Speaking at the first annual meeting of the Lincoln County Regional Planning Commission last week, noted economist Dr. Charles Colgan said he doesn’t see Maine emerging from recession until 2017.
During his remarks, Colgan said he believes the state is in a “nine year recovery cycle from beginning of the recession to recovery. That’s the longest recovery in history” longer than Maine’s post war recession and is the deepest since 1990-91, when “we got back in six years.”
The LCRPC’s meeting was held at the Gardens’ new Bosarge Family Education Center. An impressive number of attendees took part in the social hour meet and greet, and eagerly anticipate Colgan’s economic prognostications.
Colgan currently holds the Russell Chair in Education and Philosophy at U.S.M. and is a Professor of Public Policy and Management in the Muskie School where he teaches economics, policy analysis, economic development, and courses in analytic methods.
During his presentation, Colgan he gave a snap-shot of how Lincoln County has weathered (and is weathering) the Great Recession by saying, “Not a boom, not a bust.”
Before focusing on Lincoln County, Colgan said nationwide, there are many signs the economy is getting better. He noted initial claims for unemployment numbers have been coming down through 2011. “Definitely signs of things better, well at least, they’re not getting worse,” Colgan said.
He called the current national job growth “pretty good.” He noted that over 200,000 jobs were created over the past five months, “but we probably need 300,000 [jobs] per month created for the next two years to get back to where we were in 2008. That’s still very slow in relation to [recovery] history.”
Colgan said the consumer market is growing, led by auto sales that have increased over the last year, with a positive sign in February that cars hit pre-recession sales.
His forecast was the United States “will get the deficit down in 2015 closer to a more manageable position as a portion of the economy as a whole.”
Colgan also spoke of the private sector’s recovery being more solid in 2010 and 2011, but the current “major problem” is sustaining growth in 2012, and he called oil prices worrisome, pertaining to conditions in the Middle East.
Speaking of oil, Colgan said prices are much higher in the Northeast than in the rest of the country.
“[Prices are] higher here in New England than in much of the rest of the country which is a significant drag on us,” Colgan said. His “real worry” is if a barrel of oil hits $200, “then we can write off the recovery.”
Colgan called Maine’s recovery “uneven,” with job growth up and down. The January 2012 job growth number of 5000 Colgan believes is a miscalculation. “We could be looking at a significant correction in February and March because the trend has been generally flat over the last year ending 2011,” he said.
Overall Maine private sector jobs have grown but public sector jobs are consistently down. In Lincoln County, Colgan said the county had “not as nearly a bust in jobs.
“Lincoln County has a very high proportion of the self-employed, not uncharacteristic of rural Maine, with about 35-40 percent self-employed,” Colgan said.
He said the recession actually began in Lincoln County in 2004, and “that was the peak for Lincoln County, and it was 2008 for Maine. The job loss has extended over a much longer period of time…not much of a bust, and not much of a boom.”
Colgan said the “bust” came in Cumberland County, and Penobscot County and some inland counties, had “much more in job losses.”
In Lincoln County, retail is the largest employer and there’s been some job loss since 2007, consistent with the nation, “down 2200 jobs at the bottom of the recession,” he said.
Colgan said Lincoln County has an “unusually large education and health services sector,” and the service and professional industries have remained unchanged in the last 10 years.
One industry Colgan would like to see grow is tourism. Maine has the largest differential in summer population than anywhere else in the country, and a Maine State Office of Tourism survey shows the Midcoast is having “challenges” with tourism growth, “which is not as high as one would think,” Colgan said.
Overall visitors tend to come year after year, and so the biggest problem is bringing new people to Maine. “We do get repeat business, but we are not succeeding [in the Midcoast] in the overnight market; we have a real problem sustaining growth,” Colgan said.
According to Colgan, the Midcoast needs serious tourism development “so critical to all regions in the Midcoast. That’s what I would spend time on. It’s stagnant now.”
The perception that most of Maine population growth is concentrated in the coastal region is no longer true. Though there was better growth in the first half of the 2000s than in the 1990s, currently, “almost all the growth is in Oxford County, also in Androscoggin County because those are nearest to Portland and are getting the most growth, whereas Washington, Aroostook and Penobscot county populations are continuing in decline.”
Additionally, Colgan noted growth along the I-95 corridor.
The Midcoast region, particularly Lincoln and Knox counties had been the stars in the past of population growth, but “that has slowed significantly and only Waldoboro has seen significant growth” in the 1990s.
In Lincoln County, Edgecomb was the fastest growing town in the 2000s, with both Boothbay and Boothbay Harbor, and Southport losing population, and Whitefield, Jefferson and Bristol dropping significantly as well.
Reporting on the age of the population, Colgan outlined some interesting trends, with the older population heavily concentrated along the coastline and in the “inner towns between civilization and the forest,” along the Canadian and New Hampshire borders.
An aging population is of great concern when considering workforce needs; and if the state is not attracting younger workers, or if young Mainers are leaving the state, there’ll definitely be a workforce shortage in the not too distant future.
A Maine workforce survey conducted in Aroostook investigated people’s attitudes with respect to retirement, finding of individuals who looked forward to retirement, some 87 percent said, “they would like to still be employed at some level.” Such attitudes would give some “breathing room” to a younger workforce population.
“There’s no drop dead date for retirement,” Colgan said, and many believe in retirement, they’ll stay active, look for jobs that utilize existing skills that allows for flex-time, with money being the lesser of post-retirement employment concerns.
In Lincoln County, the aging population is both a constraint and [job] opportunity for servicing an older population, and for that same population as part-time, part-year basis workers.
“You have to pay attention to the population growth over the next 10-20 years,” Colgan said, “Deaths are exceeding births and in-migrants are the only way the population can grow.”
Geography and transportation will remain a challenge for Lincoln County, Colgan believes, with transportation central to economic development. “The demise of Gateway 1 was a serious blow,” Colgan said. “That work needs to continue.”
“All in all, the story of Lincoln County is one of relative stability economically, but it has suffered some in the recession,” Colgan said. However, he praised the county for taking a proactive approach with a regional commitment to planning and development, and said, “You’ve got a lot to work with, and a lot to work on.”
To learn more about the LCRPC, visit www.lcrpc.org, or call 882-5188 at 35 Water St., Wiscasset, 04578, or email: email@example.com.
For more information on Dr. Colgan, at www.usm.maine.edu/mcber/charles-s-colgan.