The loss of about 900 jobs at Pfizer Inc.'s Groton campus over the past year has helped accelerate employment cuts throughout the region, according to the author of a new economic report who said Friday that the Norwich-New London area will likely lose another 2,000 jobs in the next 12 months.
"When those (Pfizer) jobs disappear, it's going to have a ripple effect," said Steven P. Lanza, executive editor of The Connecticut Economy, a quarterly publication of the University of Connecticut. "They are good jobs with high incomes. ... They support a big share of jobs in the rest of the economy."
Pfizer announced last year that it would be reducing employees at its Groton research site by 1,100. Figures released by the company this week indicate it is within 200 of its local employment goal of 3,500.
The summer issue of The Connecticut Economy, released Friday, shows the Norwich-New London area, which includes Westerly, as being the only major region of the state likely to see an employment decrease over the next year. The region lost about 3,500 jobs between the first quarter of last year and the same period of 2012, according to the report.
This stands in stark contrast to the state as a whole, which saw an increase of 7,000 jobs last quarter, the second-biggest rise since Connecticut's economic recovery began in 2010. And Connecticut is expected to add nearly 12,000 jobs over the next year, according to projections released Friday.
"Seems the economy may possess some underlying strength after all," Lanza said in the report.
The report noted that some areas of labor gains seen in the first quarter of this year - notably in construction and retail - may be related to warm winter weather and could prove to be unsustainable in the spring quarter ending this month. Still, taking out the retail and construction industries, Connecticut had decent job growth of 2,900 last quarter, a rate it is likely to sustain, the report said.
"The health sector, up nearly 3,000 jobs, was particularly robust," Lanza said. "And manufacturing showed renewed vitality, with the addition of 500 more."
The report noted that more jobs mean less unemployment. The state's 7.8 percent unemployment rate is a three-year low, according to Lanza.
Projections showed most areas of the state recording unemployment rates below 7 percent within the next year. But the Norwich-New London area, also projected to have lower unemployment rates in the next few quarters thanks partly to people exiting from the labor force, was expected to maintain a rate above 7 percent throughout the next year.
"A lot of the problem right now stems from the public sector," Lanza said in a phone interview.
Private-sector job gains in Connecticut are running at about 20,000 a year - good by modern standards - but are weighed down by cuts in state and local government, Lanza said.
"We'd actually be in pretty good shape if we didn't have this constant erosion in the public sector," he said.
The government sector in eastern Connecticut includes casino jobs, which have shown a steady drop in recent quarters, Lanza said. A sector that had once accounted for about 20,000 jobs before the casinos were built had seen a doubling of the labor force in the boom years but has since faded through layoffs and attrition into the mid-30,000 range, he said.
Other sectors, such as education and health care, have failed to pick up the slack, he added.
The region's housing prices are not expected to help much, either, with an expected decline over the next three quarters averaging about 8 percent year-over-year, Lanza said.
"There are still some real headwinds out there," he added.