The State of NHs Economy and Keys to its Future Performance NH - PowerPoint PPT Presentation

The State of NH’s Economy and Keys to its Future Performance NH House Joint Fiscal & Ways and Mean Committee Economic Briefing January 10, 2019 Brian Gottlob, PolEcon Research bgottlob@poleconresearch.com

For Much of the Recovery NH’s ’s Private Sector Job Growth Lagged U.S .S. Growth - Slow Population and Labor Force Growth, and Especially Net Out-Migration Contributed

An Increase in NH’s ’s Labor Force Has Supported Above Forecast Job Growth in New Hampshire (Along With Other Factors)

Manufacturing Job Growth in NH Has Been Especially Strong – Higher Demand Industries and Stronger Exports

NH Exports Grew Much Faster Than U.S .S. Exports in 2017 & 18, Helping the State’s Manufacturing Sector - A Higher Concentration of NH Exports Go to Countries With Which the U.S .S. Has Had Relatively Fewer Trade Frictions Source: U.S. ITA, PolEcon calculations

ports From China are a Small Percentage of Total Imports in all NE States but omplex Supply Chains Mean Producers in NE May Feel Greater Impacts than uggested Here. Source: U.S Dept. of Commerce, International Trade Association, PolEcon calculations

In the Summer of 2019 this Economic Expansion Will Become the Longest in U.S. History – But 2020 Could Bring a Hangover

The Relationship Between Private Sector Job Growth in NH and Growth in NH’s ’s Business Tax Revenue Changed in 2018

Without Anomalous Growth in the BPT & BET Revenue Growth From Economically Sensitive Revenues (9 Sources) Would Be Modest

6 of 10 NH Counties Have Had “Below Replacement” Levels of Population Growth (More Deaths than Births) – In Migration is Key - Without It Regions Will Face Shrinking Economies Source: U.S. Census Bureau, “Components of Population Change,” PolEcon

The Good News: Net State-to-State Migration into NH Has Been Resuming……….But it is Concentrated in the Seacoast and Southern Rockingham County Region Net Domestic (State-to-State) Migration 2010-2017 Rockingham 5,204 1,917 Strafford 1,553 929 Carroll 479 843 Belknap 954 364 Merrimack -112 708 2010-16 Coos -119 -122 2016-17 -609 Sullivan 49 Grafton -70 -696 -1,452 Cheshire 249 Hillsborough -7,014 -180 -8,000 -6,000 -4,000 -2,000 0 2,000 4,000 6,000 8,000 Source: U.S. Census Bureau, “Components of Population Change,” PolEcon

NH Had the Sixth Highest Rate of Net Domestic (State-to-State) In-Migration of Any State in the Nation. Demographic Issues are Challenging but Overblown and Largely Misunderstood Source: U.S. Census Bureau, “American Community Survey,” PolEcon

Unlike Other States With a High Median Age (and Many With a Lower Median Age) NH is in the Middle of States on Old-Age Dependency Ratio – Migration Trends Will Help it Remain So

NH’s ’s Low Fertility Rate is the Primary Reason for its Higher Median Age – it is Also a Sign of the State’s Success Rather than its Failure Source: U.S. Centers for Disease Control “Natality Statistics,” PolEcon

Early and Mid-C -Career Individuals are a Core Characteristic of Adult In- Migration to NH but the In-M -Migration has Been Trending a Bit Younger

is Not Monolithic! “Aging” in NH is Not Consistent Across Communities. Changing tterns Over Time Say More About Where a Community or Region is Heading Than es Median Age Median Age of Population Seabrook 37.8 2.5 9.2 Hampton 36.9 4.2 8.6 Exeter 35.3 4.7 4.9 Littleton 35.2 4.0 3.3 Stratham 33.7 4.2 6.2 NH 32.8 4.3 4.9 Rochester 32.6 4.1 5.3 Concord 33.2 3.8 2.4 1990 Nashua 32.1 3.7 2.7 Manchester 32.0 2.9 1.7 Change 90-00 Somersworth 31.5 3.4 2.9 Dover 31.6 3.9 0.9 Change 00-16 Londonderry 31.4 3.6 6.1 Portsmouth 31.1 7.4 2.6 Newmarket 29.2 3.4 2.7 0 10 20 30 40 50 60

is Not a Mystery What Attracts Younger Adults– Social, Cultural, Natural Amenities, The “Right ind” of Rental Housing (Not Just Cheap) Near Amenities . It is Community Decisions - (Not State olicies) that Largely Determine a Community’s Ability to Attract Younger People % of Adult Pop. (Age 25+) That is 25-34 Somersworth 24.7% 0.9% Portsmouth 24.5% 0.7% Manchester 23.6% 0.6% Dover 23.1% 3.0% Concord 21.6% 0.1% Nashua 21.5% 0.2% Newmarket 21.5% 3.6% NH 16.0% 0.6% Rochester 14.1% 5.1% Londonderry 13.7% 1.1% Exeter 12.2% 3.7% Stratham -0.2% 11.7% Avg. 2007-2011 Durham -1.1% 11.9% % Change 2016 Bedford 11.3% 0.2% Hampton -2.3% 9.9% Littleton 8.5% 7.3% -5% 0% 5% 10% 15% 20% 25% 30%

Housing is Key to Attracting and Keeping a Younger Demographic. To Attract Well-Educated, Skilled Millenials Quality (Not Just Cheap!) Rentals Near Amenities is Critical

A Checklist to See if a Community Can Attract Younger Demographics • Is there a “there, there,” – or does the community have a central core (even if not large) with an aggregation of dining, shopping, entertainment, retail, and other enterprises. • Are there spaces and places in the core that serve as a hub of social, cultural, and civic activity, and that serve as gathering places? • Are there higher quality rental apartments in or close to core of the community? • Are residents able to walk to the amenities (social, cultural, civic, entertainment, eating etc.) that the community offers? • Does the community have natural and recreational areas within walking distance or a short drive? • Does the community have a reputation for offering a variety of quality services and at a value relative to other communities (value not necessarily the cheapest but rather more or higher quality per dollar)? • Can residents interact digitally with local government?

The most valuable economic resource in the 21 st century is people, and more specifically brains. S . Skilled, well-educated people have the most economic opportunities and are the most mobile member of society. W . Where they locate, robust economic activity will follow.

Movers to NH Have ve Higher Levels of Educational Attainment and Add to the Skill Level of the State’s Workforce - Adding “Talent” is the Key to NH’s ’s Success and Increasingly Determines the Success Regions Within the State

The Key to Regional Growth is the Ability to Add “Talent” (Skilled Individuals With igher Levels of Educational Attainment) at Faster Rates than Other Regions. ommunities and Regions That do so Will Capture More of NH’s ’s Growth % of Adult Population (age 25+) With a Bachelor’s Degree or Higher Londonderry 33.4% 2.4% 6.1% Exeter 32.0% 6.0% 9.1% Newmarket 28.2% 4.7% 9.8% Concord 28.1% 2.6% 6.4% Portsmouth 26.6% 15.3% 15.7% Nashua 25.9% 5.6% 3.4% NH 24.4% 4.3% 6.8% 1990 Dover 24.3% 8.1% 10.2% Manchester 19.6% 2.7% 5.7% Chng. 90-00 Littleton 14.3% 8.2% 1.3% Chng. 00-16 Rochester 14.1% 1.1% 6.8% Somersworth 13.6% 5.2% 9.3% Seabrook 10.1% 4.7% 0.5% 0% 10% 20% 30% 40% 50% 60% 70%