[Return to MBI homepage]

MAINE BUSINESS INDEX
 
According to the Maine Business Index the Maine economy continues its upward trend.  It is difficult to find much wrong with this scenario.  Most of the components of our Index show increases.  The primary exception is manufacturing which, following a national trend, continues a modest decline.

Employment is greater than it was a year ago, and the number of unemployed is down as is the unemployment rate.  The labor market is tight in southern Maine.  Even in the northern part of the state unemployment rates are lower than usual, although that is difficult to explain to those without a job.

This will be my last editorial commentary, as I am completing a four-year retirement process.  As such I suppose that I am entitled to make certain observations of a more subjective nature.

The fact of the matter is that Maine is a poor state and is not improving relative to the rest of the country.  In absolute dollars, median family income ranks about 36th in the nation.  When we factor in the cost-of-living, we are close to the bottom.  How do we account for this?  Certain natural factors play a role.  Maine is located in a cold climate resulting in relatively expensive heating costs.  The state is also situated in the Northeast corner of the United States, and this is bound to affect its economic relationships with the rest of the country.  Our electric costs are high and there is no reason to expect that deregulation will reduce our competitive disadvantage.  Taxes in Maine, at all levels, are likewise high.  Most importantly, as pointed out in this issue's lead article by Jim Breece, the productivity of our labor force is low.

Since a very clear relationship exists between labor productivity and income, it seems that, if we want to raise incomes, we will have to raise productivity.  And how do we accomplish that?  The key is education, as defined in the broadest terms.  Our elementary and high school performance is quite good so the problem does not lie there.  Students are well prepared to move on.  Maine's universities and technical colleges are doing a reasonable job, although they are expensive for the students and relatively underfunded by the public sector.  But what is the private sector doing to raise productivity?  Is it encouraging workers to expand their skills, and is it providing them with contemporary tools with which to work?  This is an area where public policy could and should play an important role.

As a final note, I would like to express my appreciation to our readers and to those who have contributed timely articles over my ten-year tenure as senior editor of the MBI.  They are wonderful folks and I greatly enjoyed working with them.  I would like to especially thank Dick Clarey, who gave me the opportunity to take on this task, and Stanley Max, our superb associate editor, without whose efforts Maine Business Indicators would not have been published.

R.C.M.


Since 1989, Robert McMahon, now associate professor emeritus of economics at USM, has served as senior editor of the MBI.  In every issue he has contributed a commentary on the quarterly progress of the Maine Business Index, and overall he has played a most significant part in the publication.

Bob will now be retiring from the editorial staff, making this his last installment of "pithy comments," as he likes to call his analysis.

All of us at CBER, the School of Business, and the University will sorely miss Bob's work on the MBI, and we thank him for the tremendous and successful efforts he has made to it during these many years.

S.M.M.

In the preparation of the historical and forecasted data of the Maine Business Index, the editorial staff of Maine Business Indicators used the software package Forecast Pro for Windows. This software is produced by:

Business Forecast Systems
68 Leonard Street
Belmont, MA 02178
Tel.: (617) 484-5050
http://www.forecastpro.com 


 
1997
1998
1987 = 100
Raw Data
Units
Assigned Weights
OCT
NOV
DEC
OCT
NOV
DEC
MAINE BUSINESS INDEX
(Composite)
115.3
113.1
117.7
118.0
120.0
122.0
Truck freight on Turnpike <1>
(tons)
1.9%
166.6
159.4
162.5
172.2
178.2
182.3
Automobiles on Turnpike <1>
(number)
27.4%
134.5
135.1
137.9
134.0
140.8
143.7
Construction employment <2>
(workers)
6.8%
81.4
81.4
82.4
84.5
84.8
88.4
Manufacturing production <2>
(hours)
20.2%
111.6
111.8
114.1
114.7
114.7
113.1
Fish landings <3>
(pounds)
0.5%
156.0
134.5
116.0
152.5
156.4
152.7
Electricity sales <4>
(kwh)
3.2%
113.2
112.8
113.4
109.1
109.7
105.2
Agricultural sales <5>
(1982 $)
1.3%
102.1
102.9
112.9
109.3
107.9
116.0
Hotel and motel receipts <6>
(1982-84 $)
1.0%
128.8
119.4
103.6
128.2
124.4
123.7
State government expenditures <6>
(1987 $)
12.8%
117.2
108.1
130.5
117.8
123.6
129.9
Retail sales, less motel receiptS <6>
(1982-84 $)
18.3%
98.7
93.5
96.4
108.3
104.8
107.7
F.I.R.E. <7>
(1987 $)
6.6%
108.9
108.3
107.6
108.6
108.2
107.8
     SOURCES: <1> Maine Turnpike Authority; <2> Maine Department of Labor; <3> National Marine Fisheries Service; <4> Central Maine Power Company; <5> U.S. Department of Agriculture; <6> Maine Department of Finance and Administration; <7> U.S. Department of Commerce.

 


 


 

[Return to MBI homepage]