Beauty comes in many forms. For an economist a rising trend line for the Maine Business Index is a beautiful thing, and that is what we have been experiencing over the past several years. It has not been rocketing over the top of the page, but it has been steadily trending up. The retail sector, as well as the finance, insurance, and real estate sector, have been strong in the last quarter. Our forecast to the end of 1998 does not exhibit the same trend, but forecasts have an uncanny ability to be less than 100 percent accurate, and I would suspect that this particular one understates the future Maine economy.
Does this mean that Maine is the economic hot-spot in the nation's economy? Not yet. Recently released data from the U.S. Department of Commerce's Bureau of Economic Analysis concerning personal income indicates that Maine still has some way to go. One of the better measures of average well-being is per capita personal income (PCPI). Preliminary figures for 1997 estimate that it was $22,078 for Maine. This is the lowest in New England, where the average PCPI is $30,717, and below the U.S. average of $25,598. Furthermore, since 1993 the annual percentage change has been at or below the national rate, implying that Maine is slowly falling behind. It currently ranks 36th in the nation.
The Bureau of Economic Analysis also recently released 1996 PCPI data for 315 metropolitan areas in the United States. This data supports the argument that the two halves of Maine are not enjoying even similar levels of economic well-being. PCPI in Portland was $26,497, ranking it 47th of the 315 areas. A bit further north, in Lewiston-Auburn, the PCPI was $20,385 giving the L-A area a rank of 222. Even further north the Bangor PCPI was $19,495 yielding a rank of 261.
When we turn to employment data we find confirmation of our two-Maines situation. Unemployment levels in the southern part of the state, primarily York and Cumberland counties, is so low that the news media have made much of the fact that firms are having difficulty finding workers for their operations. On the other hand, the northern part of the state has too many unemployed workers. Some Labor Market Area unemployment rates have been as high as 15%.
So we have at least a couple of economic challenges in the state. One is to raise the overall level of prosperity to the national average and the other is to even out, at whatever level, the prosperity across the state. It is this second challenge that may be the more difficult but, in my opinion, the more important.
R.C.M.
Business Forecast Systems
68 Leonard Street
Belmont, MA 02178
Tel.: 617-484-5050
http://ourworld.compuserve.com/homepages/forecastpro
1997 |
1998 |
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1987 = 100 |
Raw DataUnits |
Assigned Weights |
JAN |
FEB |
MAR |
JAN |
FEB |
MAR |
MAINE BUSINESS INDEX(Composite) |
113.6 |
114.2 |
111.7 |
113.5 |
120.8 |
117.5 |
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Truck freight on Turnpike <1> |
(tons) |
2.0% |
158.0 |
153.0 |
147.9 |
162.4 |
166.6 |
161.0 |
Automobiles on Turnpike <1> |
(number) |
26.9% |
142.5 |
139.7 |
136.1 |
140.8 |
141.0 |
139.9 |
Construction employment <2> |
(workers) |
6.6% |
80.8 |
80.3 |
81.4 |
83.5 |
84.8 |
84.1 |
Manufacturing production <2> |
(hours) |
20.6% |
105.1 |
105.5 |
106.8 |
110.8 |
113.7 |
112.8 |
Fish landings <3> |
(pounds) |
0.6% |
114.7 |
129.5 |
119.7 |
94.0 |
98.5 |
85.9 |
Electricity sales <4> |
(kwh) |
3.2% |
109.3 |
107.7 |
105.5 |
100.7 |
102.3 |
98.5 |
Agricultural sales <5> |
(1982 $) |
1.3% |
91.8 |
90.8 |
90.4 |
106.6 |
138.8 |
108.2 |
Hotel and motel receipts <6> |
(1982-84 $) |
1.0% |
119.2 |
106.4 |
118.3 |
120.7 |
163.9 |
128.3 |
State government expenditures <6> |
(1987 $) |
13.0% |
98.7 |
112.9 |
114.3 |
102.1 |
108.6 |
109.6 |
Retail sales, less motel receiptS <6> |
(1982-84 $) |
18.3% |
97.3 |
95.3 |
85.0 |
89.4 |
115.1 |
105.0 |
F.I.R.E. <7> |
(1987 $) |
6.5% |
122.2 |
122.3 |
122.2 |
123.8 |
123.9 |
123.8 |
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. |
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