🔒Carstensen: Stagnation looms for CT economy

Connecticut employment is still below 2008 levels, and only 9,000 up from June 2018.

By comparison, the nation has added 10 million jobs since June 2018.

The fiscal guardrails, designed for a vastly different budget environment, have sent nearly $8 billion out of the state, while funding for K-12 education falls well below national averages. And UConn, a major economic driver that generates more net new revenue than the state provides in support, faces serious budget cuts and staffing reductions.

In the critical arena of data storage and cloud infrastructure, Connecticut is virtually absent, having but 0.68% of the national infrastructure, lagging New Hampshire.

In contrast, the healthy economies of Massachusetts and New York each have nearly 5%. The oddity is that Connecticut is home to the largest source of electricity generation in New England (the Millstone nuclear power station), but exports almost 50% of that power, supporting its neighbors’ economies.

Connecticut has long underinvested in itself relative to other states and now looks to be paying the price.

Even still, there are bright spots. UConn and Yale have grown strongly in the past decade, playing a critical role in preserving Connecticut’s economic health.

Yale has created three new colleges or schools, is investing heavily in expansion of facilities and recruiting faculty, and — critically — has become a full member of the Massachusetts Green High Performance Computing Center in Holyoke, putting the school at the cutting edge in data analytics and quantum computing.

The growth of Yale University and Yale New Haven Health is also driving much new investment in the New Haven region in everything from laboratory space to residential housing, supported by the vibrant expansion of service at Tweed New Haven Airport.

Meanwhile, UConn is on track to reach a half billion dollars in funded research.

Manufacturing, driven by defense and aerospace, looks to remain strong, though high productivity growth limits job creation and elements of the supply chain have been leaving the state.

There are also promising investments to bring professional soccer to Bridgeport as part of a billion-dollar complex and other major residential developments. And federal funding is driving major improvements in critical elements of the state’s transportation infrastructure.

Fred Carstensen is the director of the Connecticut Center for Economic Analysis and a professor of finance and economics at UConn’s School of Business.