The Connecticut economy has shown clear signs of decelerating in many of its economic metrics as real state GDP has actually declined by 7 percent between 2008 and 2018.
Get Instant Access to This Article
Subscribe to Hartford Business Journal and get immediate access to all of our subscriber-only content and much more.
- Critical Hartford and Connecticut business news updated daily.
- Immediate access to all subscriber-only content on our website.
- Bi-weekly print or digital editions of our award-winning publication.
- Special bonus issues like the Hartford Book of Lists.
- Exclusive ticket prize draws for our in-person events.
Click here to purchase a paywall bypass link for this article.
The Connecticut economy has shown clear signs of decelerating in many of its economic metrics as real state GDP has actually declined by 7 percent between 2008 and 2018.
Over this same period, the U.S. economy has increased by 19 percent, a vivid contrast. The lack of fiscal discipline at the state level continues to be an issue in Connecticut. The state now ranks No. 2 in the country in overall tax burden, while the high overall costs of living, and demographic shifts are factors that are now promoting net outmigration from Connecticut.
The Census Bureau recently released data for 2018 showing that the rate of domestic net migration in Connecticut remained relatively unchanged at -0.61 percent, but the state now has the sixth highest rate of net outmigration, sliding two spots from the 2017 rankings. The data shows that Connecticut lost a total of 21,509 people to other states between July 1, 2017, to July 1, 2018, or 414 people per week.
Continued net outmigration has adversely affected Connecticut’s tax base in recent years. A total of 175,930 people have left Connecticut for other states for the period between April 1, 2010, and July 1, 2018. The new data also raises some interesting questions about what the 2020 data might look like given the less-than-favorable climate within the business community.
The Connecticut economy has underperformed in recent years, namely on job growth and income creation. Connecticut has the lowest job recovery rate in New England of 85.1 percent as of Sept. 2019.
Total non-farm employment is up only 0.4 percent through Sept. 2019, well below our long-term average annual growth rate of 1.1 percent. Jobs are essential to overall economic health because of the linkages to income, consumer spending, tax revenue and consumer and business confidence.
Bottom line: Given a waning business cycle, high taxes, rising outmigration, and new paid family leave initiatives, Connecticut’s business community is now facing major challenges to continued profitability heading into 2020. Economic stagnation is likely to continue as long as we adhere to state economic-development policies that are predicated on outdated, anachronistic economic fundamentals that were prevalent in the 1950s and 1960s.
