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Hartford Ranks 10th In GDP; State Moves To Add Jobs

By Brad Kane

October 31, 2011

Metropolitan Hartford is the 10th most productive city in the United States, and yet the region struggles to add jobs.

“We produce some very, very valuable products in Connecticut,” said Fred Carstensen, executive director for the Connecticut Center for Economic Analysis. “Yet, we’ve done a poor job translating that into jobs for our workforce.”

To address this issue, Gov. Dannel Malloy and the Connecticut General Assembly tried to reinvent the state on Thursday to spur job creation and technological innovation. Their efforts include providing financing and support for small businesses; easing state regulations; providing loans to start-ups and innovation; and further training the workforce.

“The jobs package is a great down payment on stimulating the economy and growing jobs in the state,” said Catherine Smith, commissioner of the Department of Economic and Community Development, after the legislation passed.

In its October report, the U.S. Bureau of Economic Analysis ranks metropolitan Hartford No. 10 among 366 metropolitan areas for gross domestic product per capita. The BEA considers metropolitan Hartford to be Hartford, West Hartford and East Hartford.

Hartford’s per capita GDP of $65,031 beats out nearly all other Northeast cities — including Greater New York, Greater Boston and Greater New Haven — and comes in behind the Fairfield County metropolitan area, which ranks No. 2 behind Greater San Jose in California.

Even when overall economic value — not just per person — Hartford stacks up well against the rest of the nation. The region’s overall GDP of the nation's cities, good enough to be in the top 10 percent.

And metropolitan Hartford’s economy is on the move, too. The region’s GDP grew 3.8 percent from 2009 to 2010; Hartford’s largest economic surge in three years. This growth outpaced the nation (2.5 percent growth) and the state’s other two metropolitan areas: Fairfield County (3.4 percent growth) and Greater New Haven (2.3 percent growth).

“The numbers you are talking about suggest we should be doing a lot better than we really are,” Carstensen said.

Metropolitan Hartford gets its economic wealth from the large amount of expensive products produced in the region, Carstensen said. Hartford-based United Technologies Corp., for example, manufacturers aerospace and electric generation products; and financial services and insurance firms such as the Hartford Financial Service Group and Travelers add a significant amount of value.

“If we continued down that trajectory from 2010, we would be looking to growing 55,000 jobs over the next two years,” Carstensen said. “Unfortunately, the first six months of 2011 fell behind that pace.”

Despite metropolitan Hartford’s large growing economic value, job growth in the area has remained stagnant.

At the start of 2009, the Hartford Labor Market Area — which includes more municipalities than those used by BEA — had 543,853 workers employed, according to the Connecticut Department of Labor.

By the end of 2010, Greater Hartford had 544,690 workers employed, an increase of 0.1 percent.

Job creation in Greater Hartford remained volatile in 2011, and by September, the number of people employed rose to 545,958.

A major factor in metropolitan Hartford’s inability to translate its vast economic value into jobs is government regulation, Carstensen said. Slow permitting processes and a poor business environment stymies job creation in the region.

In Malloy’s job package passed Oct. 26, the efforts to reduce government red tape include shortening timeframes for obtaining critical permits, eliminating burdensome regulations and creating a state portal so companies can access easily government programs and services.

Other efforts in the jobs package include directing $180 million in incentives toward small business growth, including job creation; providing $25 million for start-up company loans and investments; and $20 million for training programs in the manufacturing and technology sectors.

“Putting people back to work and making Connecticut more business-friendly aren’t goals owned by any one party, and they aren’t owned by any one branch of government — no single person has cornered the market on good ideas,” Malloy said after the jobs package passed. “I’m proud of what we were able to accomplish today on behalf of the residents and businesses in this state.”

How these measures help the economic and job growth of metropolitan Hartford — and reverse the bad business climate — will be determined as the programs are implemented and maintain over the long-term, Carstensen said.

Some sectors of metropolitan Hartford’s economy fared better than others. Between 2009 and 2010, the construction industry lost GDP and the leisure and hospitality industry remained stagnant.

The finance sector was a shining star of metropolitan Hartford, growing its GDP 2.4 percent between 2009 and 2010, according to BEA. The information industry and education and health services grew significantly as well.

The finance industry was able to translate its growth into jobs, said Susan Winkler, executive director of the industry group Connecticut Insurance & Financial Services Cluster, which tracks jobs posting.

“Companies are hiring,” Winkler said. “There’s more need for competition and new products.”

Winkler said the area’s finance and insurance companies are adding sales people as well employees in operations, such as risk management and underwriting.

“Overall, it is good news,” Winkler said. “The industry was hit extremely hard by the recession, so everything now is a move upward.”

Reprinted with permission of the Hartford Business Journal. To view other stories on this topic, search the Hartford Business Journal Archives at http://www.hartfordbusiness.com/archives.php.
| Last update: September 25, 2012 |
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