The Vermont economy should recover all the jobs lost during "The Great Recession" by the end of the third quarter of this year. This is one finding of The New England Economic Partnership, undertaken by Jeff Carr andMatthew Cooper, economists atEconomic and Policy Resources in Williston. The latest Vermont Outlook report was released in May.
The Outlook goes on to say that while Vermont suffered less than the rest of New England, and most of the rest of the nation, during the economic downturn that started in late 2007, the recovery has been slow and some employers are still looking for workers. While a slow recovery can be expected from a shallow downturn, the authors said, underlying demographic issues are one cause of the "mis-match" between available workers and available jobs. As younger workers leave the state, jobs are left begging in some industries unless they are filled with workers from out-of-state.
In looking at the most recent downturn, it appears that it will have a recovery similar to that following 9/11 than the more severe, for Vermont, recession of 1991. The state took 60 months to regain the jobs lost from the early '90s recession, while the NEEP report indicates this current recovery will last only 42 months.
LINK TO REPORT PDF
The May 2012 Revised NEEP Outlook for Vermont
Executive Summary:
Vermontâ s proportionally better performance relative to the U.S. and New England economies
during the â Great Recession’and the subsequently slow national and regional recovery has
Vermont on a historically slow labor market recovery track. While a slower rate of recovery
should be expected for a state that is recovering from a shallower economic trough, it is of little
comfort to the still too many Vermonters that remain un‐ or under‐employed.
o While historically, the pace of Vermont labor market recovery is somewhat stronger
than the Stateâ s labor market recovery from the very harsh early 1990s economic
downturn.
o It took state labor markets 60 months to re‐capture all of the labor market ground lost
during that downturn, and this time the pace of the stateâ s labor market recovery looks
to be on par with the speed of the labor market recovery for the 2001 recession when it
took 42 months to recover the payroll jobs lost during that downturn.
The outlook for the Vermont economy over the calendar year 2012‐16 period is for moderate
recovery followed by moderate growth in the out‐years of the forecast.
o If this forecast holds, the state economy will re‐capture all of the statewide payroll jobs
lost during the â Great Recession’by the 2012:Q3.
o This recovery is expected to be fueled by a revival in the global economy,2 good niche
positioning by major Vermont firms to take advantage of that growth, a return to
normally functioning financial markets, and eventual resumption of positive price
movement in Vermontâ s residential and second home markets.
As mentioned above, the payroll job recovery and eventual resumption of payroll job growth
will be historically slow and uneven averaging only about 1.3% per year over the forecast period.
o The recovery‐expansion in payroll jobs will hit +2.0 percent annual average in calendar
2015, with payroll job growth easing back to an average growth rate of 1.5% in calendar
2016.
Improvement in the stateâ s unemployment rate will continue at a faster pace than either the
U.S. and New England economies as a whole.
o Average annual unemployment rate in Vermont is expected to drop over 2 percentage
points over the calendar 2012‐16 forecast period, settling in at an average annual rate
of 3.9% by calendar 2016.
Positive job gains are expected in all NAICS supersectors3 under this Spring 2012 NEEP outlook
revision for Vermontâ including the Business and Professional Services sector (at a +3.1%
percent annual average over the calendar year 2012‐16 period) and the Construction sector (at
a +1.1% percent annual average over the calendar year 2012‐16 period).
----------------
1 NEEP means New England Economic Partnership.
2 Including the avoidance of an economic‐financial implosion in Europe.
3 NAICS means North American Industry Classification System. Labor data reported by the Bureau of Labor
Statistics is classified by NAICS sector. Public and private reporting agencies follow this paradigm.
----------------
Near‐term economic prospects and the pace of economic recovery and the eventual resumption
of growth will also continue to be impacted by the lingering effects of Tropical Storm Irene,
which hit Vermont at the end of August 2011.
o Damage and repair assessments are updated on an ongoing basis in Vermont. Roughly
75%, and possibly as high as 90%, of the funds required for repairs is expected to come
from Federal emergency reliefâ providing a significant and positive economic stimulus
to the Vermont economy.
Just as for the U.S. and New England regional economies, the Vermont economy faces
significant headwinds as the state moves through the mid‐2000‐teens.
o These include a still unfolding European debt, currency, and financial crisis, persistently
high energy‐gasoline prices, a national housing sector that still has not firmly bottomed,
and the macro economic implications of a structural federal fiscal imbalance that will
require extremely deft policymaking to favorably resolve.
o Deft fiscal policymaking is something neither major party has recently demonstrated the
ability to execute.
For the greater part of three decades, policy in Vermont has tried to address what many believe
has been a significant skills mismatch in Vermontâ s labor markets.
o For a number of years, Vermontâ s demographics have indicated that there has been a
contraction in the supply of young adultsâ which comprise a vital portion of the modern
workforce.
o Employers have reported significant shortages in the supply of individuals with basic
technical or job‐specific skills they require, as evidenced by the high amount of
vacancies in middle‐skill occupations.
While it is true that the educational attainment of the over 25 years population in Vermont has
been high and continues to rise, this has apparently done little to assist many state employers
with filling the type of jobs employers report as in demand and vacant.
o Instead, attainment appears to be on the rise more because a highly educated, older
population is continuing to choose to reside in Vermont, while younger, newly
graduated college degree holders appear to be moving away.
o Although this trend seems to be impacting other New England states as well, it is of little
comfort to state employers who have good job opportunities available but no one
readily available to fill themâ unless they move into Vermont from out‐of‐state.
www.vermontbiz.com/files/VT NEEP_forecastoverviewt_05302012_v1.2-1.pdf