Our forecast of the Maine Business Index paints a less rosy picture. We are forecasting that the Maine economy will stabilize at its current level. This should not come as much of a surprise, since it would be unreasonable to expect the rapid rate of growth experienced in the past year or so to continue forever. Our forecast is consistent with warning signs from the national economy. The troubles in Asia are bound to affect us to some extent. This has not been the case to date, but there are unmistakable signs on the horizon that our exports will soon decline due to this factor. Another harbinger of a national slowdown is the decrease in the rate of capital investment. This has a direct effect on the multiplier, and will decelerate increases in productivity. Productivity improvements have been one factor driving the country's current economic expansion.
Maine's employment picture is also not strong. We have lost more than 10,000 jobs since December of 1996. While this loss has occurred all across the state, Cumberland and York counties — Maine's economic powerhouses — account for over 6,000 lost jobs. If the point needs to be emphasized, this means that these two counties, with 35 percent of the state's jobs, accounted for 60 percent of the losses. In spite of this, their unemployment rate remains below both the state and the national averages. The state unemployment rate exceeds the national rate, however. This is a reversal of the December 1996 relationship, when Maine's unemployment rate was below the nation's. As is usually the case, the northern part of the state has higher than average unemployment rates.
Maine's personal income growth rate continues to lag that of the country. This is explained in part by our loss of jobs, and in part by modest rises in unemployment rates.
So what is the overall picture? As we should have expected, the rapid increase in our economic prosperity will be slowing down, if not coming to an end. At this time, however, we do not expect a downturn. We have been there before, and it wasn't much fun. We should appreciate the recent past, and not grumble about the coming adjustment.may turn out to be a Happy New Year for the Maine economy. The overall situation seems fairly healthy, thanks, in very large part, to a vigorous national economy.
R.C.M .
Business Forecast Systems
68 Leonard Street
Belmont, MA 02178
Tel.: 617-484-5050
http://ourworld.compuserve.com/homepages/forecastpro
1996 |
1997 |
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1987 = 100 |
Raw DataUnits |
Assigned Weights |
OCT |
NOV |
DEC |
OCT |
NOV |
DEC |
MAINE BUSINESS INDEX(Composite) |
110.2 |
112.2 |
111.4 |
115.2 |
113.4 |
118.0 |
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Truck freight on Turnpike <1> |
(tons) |
2.0% |
158.1 |
148.2 |
154.2 |
166.6 |
156.7 |
158.6 |
Automobiles on Turnpike <1> |
(number) |
26.9% |
129.3 |
132.2 |
136.1 |
134.5 |
136.6 |
139.5 |
Construction employment <2> |
(workers) |
6.6% |
76.5 |
76.2 |
77.2 |
81.4 |
81.4 |
82.4 |
Manufacturing production <2> |
(hours) |
20.6% |
100.0 |
102.0 |
102.5 |
107.9 |
108.0 |
110.2 |
Fish landings <3> |
(pounds) |
0.6% |
117.1 |
109.4 |
99.0 |
130.2 |
127.1 |
113.2 |
Electricity sales <4> |
(kwh) |
3.2% |
109.6 |
107.6 |
112.8 |
113.2 |
112.8 |
113.4 |
Agricultural sales <5> |
(1982 $) |
1.3% |
94.6 |
89.8 |
93.3 |
102.1 |
103.3 |
113.1 |
Hotel and motel receipts <6> |
(1982-84 $) |
1.0% |
116.3 |
121.0 |
105.3 |
128.8 |
119.4 |
103.6 |
State government expenditures <6> |
(1987 $) |
13.0% |
111.6 |
121.3 |
112.7 |
115.1 |
106.1 |
128.0 |
Retail sales, less motel receipts <6> |
(1982-84 $) |
18.3% |
96.3 |
95.8 |
89.8 |
98.7 |
93.5 |
96.4 |
Total deposits <7> |
(1987 $) |
6.5% |
120.8 |
121.1 |
121.3 |
123.5 |
123.8 |
124.0 |
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. |
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