Rotary’s economy is rebounding, but region and country are lagging behind

Rhode Island’s economy grew in the first quarter, but it lags the region and the country in its recovery from the coronavirus pandemic, according to a report released Tuesday by the Center for Global and Regional Economic Studies of the Bryant University and the Rhode Island Public Expenditure Council.

Rhode Island’s gross domestic product is expected to have grown 3.5% in the first quarter, but this is behind New England, with growth expected to be 5.2%, and the nation at 6.4%, Rhode Island Current Economic Indicator Briefing reports.

Rhode Island’s “growth gap” existed before the coronavirus pandemic and has widened in the past year, according to the report.

Rhode Island has regained a few jobs, but wage growth has been slow, 0.4% in the first quarter, and the state has not made up for losses suffered at the start of the pandemic, according to the report.

In March, total employment was still 7.9% below the 507,200 level before the February 2020 pandemic, according to the report.

“We have come a long way since our economic free fall last spring,” RIPEC President and CEO Michael DiBiase said in a press release, “but the briefing reveals nagging structural weaknesses that are slowing our recovery and make the state of the ocean more vulnerable in the future.

“Policymakers should take note of the weaknesses in the state’s industrial makeup and consider which policies could best stimulate economic development in high-growth industries,” he said.

Unemployment fell from 7.7% in the last quarter of 2020 to 7.2% in the first quarter of this year. The total number of jobs rose 0.8%, from an average of 461,000 jobs to 464,900 jobs, according to the report.

Some parts of the labor market are more struggling than others. For example, the report states that “economic activity in the leisure and hospitality industry is still severely constrained by the pandemic and job growth continues to be slow in this industry,” the report said.

Employment in leisure and hospitality grew 2.4% in the first quarter, but the sector employed just 46,700 workers in March, up from 60,800 workers in February 2020.

On the other hand, the construction “was particularly resistant to the pandemic”. Current construction employment is exceeding pre-pandemic levels, according to the report.

Construction employment rose 2.9% in the first quarter after growing 3.5% in the fourth quarter of 2020 and 8.7% in the third quarter, the report said.

General sales and gross revenue taxes rose 8.9% in the first quarter, according to the report.

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