Heading into 2014, Connecticut finds itself in a familiar place on the economic spectrum: Slow progress that could be much worse.
The state's economy will build steam in 2014 and 2015 with healthy if not spectacular job gains but will continue to lag the nation and the New England region, a new forecast shows.
Job totals, on track for just over 14,000 new positions in 2013, will climb to 18,700 in the gubernatorial election year of 2014, then 24,900 in 2015 before slowing somewhat, said Edward J. Deak, Fairfield University economics professor emeritus and Connecticut manager for the New England Economic Partnership, which released the forecast Wednesday.
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The reason for Connecticut's gains is simple: A rising national economy, which is expected to add jobs at nearly twice the rate of Connecticut in the next few years, will bring this state along on its coattails.
And the reason for Connecticut's continued sluggishness, Deak said, is the same as what we've grown accustomed to seeing: High energy costs, constrained land use and, mostly, no great engine of growth, despite stirrings from the state-sponsored biotech industry.
Add in the basic fact that Connecticut doesn't have a major city. Wednesday's report on all six New England states highlights metro Boston's hefty job gains and raises the question: Does the Hub help the rest of the region?
The answer, Deak and others say, is yes and no. The home of the Red Sox, Celtics, Bruins and Patriots enhances the region but competes against nearby metro areas, notably Hartford.
Not that we lack problems all our own. Headwinds include continued restructuring in finance and insurance, especially as interest rates rise as expected; defense cuts forced by the federal sequester; and more competition for the Connecticut casinos from neighboring states.
Manufacturing is forecast to remain flat or lose jobs over the next couple of years. The traditional factory strength, defense, will be bolstered by the latest jet fighter for the Pentagon, but not as much as we had expected.
"It's quite clear on the basis of what the Department of Defense is doing here that they want to see the F-35 go forward, plus that's going to be a big export item," Deak said Wednesday, ahead of the economic partnership's Boston conference scheduled for Thursday.
But those gains will not happen right away.
Unemployment, which should average 7.9 percent in 2013, is forecast to drop to an average of 7.5 percent in 2014, then to 7.1 percent in 2015. It will reach 6.4 percent in 2017, Deak predicts, but even that number is well above the 4 percent to 5 percent levels of earlier boom times.
All of the predicted figures for Connecticut are weaker than those of New England as a whole, and well below that of the nation. That said, Connecticut doesn't need fast growth, some experts say, because it's adding population more slowly.
Deak, in fact, predicts that the total number of people working or actively looking for work — the labor force — will rise by tens of thousands of people over the next three years, after falling over the last three years. That would be good for job totals but would temper the decline in the jobless rate.
The best year upcoming is clearly 2015 in the forecast, as job totals return to a semblance of boom times and home construction reaches 8,500 new units, from a 2011 low of 3,000. But the job totals, which fell by 120,000 in the recession, won't return to the pre-recession high of 1,713,000 until mid-2016. And the home construction levels will not return to their 2005 peak of 11,000, let alone the heady buildups of the 1980s.
As decent as the numbers look in 2014 and 2015 — both years well north of 1 percent job gains — Deak pulled them back from much higher baseline forecasts for Connecticut by Moody's Analytics. Under the New England Economic Partnership model, the Moody's numbers for each state are based on the U.S. economy, and the state forecast managers adjust those numbers based on local conditions.
The Moody's forecast called for gains of 25,000 jobs in 2014 and a wild and crazy 35,000 for 2015 before Deak made his adjustments.
All of this crystal ball stuff is just that. Deak and the partnership turned out to be way too low last year when they predicted a disaster resulting from the sequester. But barring unforeseen events, the direction of things seems clear: The 2014 economy might help Gov. Dannel P. Malloy in his re-election effort, and if he can win, he'll be able to claim credit for more gains in 2015.
Malloy is working without the benefit of a booming city like Boston, which attracts and holds onto recent college graduates and startup firms. The divide between big urban and small urban centers is rising across the country, and that's why Wednesday's report showed that metro Boston had more than made up its recession job losses.
"Boston is the economic center of the New England region, and so the metropolitan area's recovery will have ripple effects throughout New England," said James T. Brett, president and CEO of The New England Council, which is co-sponsoring Thursday's conference at the Federal Reserve in downtown Boston.
Ripple effects which way?
"It's both a stimulus and a competitor," Deak said, adding that Fairfield, New Haven and Litchfield counties are in New York's orbit, not Boston's. The cities steal our graduates, for sure, but Deak said, "As world-class professors locate in Storrs, Connecticut, which is in the middle of nowhere, at least they can go to Boston and New York."
And he said, Boston creates "regional cohesion" through its sports teams, which have won more than their share of championships in the last decade.
"It brings an identity and a satisfaction for being in one of the highest cost regions in the nation," he said.