The state has a six- to 12-month window to really leverage its advantages (high quality of life, relative affordability and educated workforce) and aggressively recruit companies, before major nearby cities like New York and Boston begin to really regain their luster. It would be nice to see some of that growth and new business activity reach Greater Hartford.
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Just like that, half of 2021 is behind us.
It’s been another strange year that began with the pandemic still raging in Connecticut. But as we head into the dog days of summer the state is in a much better place, both economically and in terms of controlling the public health crisis.
With a relatively high vaccination rate, the positivity rate staying well below 1% on a consistent basis, and only a few dozen people hospitalized with COVID-19, Connecticut’s largely successful handling of the pandemic has put the state in a good position for a strong recovery.
Whether or not that actually plays out remains to be seen. There have been some positive indicators, including the recruitment of several new companies to the southern part of the state. Here’s a look at where things stand economically today and what to watch out for the rest of this year.
Looking back
Connecticut lost a whopping 292,400 jobs in March and April of 2020, and through May of this year has recovered 63% (or 185,200) of those jobs. In May, the state added 7,800 positions and overall Connecticut has regained 18,000 jobs during the first five months of this year.
Our unemployment rate is 7.7%, which ranks Connecticut in the bottom 10 states in the country. The national unemployment rate is 5.9%.
Meanwhile, the state’s gross domestic product rose 6% in the first quarter, but lagged behind most of the Northeast, according to U.S. Bureau of Economic Analysis data.
The single-family housing market is still hot, as demand for suburban living remains high and inventory remains tight.
And state lawmakers avoided major tax increases this legislative session that would have hindered the state’s recovery, and legalized new industries — recreational cannabis, sports betting and internet casino gambling — that could increase economic activity.
Moving beyond the data, Connecticut got several wins that are worth celebrating, including Philip Morris’ decision to relocate its New York City headquarters to Fairfield County, a move scheduled to take place next year. Philip Morris joins two financial technology companies and manufacturer ITT Inc. in recently announcing moves to, or new offices in, the state’s Gold Coast.
There’s been lots of talk and speculation amid the pandemic about Connecticut being an increasingly attractive relocation site for companies located in nearby densely-populated cities, and these recent moves could be evidence of that.
In my opinion, the state has a six- to 12-month window to really leverage its advantages (high quality of life, relative affordability, and educated workforce) and aggressively recruit companies, before major nearby cities like New York and Boston begin to really regain their luster.
It would be nice to see some of that growth and new business activity reach Greater Hartford.
The future
Based on the uncertainty of the last year, it’s very difficult to predict the future.
What I’m most interested in is how quickly our cities, particularly Hartford, bounce back in the months ahead.
While there is clearly more activity in downtown Hartford, the city has a ways to go before it regains its pre-pandemic momentum.
And there’s no clear signal of how things will play out. Everyone will be keeping a close eye on the days and weeks after Labor Day, when many big employers have said they will start to bring back to the office a larger percentage of their workforce.
At that point we’ll begin to see just how many employees are going to work from home on a permanent basis. We’ll also get a better understanding of how a more hybrid work environment impacts traffic flows and commercial activity in the city.
And we still haven’t seen the pandemic’s true impact on the commercial office building market. Downtown Hartford’s office vacancy rate stood at about 20% at the end of the first quarter, a number that is sure to rise in the months ahead.
Short term, many employers will shed office space as they embrace a hybrid work model, but I think office life will remain an important part of the equation and even make a comeback in the years ahead.
Cities like Hartford will depend on it.
