(HOST) Commentator Timothy McQuiston is expecting the Vermont economy to do a bit better than it did last year, and that would be pretty good news.
(MCQUISTON) Last fall Vermont reached an economic milestone that, while a bit superficial, is one that any other state would covet: Vermont posted the lowest unemployment rate in the nation for the month of October. The rate was a wafer-thin 3.1 percent. It was 3.1 percent again in November.
This is not to suggest that we should boast about the entire employment situation. For instance, the unadjusted rate for November rose four-tenths of a percent as seasonal jobs were lost. Still, this is all considerably better than the national rate, which stood at 5.4 percent in November, or more than two points higher than Vermont. Vermont’s unemployment rate has been edging down over the last few years just as the national rate has been edging up.
Other economic indicators in Vermont are also looking good. For instance, results from the Vermont Business Roundtable’s fourth-quarter survey show that over 75 percent of CEOs are expecting increases in company sales in the coming six months, which is a 6 percent increase over the last quarter.
Meanwhile, the national Roundtable’s most recent survey offered a more sobering opinion. In that survey, the Economic Outlook Index slipped three points. CEOs from across the country feel that employment will see only slow growth, sales will be sluggish and high oil prices will be a drag.
A year ago, I was thinking that 2004 and probably 2005 were going to be very good years for the economy, both locally, and, even more so, nationally. Most economists here and there thought the same. While the local and national economies have improved, I think it’s fair to say that I over-estimated 2004’s potential. There has not been the kind of job growth anywhere to indicate that the economy showed anything more than modest growth.
A better test of economic conditions likely will come this year. Already it appears that the national economy has started to grow, and that includes the long-sluggish stock market. As state economist Jeff Carr says, Vermont’s economy is dependent on the national economy. The problems he sees are the federal deficit, the uncertain international situation and continued corporate downsizing, which, of course, could affect Vermont directly. On the positive side, he sees strength in the housing market, job growth and even some expansion in manufacturing.
Tomorrow, esteemed Vermont economists Art Woolf and Richard Heaps will hold their annual economic conference. They and others will explain what happened in 2004 and what will happen in 2005, and why. My guess is that 2005 will, indeed, be a better year nationally than 2004, and that will translate into a stronger Vermont economy.
This is Timothy McQuiston.
Timothy McQuiston is editor of Vermont Business Magazine.