Modest Projection for State’s Economic Outlook

Connecticut’s economy and employment prospects should improve over the next two years, but several factors have diminished the projected improvement, according to a recent report by the Connecticut Center for Economic Analysis (CCEA) at UConn.

According to CCEA’s report, had the state and national economies continued to perform as they did in 2010, the state was projected to have a 10% increase in economic output and recover 55,000 jobs by the end of 2013. However, several factors have lowered those projections, including projected reductions in federal spending, including the end of the federal stimulus; recent upheaval in financial markets; and the European debt crisis. Due to these factors, CCEA projects more modest state economic growth and increases in employment of about 20,000 by the end of 2013. The report expects job growth in several areas, including construction, trade transportation and utilities, and other services, less so for manufacturing.

The report gives examples of policies that could improve the state’s economy in both the short and long run, including green energy projects; promoting electric vehicles; bioscience initiatives; and reducing bureaucratic hurdles, including facilitating the use of unused business tax credits.