Economic Forecasting

Wed, September 23rd 2009

Yesterday I went to the Greater Manchester Chamber of Commerce’s annual Economic Forecast Luncheon. Subtitled “Do you wonder what the future holds for the New Hampshire economy?”, the event promised a cross-section of academics, researchers and business people that sounded intriguing.

After some friendly introductions at my table, I noticed that 7 of the 9 people I was sitting with were using their Blackberries during the program. By comparison, our highly connected students are slackers. No wonder we struggle with kids texting during class and the like if the adults are also figuring out the etiquette.

The opening thought of the gathering was “If you are here today complaining about your ability to balance your budget, the challenging economic atmosphere, or that you are working harder with less people – congratulations.” This was a sobering reminder that many businesses (and, I would add, several schools) did not make it through 2009.

I did a pretty good job of scratching notes out on a napkin, the highlights of which are transcribed below –

• During the last 18 months the New Hampshire economy has lost jobs at about half the rate of the US economy, and Manchester in particular has lost jobs at half the rate of New Hampshire –a pretty good record for our local area.

• New Hampshire grows because families move here from elsewhere. Thus, the area has felt the “locked-in” effect of falling home values elsewhere that dampen the ability and/or the desire of people to move.

• The New England economy is proving to be remarkably resilient, and New Hampshire has managed to prosper, relatively speaking, in a declining region.

• New Hampshire will continue to be the strongest economy in New England, outperforming the nation as whole. This prediction is based on the expected continued strength in the health care, education and technology sectors – in that order.

• As opposed to a “V” shaped (hard down, quick up) recovery or an “L” shaped (plunge, with extended dragging along the bottom), the panel was predicting a “U” shaped recovery where we would bounce along the bottom for most of 2010 before beginning to add jobs and growth thereafter.

Just that so much of the talk was about a recovery was affirming – regardless of the letter you choose, most seem to think that some amount of light is ahead.



CNS