are also questions about which of the existing federal policies will either be repealed or changed. Without the specif- ics, it's hard to guess what the effects might be. But some of these changes — to the federal overtime rule, for example — could benefit Maine businesses. John Traynor: While it is too soon to tell how much of Donald Trump's campaign rhetoric was bluster and how much will be implemented, we do see a pro-business bias to his cabinet appointments so far. Most economists have raised their estimates for GDP growth in 2017 based on the potential for E very year Mainebiz surveys five experts on what's ahead for the coming year. We've seen major changes in Washington, with President-elect Donald Trump taking office later this month. But regardless of what happens in Washington, Maine still faces some of the same challenges: lack of a workforce, a stagnant population and economic disparity from south to north. So we wanted to know, what's ahead? Amanda Rector Maine's state economist Charles Lawton Chief economist at Planning Decisions Inc. John Traynor Chief investment officer for People's United Bank Jonathan Reisman Economics professor at the University of Maine at Machias Rachel Bouvier Economist at rbouvier consulting T H I S Y E A R ' S F I V E E X P E R T S Big changes in Washington might still mean incremental growth in Maine B y P e t e r V a n A l l e n

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