Region still lagging in job gains, but future seen as 'bright'
Four years after the Norwich-New London area found itself on a list of the nine worst recovering job markets in America, the region still badly lags the rest of the country — and the state — despite a ramp-up in work at major employer Electric Boat and a good performance in the housing sector.
An analysis of state job recoveries released this month by economist Don Klepper-Smith of DataCore Partners in New Haven showed the Norwich-New London area recovering only 19.2 percent of its jobs lost from peak employment before the Great Recession to the low point afterward.
The performance puts the region dead last among major labor markets in Connecticut and compares with the 83 percent statewide job-recovery rate as of June, and the nearly 170 percent national rate.
"Your area has really been hit hard," said Peter Gioia, top economist for the Connecticut Business & Industry Association.
John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board, said the region's job-recovery woes can be tied largely to one sector: casinos.
According to legislative testimony earlier this year, Foxwoods Resort Casino and Mohegan Sun have shed some 8,000 jobs over the past few years.
"That's not easy to recover from," Beauregard said.
Klepper-Smith pointed out, however, that Norwich-New London has gained jobs dramatically since the June statistics were released, at least according to preliminary numbers.
He said in a phone interview that the new numbers put the region's job-recovery rate at closer to 40 percent.
Beauregard said the region has gained more jobs in the past year than any other labor market in the state.
He added that since Norwich-New London reached its jobs nadir, or lowest point, in March of last year, the region has had less time to climb out of the doldrums.
Most other areas of the state reached their low point years earlier.
"I am definitely confident we will get the replacement numbers back," Beauregard said. "It's just going through a cycle that has unfortunately taken longer than any one of us in the region would like."
Klepper-Smith echoed Beauregard's remarks, saying he believes the region has turned the corner and is on a solid trajectory going forward, especially with submarine maker EB expecting to add several hundred jobs a year for the next decade or more.
He and Beauregard point to numbers going back to 1990 showing the region trending miles better on job growth than the rest of the state.
In some ways, Beauregard said, the region is paying for the halcyon days of employment spikes when the casinos were going strong in the 1990s to mid-2000s by experiencing a prolonged down cycle related to job losses in the gaming industries.
Beauregard pointed out that the loss of each casino job is made worse by the multiple effect in the economy that leads to an extra half job also being shed elsewhere.
And if you add the 8,000 casino job layoffs to 4,000 additional positions shed as a result of those losses, the total of 12,000 closely mirrors the number of jobs the region lost from the time of the Great Recession to early last year.
"The worst hopefully is behind us," Beauregard said. "We have seen a lot of new activity in smaller businesses ... small to midsize."
Beauregard also pointed to the 1,300 people over the past few years that have been placed in manufacturing jobs — mostly at EB — thanks to a series of grants designed to pay for six-week, intensive training sessions in such areas as welding and outside machinist.
"I think the future is very bright," Beauregard said.
Tourism, housing improving
Tony Sheridan, chief executive of the Chamber of Commerce of Eastern Connecticut, said he is starting to see a stabilization of the employment situation at the local casinos and some hiring at Pfizer Inc., as well.
Pfizer's announced layoff of 1,100 employees just as the country was starting to work its way out of the last recession has been cited in the past as a key reason why the region has taken so long to climb out of its economic downturn.
In addition, Sheridan said, local tourism is up — with both the Mystic Aquarium and Mystic Seaport posting solid numbers.
Banks are lending, gas prices are down and restaurants are full, he said.
"Things have improved a lot," Sheridan said. "I think anyone who really wants to work is working."
Sheridan said he also has been feeling optimistic about the local housing market.
"The real estate agents are pretty happy these days," he said. "Things have improved quite dramatically."
Susy Hurlbert, chief executive of the Eastern Connecticut Association of Realtors, confirmed that prices have been going up in the region, hitting a median of $213,200 in the second quarter, according to 247wallst.com figures, compared with $187,300 for the same period a year ago.
But she worried the bump was a statistical anomaly, pointing out that July numbers just released last week were down significantly.
Her Realtors association, which tracks real estate in New London and Windham counties, reported that single-family sales fell last month by 6 percent, while the median price decreased by 5 percent compared with July of last year.
"July was a crazy drop," Hurlbert said.
But overall in the past few quarters, she said, "The numbers have been impressive."
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