PROVIDENCE, RI – Rhode Island is in the midst of a protracted economic downturn, according to the Rhode Island Current Economic Indicator Briefing for the fourth quarter of 2020, published today by the Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council.
Economic data for Q4 2020 are mixed, with evidence of a slump in December compared to November. After expanding by 35.5 percent in Q3, Rhode Island’s Gross Domestic Product (GDP) is projected to have decreased by 2.0 percent in Q4. While Rhode Island’s unemployment rate declined from 11.6 percent in Q3 to 7.5 percent in Q4, the state’s unemployment rate for December (8.1 percent) paints a more troubling picture than its November rate (7.3 percent). Driving relatively high unemployment were job declines in two of the state’s largest employment sectors: leisure and hospitality and education and health services. Employment in financial services and manufacturing were also down in Q4, while employment was slightly up in professional and business services, construction, information, and trade, transportation, and utilities. Rhode Island saw positive gains in general sales and gross receipt taxes, which grew by 6.8 percent in Q4.
The Briefing also highlights that Rhode Island’s long-standing “growth gap” has persisted well into the pandemic; the Ocean State’s GDP growth has trailed that of both the U.S. and the New England Region since at least 2015, and a job-creation index of the last five years (pictured below) shows that both Rhode Island and New England lag the nation in this measure.
“The data indicate that long-standing systemic weaknesses in Rhode Island’s economy have persisted into the pandemic, and economic recovery and growth likely will be protracted,” commented RIPEC President and CEO Michael DiBiase. “Policymakers should be considering structural changes to help spur growth and get the economy back on track,” he continued.