PROVIDENCE, RI – Today, the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council jointly released the Rhode Island Current Economic Indicator (CEI) Briefing for the second quarter of 2020. The Briefing details an unprecedented contraction in economic activity in Q2, with the Gross Domestic Product (GDP) declining by 40.6 percent (annualized rate). Rhode Island’s economic contraction is estimated to be more severe than that of the region and nation; the Regional Current Economic Indicator estimates that New England’s economy shrank at an annualized rate of 34.5 percent in Q2 and U.S. GDP fell by 32.9 percent.
“The economic effects of the COVID-19 pandemic were felt all over the country in the second quarter of 2020, but these data should be particularly troubling to Rhode Islanders,” said RIPEC President and CEO Michael DiBiase. “While Rhode Island is among the hardest hit states in the nation in terms of the pandemic’s public health impact, the state’s above-average contraction this past quarter is also likely connected to the same structural problems that created a ‘growth gap’ between Rhode Island and the remainder of New England during the economic upturn of the last decade,” he continued.
Employment in Rhode Island also contracted sharply in the second quarter of 2020, with recorded losses across all private industries in the state. Leisure and hospitality experienced the greatest decline by far, with a 50.3 percent reduction in employment. Double-digit job losses were also experienced by the professional and business services (12.9 percent), education and health services (13.7 percent) and trade, transportation, and utilities services (14.0 percent) industries in Q2. Interestingly, education and health services—the largest combined industry in the state—had been one of the most resilient sectors during previous downturns.
Overall, all 11 internal factors that comprise the CEI contributed to reduced economic activity in the second quarter of 2020.
The quarterly CEI, developed by economists at The Center for Global and Regional Economic Studies at Bryant University, combines several key gauges of economic activity in a single statistic that measures the overall current economic conditions in Rhode Island. It is calibrated to grow at the rate of the Real Gross State Product and, therefore, can be interpreted as the underlying growth rate of the state economy. The CEI is calculated using the most current available data for the state.
