New Haven-area economy shows weakness in job growth, housing
The New Haven-area economy, which for much of 2017 has fared better than the state as whole, is showing some weakness when it comes to the housing sector, according to the latest edition of the New Haven Register’s economic scorecard.
Seven of the eight economic indicators that make up the scorecard were headed in a positive direction. Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners and author of the scorecard, said the only indicator headed in a negative direction is housing starts, which were off by 30 percent in September compared to the same period a year ago.
“With the job recovery rate being what it is, we’re sort of muddling along here,” Klepper-Smith said of the New Haven area’s housing indicators. The median single-family home price increased by $7,000, or a little more than 5 percent.
The New Haven area saw total employment and its labor force grow slightly. Total employment in the region was up by 1.2 percent while the labor force grew by 1.1 percent.
“Neither one is going gangbusters,” he said.
Despite weakness in the housing and employment indicators, consumer confidence grew by 36 percent. Some of that confidence is likely due in part to gains made in the stock market, according to David Cadden, a professor emeritus at Quinnipiac University’s School of Business.
“With a rising stock market, people are still convinced we’re doing well,” Cadden said.
But while stock market gains have bolstered consumer confidence, a recent survey released by the Connecticut Business & Industry Association suggests there is no reason to expect significant employment growth going forward.
CBIA’s 2017 Third Quarter Economic and Credit Availability Survey found the number of business executives who expect the economy to take a turn for the worse in the coming months increased from 14 percent during the second quarter of this year to 24 percent in the third quarter.
The number of companies that expect to add jobs in the coming months decreased slightly from the second quarter. Twenty-one percent of company executives who responded to the third-quarter CBIA survey said they expected to hire workers in the immediate future, compared to 23 percent during the second quarter.
The percentage of companies that expected to impose layoffs in the future grew from 12 percent in the second quarter to 17 percent in the third quarter.
Klepper-Smith said the final months of 2017 and the beginning of 2018 “are a critical period” for the New Haven-area economy.
“We’re starting to get clues, some red flags, that we may be teetering on the edge of a recession,” he said.