In New Hampshire, the economic recovery continued to slow down. The State Index fell from prior month and, on a monthly year-over-year basis, the pace of its growth declined for the fourth month in a row. The manufacturing sector appeared to be slowing; the monthly year-over-year growth in industrial electricity sales kept falling. The State’s labor market seemed to be heading south as well, the number of employed residents in the State contracted three months in a row on a month-to-month basis. Although it remained up from prior year, its year-over-year growth rate slid for the third consecutive month. Historically in New Hampshire, persistent and pronounced declines in the number of employed residents (12 month percent changes) tend to precede job losses and recession. Should this downward trend in the number of employed residents continue and fall into a negative territory on a year-over-year basis, the State may become vulnerable to a double dip recession.
The real estate market analysis can be found at the end of this report.
In July, warm weather salvaged the economy that would otherwise have been marred by the stumbling housing sector. Home sales plunged more than 40% after the end of the home-buyer tax credit. Otherwise, it was a good month for the Coos economy. Labor market unexpectedly rebounded. Industrial electricity sales were up, suggesting a continued improvement in the county’s production activity. However, it was warm weather that provided the largest boost to the economy in the midst of heightened concerns over the fledgling recovery. The estimated rooms and meals revenues and the average Saturday vehicle traffic both advanced, pointing to increased tourist activity. However, the boost to the hospitality sector is likely to be temporary and wane as the hot summer season comes to an end.
The State economy has seen a similar boost to the hospitality sector brought by warm weather in July. In addition, manufacturing activity remained strong, as reflected in a continued upward trend in industrial electricity sales. However, recent developments in the labor and housing market portend a tough road ahead in the State’s economy. The number of employed residents fell for the first time since December. Home sales plunged after the end of the home-buyer tax credit.