🔒Hird: Compound impact of a growing economy

While it’s clear that Connecticut is lagging behind much of the country in the economic recovery, it is nonetheless recovering.

Companies are adding workers, empty buildings are being leased or sold, and there seems to be general consensus that next year this trend will continue. Outdated office buildings in Hartford and New Haven are being converted to residential use.

There is a compounding effect anytime a new building goes up or an old one is renovated for a new use. A great example would be the new 495,000-square-foot office/research tower being completed in New Haven, at 100 College St. 

Beyond the jobs inside, everything from construction companies to restaurants and apartment buildings will see the net positive result. Even something like a new ballpark in Hartford can have a multiplying effect with more people coming into Hartford, including an increase in restaurant patrons, new retail and visits to other downtown venues.

These events all have a cumulative effect on the overall economy. The economy is like a large ship, once it starts off in a direction it takes a lot of time to change course.  A significant change in the economy can be imperceptible at first, but as time goes by we will all wonder how we didn’t see it coming.

There is a trend under way in Connecticut that has been going on for some time: Young people, after graduating from college, are moving to the big cities — New York, Boston, Washington D.C. or Chicago.

For those who do want to remain in Connecticut, this trend can have a positive effect on larger cities in Connecticut with younger people moving to our own cities instead of staying in the suburbs.

That leads to the inevitable question of who is going to buy up the existing housing stock? Prices seem to be headed downward for sales of existing homes and rents for new or existing apartments seems to rise every year while vacancy rates remain low. 

At some point there comes a balancing point where prices become so low on houses or so high on city apartments, a switch takes place again.

[See what others are saying on HBJ's Economic Forecast 2016 page]