June 2011

June 30th, 2011 by Daniel Lee

Economy Shifting into Lower Gear

In May, signs of economic slowdown spread to the broader economy not only in the Coos County but also in the State. The Coos County Index, although it remained up from prior year, slowed in its year-over-year growth rate for the third consecutive month. All five component indicators exhibited slowing growth or accelerating decline. The manufacturing sector cooled down after leading the county economy out of recession; the year-over-year growth rate of industrial electricity sales was steadily reduced to 0.6% from its peak in last December when it marked 8.4% growth. The rebounding hospitality sector appeared to be facing a tougher fight as well; average Saturday traffic counts had fallen at a faster clip last three months, while the year-over-year growth rate of estimated rooms and meals revenue edged down two months in a row. The labor market never fully recovered from the past recession; the number of employed residents kept falling on a year-over-year basis.

The State economy followed suit. For the first time since August 2010, the State Index slowed in its monthly year-over-year growth rate. Like in the case of the Coos economy, all five component indicators showed signs of slowing growth. Contrary to what the decline in the state’s unemployment rate may suggest, the rebounding labor market may have hit the ceiling in May. The unemployment rate declined in May not because more residents found a job, but because some job seekers dropped out of the labor force and thus no longer counted as unemployed. The labor force contracted partially because some residents quit seeking employment due to gloomy job prospects, and perhaps because some people in the public sector retired for concerns over the ongoing collective bargaining issues. In fact, the number of employed residents, after seasonal adjustment, declined from prior month for the first time since the end of the past recession. There has been mounting evidence that the economy may be shifting into lower gear in both Coos County and the State of New Hampshire. Continued troubles in the housing sector are another reason for concern.

The real estate market analysis can be found at the end of this report.

June 2010

June 30th, 2010 by Daniel Lee

The economy offers caution for recovery.

In May, the economic rebound slowed for the Coos economy. Although the Coos Coincident Index managed to edge up for the fifth month in a row, only two of six component indicators contributed to the increase. Moreover, the rate of increase in the Index has slowed over the past two months. A jump in the estimated wage and salary was largely responsible for the increase in the Index. Industrial electricity sales inched up as well. However, no other indicators offered positive news. The number of employed residents slipped for two consecutive months, pointing to the sliding labor market. Both indicators of the hospitality industry – the estimated rooms and meals revenues and the average Saturday vehicle traffic counts – fell. Lastly, two consecutive decreases in home sales are indicative of the vulnerable housing market without the federal tax credit program.

The State economy did not fare much better. The New Hampshire Coincident Index slipped for the first time in four months. Half of the six component indicators contributed to the loss. On a positive note, industrial electricity sales bounced back, suggesting that the manufacturing sector chugged along. The number of employed residents edged up, but the rate of increase has slowed steadily in the last three months, pointing to a still fragile labor market. Along with the estimated rooms and meals revenues, the average Saturday vehicle traffic counts nose-dived, pointing to the vulnerable hospitality industry. Home sales took a plunge, as expected, with the expiration of the federal tax credit program.