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December 22, 2017 ECONOMIST SCORECARDS

State's high costs will continue to drag economy

By Farhad Rassekh, Economics Professor, University of Hartford

The economic outlook for Connecticut in 2018 appears to be moderately weak, just as it has been in the last several years. The state's reputation for high taxes and as an expensive place to live and work discourages businesses and people from moving in while motivating those who are already in the state — especially the elderly and young professionals — to move out.

This is the reason Connecticut is losing population. The real estate sector has been relatively stagnant over the last 10 years, and in many areas, housing prices have declined. State economic policies are largely responsible for the grim economic outlook. Without the right set of policies, the performance of Connecticut's economy will likely remain below the national average in 2018.

Federal economic policies also affect the state's economy, but here, the impact is both positive and negative. Federal contracts negotiated with defense-related manufacturers in the state help our economy, while a retreat from world markets is harmful because many of our businesses rely heavily on exports.

Less imports inevitably leads to less exports. Ultimately, our own policies matter the most. Creating a business-friendly environment is central to economic vitality. This is easier said than done, but it is entirely feasible.

Read more forecasts here.

SCORECARD

What’s your 2018 economic outlook for Connecticut? 

Moderate Growth

How many jobs will Connecticut add? 

10,000

What will Connecticut’s unemployment rate be at the end of 2018?

4.5%

What type of GDP growth will Connecticut see in 2018? 

1.5-2%

Which industry will add the most jobs? 

Defense-related industries

Which industry will lose the most jobs?

Relatively low-tech manufacturing

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