RIPEC Releases Economy Volume in Rhode Island in Context Series

Rhode Island Public Expenditures Council

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RIPEC Releases Economy Volume in Rhode Island in Context Series

PROVIDENCE R.I. (October 2019): Today, the Rhode Island Public Expenditure Council released the third of three volumes that comprise “Rhode Island in Context: Regional and Historic Trends,” 2019 Edition. The full volume is available here

“Rhode Island in Context” provides summaries and analyses of the most current national, regional, and state data that measure the Ocean State’s population trends, economy, and government finance against national and regional averages over decades. 

“As the final volume in our ‘Rhode Island in Context’ publication, the economy volume provides a detailed description of the economic landscape of the Ocean State,” said John Simmons, CEO and President of RIPEC. “The figures provided and analyzed in this volume offer valuable insight into trends in employment, economic output, and other fiscal indicators,” Simmons continued.

“Volume I: Government” focused on government finance, providing data and analyses related to government expenditures, revenues, taxes, caseloads, and economic forecasting.
 
“Volume II: Population” offered data and analyses related to Rhode Island’s historic and current population, in addition to future projections. It provides a population overview, as well as data revealing trends related to migration, income, health insurance, social assistance, and education. 

Finally, “Volume III: Economy” lays out regional and historical data on the economy, covering economic indicators, employment, gross domestic product (GDP), trade, housing, energy, business climate, and research and development (R&D). 

Highlights in Volume III include:

Economic Indicators
  • The Federal Reserve Bank of Philadelphia’s August 2019 state coincident index score for Rhode Island was 128.73, which ranked fifth among New England states and slightly below the U.S. average of 128.88.
Employment
  • Rhode Island’s unemployment rate has been on par with the national rate but remained consistently higher than that of New England since 2016. 
  • The ratio of job postings to unemployment claims in Rhode Island suggest a tight labor market in Q2 2019.
  • Since 1997, the only private industries that have seen employment decrease in nominal terms in Rhode Island are manufacturing and information, which decreased by 48.8 percent and 41.5 percent respectively. The greatest increase in employment over this period was in the professional and business industry (44.3 percent).
  • It is projected that Rhode Island will see employment increase by 5.9 percent between 2016 and 2026. The largest share of this increase is projected to be in accommodation and food services occupations, which are expected to comprise 15.0 percent of the overall increase. 
GDP
  • Between 1979 and 2018, Rhode Island’s GDP grew at an average annual rate of 5.2 percent, while New England saw an annual average growth rate of 5.6 percent and the United States grew at an annual average rate of 2.3 percent. Between 2008 and 2018, the Ocean State’s GDP grew at an average annual rate of 2.5 percent, compared to 3.1 percent in New England, and 1.6 percent in the United States.
  • In general, Rhode Island’s per capita GDP has been lower than the national and regional average since 1990. Between 1990 and 2018, real per capita GDP grew at an average annual rate of 0.2 percent, compared to a 0.3 percent growth rate in New England and a 0.4 percent growth rate in the United States as a whole.
  • In 2017, financial activities made up nearly a quarter—24.7 percent—of Rhode Island’s GDP. In 2007, financial activities comprised 24.1 percent of Rhode Island’s GDP.  
Trade
  • From 2015-2018, the value of Rhode Island’s imports increased by 28.0 percent, the value of exports increased by 12.8 percent, and the overall trade deficit increased by 33.3 percent.
  • In 2018, Rhode Island’s largest international export was waste and scrap, accounting for 24.8 percent of exports overall.
  • In 2018, Mexico was Rhode Island’s top import partner, sending $2,504 million in goods to the Ocean State. In the same year, Rhode Island’s top export partner was Canada; the Ocean State exported $513 million to Canada in 2018.
Housing
  • Based on the United States Federal Housing Finance Agency’s housing price index, from Rhode Island’s pre-recession peak in Q2 2006 to present, residential property values have grown by 1.2 percent. In contrast, residential property values in the U.S. rose by 19.9 percent from pre-recession peak to present, and residential property values in New England expanded 8.5 percent from pre-recession peak to present.
  • Between 2017 and 2018, the number of single-unit housing permits authorized in Rhode Island decreased by 4.6 percent. In the same year, the authorization of single-unit housing permits increased in both the U.S. (by 4.3 percent) and New England (by 0.8 percent).
Energy
  • Rhode Island’s overall energy costs ranked sixth highest in the nation in 2017. Every New England state but Maine ranked in the top ten nationally for total energy costs in 2017.
  • The Ocean State’s energy consumption per capita was the lowest in the country in 2017, ranking 51st (rankings include Washington, D.C.). 
Business Climate
  • Rhode Island ranked 40th in the 2018 Small Business Policy Index and 37th in the 2019 Small Business Tax Climate Index. 
  • As of 2018, Rhode Island had higher rates of per capita business formations than New England and the United States.
R&D
  • In FY 2018, Rhode Island’s top contracting agency, in terms of dollars obligated, was the Department of the Navy, with 65.7 percent of Rhode Island’s FY 2018 contracts. Rhode Island’s Department of Administration was the top recipient of federal dollars in Rhode Island between FY 2008 and FY 2019, receiving over $16.0 billion in research grants.