2015 Regional Report: The Northeast

#24 New Hampshire: On a Slow Growth Track

THE GRANITE STATE is still below pre-recession job levels. Jobs are returning—s-l-o-w-l-y, but two-thirds of the new jobs pay below-average wages. Manufacturing, traditionally the state’s
breadwinner, is declining, but it still dominates the labor market. After five straight years of diminishing job totals, the sector is expected to start adding jobs this year, albeit at a barely-there .4 percent rate.

Dennis Delay, economist at the New Hampshire Center for Public Policy Studies, says the state struggles with declining rates of in-migration and an aging work force. This year through 2020, he projects 2.5 percent real economic growth, while the annual job growth will remain under 2 percent. Most new jobs will be in professional and business services, followed by hospitality, leisure services, education and healthcare.

Government efforts to promote the state to employers and/or to foster job creation have come under criticism; last year, a state audit deemed over half the state’s tax credits issued were awarded erroneously or without documentation; expect incentives to be awarded more cautiously now. The Tax Foundation ranked New Hampshire’s state and local tax burden 43rd highest out of 50 states and ranked it 8th in business tax climate. New Hampshire spends over $39 million in incentive programs.

#36 Maine: Coming Out of the Woods?

WHEN PRIDE MANUFACTURING of Burnham announced it was bringing Lincoln Logs manufacturing from China to Maine, state business advocates cheered long and hard. The deal, however, hardly reversed the state’s persistent manufacturing decline. Once accounting for one in every three Maine jobs, factory work now represents 1 in 12—and most are in shrinking industries.

Heavily reliant on forest products, Maine has struggled for years to bolster declining wood and paper product sales. The Pine Tree State’s aging population and relative lack of inbound migration stunt workforce growth. New governor Paul LePage came into office promising to cut income taxes; critics worry he’ll raise sales taxes to cover the difference.

Charles Cogan, a professor at the University of Southern Maine’s Muskie School of Public Service, and a former state economist, says economic growth picked up in 2014. He sees signs of renewed hiring this year in professional and business services, education, health care and tourism. “I think 2015 will be a fairly solid year for job gains in Maine,” he told the Bangor Daily News. “I think we will be most of the way back in 2015.”

The Tax Foundation ranks Maine’s state and local tax burden 14th highest out of 50 states and ranks it 29th in business tax climate. Maine spends over $504 million a year in incentive programs.