Worries over a U.S. recession in 2020 are way overblown. We are seeing a global slowdown and impacts from trade troubles across the U.S., but not at a level likely to derail modest growth through 2020.
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Worries over a U.S. recession in 2020 are way overblown. We are seeing a global slowdown and impacts from trade troubles across the U.S., but not at a level likely to derail modest growth through 2020.
Major forecasters such as Wells Fargo expect moderate growth into 2020. This is good news for Connecticut as our growth is much weaker than the U.S. and we need stronger U.S. customers to continue to buy our manufactured products and services like insurance.
While there still is serious political risk, most of it is election related. There is, of course, heightened concern about conflict, especially in oil-producing areas, but the U.S. is in a strong position to weather, and in some cases benefit from an oil price spike as we are energy self-sufficient and becoming a great exporter of energy.
There is also risk from tariffs/trade wars, but the U.S. and China are talking, though the good and bad news on that changes almost daily. Finally, the Fed sees continued growth right now and signals a willingness to step in if at any time that falters.
Connecticut has great economic potential but is falling short on benefitting from this potential. We have great manufacturing, especially in aerospace and defense, that will help us for at least the next generation. We have a solid, if struggling financial-services sector. Connecticut business confidence is mixed. There’s a lot of confidence in the U.S. economy and in own-company performance while confidence in the Connecticut economy is weak.
For Connecticut in 2020, the most likely scenario is slow growth, barely avoiding a state-specific recession while the rest of the country grows.
I see job growth under 10,000 net new workers, slow housing growth and stagnant prices and continued net outmigration. Most businesses will see profits while doing all they can to cut prices and increase automation and technology.
I see more Connecticut companies developing new products or services but making these products or services increasingly out of state.
We are hampered by a lack of qualified workers, weak job growth and burdensome government regulation and taxes compared to most competitor states. Our business morale is terrible as seen in recent surveys.
These problems are holding us back and result in bad effects in areas like housing, tax base, outmigration, and inability to attract enough firms from out of state.
How do we address these dilemmas?
We need to have a moratorium on new government regulations to improve business confidence to invest in Connecticut. We need a major effort building upon successful models to massively grow skilled manufacturing workers and better educate inner-city youth.
We need to turn much of our prison population into productive workers rather than tax-dollar drains upon reentry.
We need to stop squandering tax dollars on overtime and failed models. We need to immediately address transportation bottlenecks on I-95 and I-84 and in rail connectivity.
Finally, we must recognize and address the fact that other states, including neighbors, are eating our economic-development lunch.
Failing major efforts in these areas, I see continued subpar performance in Connecticut as others prosper and grow stronger.
