To hear all of the discussion lately, one would think that the Maine economy is breaking all records for growth and prosperity. Is it really? Probably not, yet we have been experiencing almost continuously modest growth for the past several years. The twelve-month moving average of the Maine Business Index is clearly trending upward. The index values of most of the components show upward trends. Particularly strong are services and retail sales. Construction and manufacturing have also been steadily increasing over the past few years. None of these gains have been spectacular but they have been reasonably dependable, thus sparing the economy of serious shocks. Our forecast indicates that we will continue to experience modest growth.
Employment figures are also offered as a justification for Maine's rosy economic outlook. The unemployment rate is considerably below that of the nation. In fact, in the past year the number of workers unemployed has declined. Still, we should heed certain worrisome signals. From June 1996 to June 1997, the number of jobs increased by 200 while the number of unemployed workers declined by 3,300. How can this be explained? Where did previously unemployed workers go? One possibility is that they entered the ranks of discouraged workers who have simply ceased their job-seeking activities. Or they could have left the state seeking employment opportunities elsewhere. This latter possibility is consistent with our very slow recent and projected population growth.
Personal income figures for Maine show some positive improvements. In the period from 1992 to 1996, the percent change in Per Capita Personal Income (PCPI) has been less than the national average. The result is that our PCPI ranking has lagged the rest of the country. At the end of 1996 we held the 36th spot, quite a decline from our past best of 26th. In the first quarter of 1997, however, our PCPI growth rate exceeded the national average. This was due to strong showings in retail trade, wholesale trade, and finance, insurance, and real estate. While it is too soon to get very excited about this turnabout, it bears some hopeful watching.
Recently released figures on PCPI for U.S. metropolitan counties ranked the Portland metro 49th of over 300 metropolitan areas. The Lewiston-Auburn area ranked 217th, and the Bangor area placed 252nd. These figures support the contention that the southern part of the state is enjoying significant prosperity. Unfortunately, this same data bolsters the argument that the rest of the state is lagging by an appreciable margin.
All in all, we are not doing badly. Nothing spectacular and not without some problems, but slow and steady wins the race.
R.C.M.
Business Forecast Systems
68 Leonard Street
Belmont, MA 02178
Tel.: 617-484-5050
http://ourworld.compuserve.com/homepages/forecastpro
1996 |
1997 | |||||||
1987 = 100 |
Raw Data Units |
Assigned Weights |
APR |
MAY |
JUN |
APR |
MAY |
JUN |
MAINE BUSINESS INDEX(Composite) |
103.8 |
107.7 |
107.4 |
111.7 |
112.7 |
108.1 | ||
Truck freight on Turnpike <1> |
(tons) |
2.1% |
105.4 |
154.8 |
141.9 |
158.9 |
156.3 |
157.5 |
Automobiles on Turnpike <1> |
(number) |
26.4% |
124.8 |
128.9 |
128.8 |
131.1 |
131.8 |
132.7 |
Construction employment <2> |
(workers) |
6.5% |
73.1 |
74.3 |
72.7 |
79.9 |
80.7 |
81.7 |
Manufacturing production <2> |
(hours) |
21.3% |
97.9 |
100.1 |
98.6 |
105.0 |
104.8 |
105.3 |
Fish landings <3> |
(pounds) |
0.7% |
94.1 |
176.8 |
140.8 |
92.6 |
148.4 |
125.9 |
Electricity sales <4> |
(kwh) |
3.1% |
107.3 |
109.2 |
106.7 |
108.8 |
111.3 |
107.9 |
Agricultural sales <5> |
(1982 $) |
1.4% |
94.4 |
91.6 |
93.9 |
93.3 |
90.7 |
95.8 |
Hotel and motel receipts <6> |
(1982-84 $) |
1.0% |
111.9 |
112.4 |
119.8 |
111.3 |
124.7 |
112.4 |
State government expenditures <6> |
(1987 $) |
13.1% |
96.9 |
108.1 |
117.8 |
119.0 |
123.7 |
96.7 |
Retail sales, less motel receipts <6> |
(1982-84 $) |
18.2% |
93.4 |
94.1 |
90.5 |
100.9 |
99.0 |
92.4 |
Total deposits <7> |
(1987 $) |
6.3% |
96.4 |
96.2 |
96.1 |
94.3 |
94.1 |
94.0 |
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> Federal Reserve Bank of Boston. | ||||||||
