Providence (March 2019) – 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 fourth quarter of 2018.
The briefing projects that Rhode Island’s economy stagnated in the fourth quarter of 2018. After a strong gross domestic product (GDP) growth rate in the first and second quarters of 2018, GDP is projected to have increased only 0.2 percent in the fourth quarter. Despite this, there was a 0.4 percent drop Rhode Island’s unemployment rate between the fourth quarter of 2017 and the fourth quarter of 2018—from 4.4 to 4.0 percent.
The Ocean State’s relatively weak GDP growth mirrored regional and national trends, but Rhode Island’s economy continues to underperform compared to the rest of New England and the United States as a whole. Since the beginning of the recovery in 2010, Rhode Island’s economy has experienced relatively slow growth due to persistent and internal structural problems. Particularly, the state has an aging labor force, slow labor growth, and an out-migration of highly-skilled workers. Rhode Island’s perceived unfriendliness to business and lack of business and enterprise clusters have additionally contributed in preventing the state from closing the “growth gap.”
There are signs of an economic slowdown in Rhode Island in the near term, with the Rhode Island Leading Economic Indicator projecting no expansion in the first quarter of 2019. Eight of the eleven internal factors that comprise the Rhode Island CEI positively affected economic growth in the fourth quarter of 2018, but there are indications of growth barriers in the manufacturing and leisure and hospitality industries, as well as signs that the labor market may not be strong enough to continue to grow and add jobs.
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.
For additional information, contact Edinaldo Tebaldi, Professor of Economics at Bryant University, at email@example.com.