According to the Rhode Island Current Economic Indicator (CEI) briefing released today by the Center for Global and Regional Economic Studies and the Rhode Island Public Expenditure Council, growth was slower than originally expected in the fourth quarter of 2013, expanding at an annual rate of 2.3 percent. Rhode Island’s economy grew at an annual rate of 2.2 percent in the first quarter of 2014, and is projected to expand at an annual rate of 2.1 percent in the second quarter of 2014. Rhode Island’s 2014 first quarter economic expansion was driven by employment growth in the leisure and hospitality, construction, and professional and business service industries.
Though growth in late 2013 and early 2014 was slower than originally predicted, Rhode Island’s economic recovery is generally keeping pace with regional and national economic rates, and Rhode Island’s 2014 first quarter growth exceeds regional and national rates (2.2 percent growth versus 1.7 percent and 0.1 percent, respectively). In the first quarter of 2014, most CEI internal factors positively contributed to Rhode Island’s growth. However, initial unemployment claims were higher than recent quarters, and general sales and gross receipts taxes decreased in both 2014 Q1 and 2013 Q4.
As noted by the CEI, Rhode Island’s recent labor market trends must also be considered when assessing Rhode Island’s economic recovery. Recently released labor force data from the state’s Department of Labor and Training (DLT) suggests that although Rhode Island’s unemployment rate is improving, the state’s labor force is still 3.1 percent smaller than pre-recession levels. Additionally, the number of employed Rhode Islanders is still 5.5 percent lower than it was before the recession. These indicators suggest a fundamental opportunity to better align the state’s workforce with the demands of employers.
John Simmons, Executive Director of the Rhode Island Public Expenditure Council remarked, that “The basic foundation of Rhode Island’s economy seems to have stabilized, as we continue to have positive employment growth in selected areas. However, other indicators, such as recently-released local labor force statistics, and the income and growth potential of some major industries, remain a concern. A continued focus on ways to structurally improve Rhode Island’s economy will be required in the coming quarters.”
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.
