Connecticut boasts a highly educated workforce and a desirable location, but it will have to keep taxes in line and convince millennials to set down roots if it wants to compete economically, according to research conducted at Sacred Heart University.
Students in the Jack Welch College of Business recently presented the annual Connecticut Economic Outlook at the Frank and Marisa Martire Business & Communications Center forum, assessing the state’s macroeconomic indicators, such as state growth, unemployment and business investment.
An annual project for students in Professor Lucjan Orlowski’s economic and financial forecasting class, the presentation included detailed analyses of Connecticut’s education and science potential, the housing market and the state budget. It also compared the state’s gross domestic product to that of the nation.
“We’ve been trying to thoroughly research what’s going on in the Connecticut economy. There is no ‘fake news’ here,” Orlowski told an audience of about 100.
No one was surprised to learn that Connecticut is facing some serious challenges in 2019. The Great Recession devastated the state, and it is the only one in New England that has yet to reach pre-recession numbers for several key indicators of economic health, according to the student groups.
Both millennials and young people in Generation Z favor city living and are shunning the suburbs of Fairfield County and beyond in favor of New York City and Boston, the students found. In addition, high-profile corporations are mulling following GE’s lead and leaving the state. Connecticut taxes on individuals and companies alike rank among the highest in the nation, fueling the migration, they said.
“It’s losing its edge as a competitive location,” said Julien Mallet, whose presentation with classmate Jackson Mjeshtri addressed structural change.
A look at the state’s GDP showed it gaining ground, ranking just behind Massachusetts as the second strongest state in New England. Finance, wholesale trade and information are among the largest contributors to that growth, the students reported.
The state also boasted the lowest number of initial unemployment claims in about 50 years.
An analysis of the state budget showed employee benefits, pension and retirement, infrastructure and health care are among Connecticut’s biggest stumbling blocks to a healthy economic outlook.
“As you can see, the rates are higher than in the rest of the U.S.,” said student Renan Raposo.
Looking at the state’s housing market, students found the median price of a Connecticut home is $325,000, up 5 percent from 2017. Houses spend an average of 125 days on the market, and one of the key factors working against the market is the state’s property tax, which is seventh highest in the nation.
Baby boomers are looking to sell their houses, but millennials favor renting, the students said.
Sara Paul and Emily Murphy, who presented a non-technical summary of the full overlook, said the big takeaway for 2019 centers on the state’s growth rate. “It’s a lot better than we’ve been doing in the past few years,” Murphy said.
Orlowski summed up the evening using weather terms.
“You might have noticed our forecasts were rather cloudy,” he said. “It’s not raining, but it is rather cloudy.”