Connecticut economy reaches top 12 in nation after hospitality sector rebounds in 2021, data shows

Buoyed by the rebound in the hospitality sector, Connecticut exited 2021 with one of the best-performing economies in the nation, but ranked in the bottom third when considering economic output for the full year, according to the data.

The Bureau of Economic Analysis reports a 7.7% increase in Connecticut’s gross domestic product in the fourth quarter of last year, covering both goods and services. That ranked 12th nationally, a notch behind Massachusetts but well ahead of New York’s 4.8% growth rate from the previous three months.

The BEA calculated Connecticut‘s GDP in 2021 at $308.7 billion, an increase of nearly $26 billion from the pandemic start year of 2020.

However, Connecticut lags most northeastern states and the nation in economic momentum before and after the onset of the COVID-19 pandemic. Between 2018 and 2021, Connecticut recorded 4.2% growth in GDP to rank 36th nationally, compared to 5% economic growth in New York and 6.4% in Massachusetts.

But Connecticut businesses are eager to hire these days. As of Friday, more than 86,000 jobs were listed on Indeed, including 26,000 on the jobsite in the past two weeks. As of the first week of March, fewer than 29,400 people were receiving unemployment benefits from the Connecticut Department of Labor, according to the data.

“This is a state that hasn’t grown as fast as we should in the last 30 years – but we are right now,” Gov. Ned Lamont said Thursday. “The state has momentum.”

US employers added 431,000 jobs in March, according to Bureau of Labor Statistics estimates released Friday. That helped push the official unemployment rate down to 3.6% from 3.8% in February.

Unemployment in Connecticut was 4.9% in February, with the state Department of Labor estimating that Connecticut employers added 7,100 jobs that month. This was enough to push the state above the threshold of 80% of jobs recovered since the start of the pandemic.

A week before the GDP estimates, Lamont told an audience in Danbury he saw Connecticut’s economy as ‘running full steam’ while highlighting booming jobs in finance, health care , life sciences and manufacturing.

“The manufacturing is on – a lot of what used to be sent overseas to China is now coming back to the United States,” Lamont told a forum sponsored by the Greater Danbury Chamber of Commerce. “A lot more capital intensive, requires a lot more training and a lot more skills – but that’s what we have to do, that’s the biggest priority I have for our state.”

While Connecticut matched U.S. gains in the manufacturing sector in the fourth quarter as a contribution to overall economic growth, it recorded its largest growth in the hospitality sector, including restaurants, which, in as a group, represent the bottom of the pay scale. Of about 4,700 restaurant jobs posted over the past two weeks in Connecticut, about 1 in 10 offered an hourly wage of $20 or more. By comparison, 40% of manufacturing openings that have been released since mid-March pay this rate or more.

“Job quality is always going to be an issue in Connecticut,” said Don Klepper-Smith, an economist at DataCore Partners who tracks Connecticut’s economy. “Any job in this economy matters, but when you start talking about the high multipliers – pharmaceuticals, chemicals, manufacturing – of course we all want those.”

While the Lamont administration won a major victory with manufacturing conglomerate ITT’s decision to move its headquarters to Stamford from New York, Connecticut remained reliant on its existing manufacturers creating jobs instead of attracting new ones. arrivals.

Other states with lower labor, real estate and energy costs have made big gains, including Ohio, where Intel plans to build two new semiconductor factories to stabilize the supply of chips to American industry. Raytheon Technologies has chosen North Carolina for a new plant to manufacture the blade sheets that go into the Pratt & Whitney jet engines that it assembles at the subsidiary’s headquarters plant in East Hartford.

In eastern Connecticut, however, General Dynamics’ electric boat subsidiary has been on a massive hiring spree as it prepares to build a new fleet of ballistic submarines. And this week, Lockheed Martin pledged to spend more than $1 billion with nearly 250 suppliers at its Sikorsky helicopter manufacturing plant in Stratford if it gets Pentagon approval for a state-of-the-art helicopter. And ASML has spent the past few years in a major upgrade of its Wilton factory where it manufactures the machines used to create chips and flat screens, with Intel among the companies buying them.

“Before, we had too many people looking for too few jobs,” Lamont said last month. “Now it’s the opposite – and shame on us if we don’t train each of the people.”

Dan Haar and Paul Schott contributed to this report.

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