New Hampshire's Economy: Strengths and Constraints - New...PDF Overview of the new hampshire economy.
We work, buy things, save and invest in the economy of a nation, region or state.New Hampshire has over one million residents who work, consume, save, and invest in the state.The role of businesses and governments in this economy is a way for us to join together as workers, investors and residents in order to prosper.
New Hampshire is not an island.Many of us work, consume, and invest outside of New Hampshire.Visitors, commuters, and outside investors contribute to the economic success of the state.The New Hampshire economy is part of the regional, national, and global economies that have an enormous impact on what happens here.
What is New Hampshire?The major features of the state's economy are described, followed by an analysis of recent trends and challenges we may face moving forward.Please let us know how this section may be improved.Are there areas of the economy that you would like us to cover in more detail?Please email Carsey.WINH@unh.edu to let us know.
Clicking on the gray boxes indicates more data is available.Clicking on the "+" next to the description will reveal additional explanatory text.
A decade after the Great Recession, the New Hampshire economy comprises more than 700,000 jobs, few in the state are unemployed, and the median wage is close to the national level.We commute to jobs in Massachusetts, Maine, and Vermont because we work in diverse industries.Our median income is high compared to the nation and about average for the region, when sources of income beyond in-state wages are accounted for.
Some of the most important measures of New Hampshire's economy can be found in the tables and charts that follow.You can get a picture of how New Hampshire compares to other states by following the links.A link is provided if the data is available at the sub-state level.Additional detail can be found in the other links.
Northern NE indicators have additional statistical measures and comparisons to Vermont and Maine.
New Hampshire's diverse mix of industries allows for multiple paths for growing prosperity and makes the state economy more resilient than that of states that are dependent on fewer industries.New Hampshire has a variety of industries that are similar to the nation.The state isn't immune to economic downturns, but it is less vulnerable to widespread economic pain from the failure of a single industry.
The data are reported by the Bureau of Economic Analysis."What GDP Measures in the Economy" is a note that can be found below.Agriculture, forestry, fishing, and hunting, mining, quarrying, oil and gas extraction, utilities, construction, information, educational services, arts, entertainment and recreation are included in the "other" category.The New Hampshire economy has less than 5% of these.
New investment and up-and-coming industries are the focus of much of the attention in state economic policy.New and growing businesses bring income and talented employees to the state, they are customers for other businesses in the State, and their employees' wages are important to consumption side of the economy.
The people of the state and visitors buying goods and services is what makes up the New Hampshire economy.The retail industry makes up 7 percent of the state's GDP; the accommodations and food service sector makes 3 percent; and the wholesale, transportation, and warehousing sector that supports those industries makes 8 percent.8 percent of the economy is spent on health care.Real estate, finance and insurance are some of the industries that are fueled by our personal purchasing power.Businesses that directly serve consumers are served by the industries that serve businesses.Lawyers, accountants, and other professional service providers are part of the economy because of our personal spending.
The GDP is the market value of goods and services produced by labor and property.GDP grew by 2 percent if you hear that.The value of goods and services produced in manufacturing makes up 11 percent of the GDP.
GDP is used to measure economic growth and to describe the financial significance of different industries.
GDP is more than the total amount spent on purchases in the state.The value added within the state is what counts in a state's GDP.Take a car that was bought in New Hampshire and made in Ohio.The part of the price that is due to what the dealer did in New Hampshire is counted in the state's GDP.Ohio's GDP is the part of the price due to assembling the car.
New Hampshire is similar to the nation as a whole in the shares of its economy each industry comprises.The most significant differences are in health care and government.To see New Hampshire and national shares for other industries, point at the pie slices in the graph above or the supplemental table below.
While the value of goods and services produced is a good measure of where economic resources are allocated and income is generated, the levels of employment in different industries are more indicative of how the working population of the state is experiencing the economy.The share of employment in an industry can be different from the economic value it produces.Finance and insurance make up 8 percent of GDP, but only 4% of employment.9 percent of the jobs are in accommodations and food services, which is a category consisting of hotels and restaurants.
The pie slices in the graph above can be used to see New Hampshire and national shares for other industries.
The category includes mining and logging, utilities, construction, information, educational services, arts, entertainment, and recreation.The employment rate in New Hampshire is less than 5%.
Granite Staters work in a wide range of industries, from giant corporations to family-owned shops.18 percent of New Hampshire workers are employed by businesses with less than 20 employees, and 37 percent by enterprises with fewer than 100 employees.33 percent of workers are in enterprises with fewer than 100 employees, which is slightly higher than nationwide.There is an ADA table.
One of the lowest unemployment rates in the country can be found in New Hampshire.In New Hampshire, people who are able to work can find jobs.It doesn't mean they can find jobs that pay them what they want, or that they are fully employed, but there is no shortage of jobs.There is an ADA table.
Despite a particularly tight labor market, New Hampshire's median hourly wage is only slightly above the national median, and among the New England states tops only Maine by a meaningful margin.New Hampshire's industrial mix is close to the mix of the nation as a whole and wage levels are not surprising given that they are closely associated with industry.There is an ADA table.
New Hampshire has a lower share of workers covered by union contracts than most of the New England states.There is an ADA table.
Median household income is the point in the income distribution where half of households receive more and half receive less.Cash transfer payments such as Social Security, unemployment, and child support are included in the income measured.There is an ADA table.
New Hampshire is one of the ten highest-median-household-income states, even though its national rank in wages paid by in-state employers is near the bottom.Many high-income people who live in New Hampshire earn their wages in other states, which is the most likely explanation for the discrepancy.New Hampshire residents commute to jobs in other states for 12 percent of their total earnings, second only to New Jersey.No other state has a higher percentage than 10 percent.
The poverty rate is a measure of the share of people whose incomes fall below a specific threshold.New Hampshire had the lowest poverty rate in the country.It's not ideal to have over 7 percent of the people living in poverty in a relatively wealthy state.The northern part of the state has a higher poverty rate than the southern part.There is an ADA table.
The people of New Hampshire have created a healthy and diverse set of industries through their labor, spending and investment, are relatively well-off compared to other states, and work in a labor market where jobs are plentiful.Wage levels in the state are barely higher than the national median.Over 7 percent of people living in poverty commute to well-paying jobs in other states.
The tables and text give a view of the New Hampshire economy.Economic trends over the last decade are discussed in this section.
After the Great Recession, the people of New Hampshire joined the rest of the country in recovery.The recovery has been less dramatic because the recession wasn't as deep in New Hampshire as it was in the rest of the country.In 2016 the state topped the national growth rate for the first time in seven years, but then fell behind in the following two years.
The number of jobs in most of New Hampshire's industries has risen since the recession of 2010, with the exception of government.Over 9,500 jobs have been created in professional, scientific, and technical services and management firms.Data limitations do not allow us to explore changes in New Hampshire for industries within this broad category, but nationally about 30 percent of the growth has been in computer-related services.Other professional business, technical, or scientific services are included in the rest of the growth in this category.
About 9000 jobs were created after professional services in job growth.Half of the new jobs in this category have been in temporary help services and 20% in building related services such as landscaping and janitorial services.Some of the new jobs are in waste management.
Hotels and restaurants, health care and social services, private-sector education, construction, transportation, and manufacturing have all seen healthy upswings in New Hampshire over this period.Retail jobs have gone down since 2016 but they are still up for the whole period.In the category of "other services", hair, nail, and skin care have seen the biggest growth.
There has been a decline in government employment in New Hampshire over the last nine years.Almost all of the losses in education have been experienced by the local government.
The living standards of state residents are affected by which industries have the strongest job growth.To see the average weekly wage for an industry, point at its bar in Figure 4.Job growth has been spread out between industries with weekly wages above and below the statewide average.The average weekly wage for professional services is $1,864, but more people are employed in hotels and restaurants, which pay less.
There is a cautionary note about using wage levels to compare industries.They are average weekly pay levels, which are affected by the number of hours worked.Retail workers work an average of 31 hours per job, while those in construction work 39 hours a week.Over time, the average weekly wage is the best data available for New Hampshire.Nationally, the average hourly wage in construction is about $30, compared to $19 in retail.The ability of workers to get higher wages and longer working hours is affected by the lack of negotiating power in industries.
Wages can vary greatly within industries.In New Hampshire, the median hourly wage for chefs and head cooks is $24.90 per hour, while for fast food cooks it is $10.03 and for server is $9.44.
Figure 4 is a good snapshot of which industries lead to higher average standards of living for those who work in the state.
Wage growth nationally and in New Hampshire has disappointed since the recession.Wage growth in New Hampshire slackened in the years after stronger, though by no means great.Even though unemployment was low, average wages declined in New Hampshire.In New Hampshire, real average wages have risen by just 0.6 percent since 2008, compared to 7.8 percent nationally.When the impact of the recession on the state and nation had dissipated, wages have risen in the nation by 4% compared to just 1% in New Hampshire.
Wages in New Hampshire lost ground compared to the nation and several New England states.Rhode Island moved from having an average hourly wage below New Hampshire to having a wage above it.
While improved overall economic performance and wide availability of jobs have benefited those who would otherwise be unemployed and others who benefit from a strong aggregate economy, they have not translated into meaningfully higher wages for the average New Hampshire worker.Wages have barely kept up with rising costs over the last two years.There have been reports that growth may be turning around in 2019, but there has been no sustained wage growth since 2016
The growth in the average wage since 2008 is 0.6 percent, which is faster for some jobs than for others.Many have probably seen wages lose ground to rising costs because of the low level of overall growth.
Wage growth fails to live up to expectations, so does growth in median household income.New Hampshire mirrored the country and New England in this measure, dipping after the recession and then leveling off in later years.
The varied experiences of different types of households are not captured in Figure 7.Those with jobs in different industries have different economic experiences.The data shows that many people who depend on wages are not doing well and are working longer hours to make ends meet.
The change in median income is shown in Figure 8.Accounting for inflation, the lowest-income 20 percent of the population has seen its income decline by $1,300, while the middle- income group and the highest 5 percent have seen their income increase.Long-run national patterns began in the late 1970s.In the 36 years from 1979 to 2015, the middle 20 percent of the income spectrum saw its income rise by $6,400, while the wealthiest 1 percent saw their income increase by $1,854,900.
In New Hampshire, the share of people living in poverty has been stable over time.For the official definition of poverty, the share of people living below half the poverty line is about $12,000 for a family of four in 2018).
Although poverty has been stable, there is a concern that the opportunity for children to rise in economic status above their low-income beginnings has diminished relative to the past.This situation has been highlighted in the work of New Hampshire resident Robert Putnam, in his book Our Kids, and documented in a range of research.The Opportunity Atlas shows that while New Hampshire children do fairly well in adulthood, those raised in lower-income Sullivan and Cos Counties have lower household incomes than their more affluent counterparts.
New Hampshire is a well-off state and recent trends are in line with the nation, but there are a number of challenges.We will brief you on six of them.
Average wages in New Hampshire have barely kept up with rising costs over the last few years.Wage levels reflect the mix of industries in a state, the extent to which it has more workers in higher- or lower-paying industries.The number of jobs in the state has increased in both higher- and lower-paying industries.We need both kinds of jobs, not everyone has the skills and education for jobs that are currently high-paying, but they still need jobs.More jobs in higher-paying industries and more people with the skills to perform these jobs are what we want.
Wages and income can be different by region and industry.There are more jobs that require higher levels of education in the southern part of the state.It is a cycle that leads to higher pay levels in that part of the state.
Wage stagnation is a national phenomenon that is beyond the scope of this work, and to some extent beyond New Hampshire's ability to address alone.There are certain areas in New Hampshire that deserve attention, such as the regional differences and the ways to improve job quality.The ideal scenario is that higher paying sectors will grow more than lower paying ones, a greater share of the state's population will be prepared for higher-skill jobs, and pay levels will increase for all jobs.
The economic success of individuals, businesses, and states depends on education.While the state scores higher than the national average on a number of educational measures, there are troubling gaps in educational attainment between lower income and higher income students.Funding for schools is dependent on community wealth and fourth- graders with lower family incomes score lower on reading and math standardized tests.Access to advanced placement classes is low in the state, but still lower for poorer school districts.
The cost of higher education is a challenge.According to the Institute for Research on Higher Education at the University of Pennsylvania, New Hampshire ranks last among the states in terms of affordability for students seeking higher education.New Hampshire has the third-highest percentage of 2016 graduates with student loan debt and is the state with the highest level of debt.
New Hampshire is getting older and its aging workforce will pose a challenge for the state's businesses in terms of recruiting, retaining, and expanding their workforces.New residents filling open jobs as the state's existing population ages out of work are explored in the demographic section.Concerted efforts by organizations such as Stay, Work, Play NH to both recruit and retain young Granite Staters might address some of these workforce needs and help the New Hampshire economy to flourish.
According to the New Hampshire Housing Finance Authority, median gross rent for a two-bedroom unit in the state was $1,296 in 2018, having increased nearly 19 percent in five years, and marking the fifth year in a row of rising rent costs.In May, the median single- family home price in New Hampshire reached $300,000 for the first time, driven by the state's limited housing supply.In areas with features that are desirable for second- home owners, vacationers, and retirees, the cost of housing is particularly challenging.
Poverty is low in the state.Some of the state's most vulnerable people are children, people with disabilities, and single parents, who face poverty rates that are considerably higher than the statewide rate.The share of residents who are technically poor is not indicative of the share who struggle to pay their rent, access quality child care, buy food, or save for an emergency.In New Hampshire, there are relatively few people living in poverty.
With New Hampshire's low unemployment rate and average wages, one might assume that finding adequate work wouldn't be a challenge.There are significant barriers to employment for low-income adults.Granite Staters who struggle to access work supports, such as affordable child care or reliable transportation, find it hard to remain employed.A study by the RAND Corporation found that early childhood education and care programs aimed at low-income families serve a very small share of those families.
Poor health and disability are barriers to employment.The percentage of people with disabilities in New Hampshire is 13 percent, but 26 percent of the poor population.New Hampshire has high rates of opiate-related overdose deaths and substance misuse may be an important barrier to work.
The rate at which people change their economic status is a challenge for New Hampshire.Income disparity has widened among New Hampshire families with children and academic outcomes are worse for lower income families.
New Hampshire is ranked 31st among the states in the condition of its infrastructure by the American Society of Civil Engineers.Over half of the roads in the state are in poor or fair condition.Updating the state's drinking water infrastructure would cost $857 million over the next ten years according to a state legislative study.
Poor infrastructure is an economic burden.The transit infrastructure is key to commerce, bad roads cost drivers in repair costs, and delaying repair often raises the cost of repair and the disruption it causes.
New Hampshire has many economic advantages that position it as well as it seeks to address the challenges of wage stagnation, educational upgrading, an aging workforce, housing affordability, poverty, and aging infrastructure.Its economic base is diverse and it has a well educated workforce.With foresight and will, New Hampshire can chart a course to a productive, prosperous economy that addresses these challenges and enhances the well-being of all who live here.
Various sources of survey-based data are used throughout this section.Readers should be careful when they compare estimates between groups and time periods because the surveys only ask a sample of the population.It is possible that the estimates are different due to sampling error.Due to the large sample size of certain surveys, small differences may be statistically significant.We focus on differences that are substantively meaningful and statistically significant in the text in order to provide statistical testing results for each possible comparison.