Press Release from the Rhode Island Public Expenditure Council
PROVIDENCE, R.I. (December 2013) – The Rhode Island Current Economic Indicator (CEI) was revised downward in the second quarter of 2013, expanding at an annual rate of 1.6 percent. Rhode Island's economy grew at an annual rate of 2.2 percent in the third quarter of 2013, and is projected to expand at an annual rate of 2.4 percent in the fourth quarter of 2013. This is the first time since the creation of Rhode Island's CEI in 2010 that both the CEI and leading indicators are above the 2.0 percent expansion threshold. A copy of the full briefing is available at: http://www.ripec.org/pdfs/2013-Q3-CEI.pdf.
According to a briefing released today by The Center for Global and Regional Economic Studies and the Rhode Island Public Expenditure Council (RIPEC), growth in the first half of 2013 was slower than originally predicted. The second quarter overall CEI was revised down from 1.7 percent growth to 1.6 percent. This slight decline was chiefly driven by worse than anticipated employment statistics in the leisure and hospitality industry. However, the second quarter ended with better than expected growth in wage and salary disbursements, and national economic conditions such as gross domestic product (GDP). In particular, U.S. GDP growth was revised up from 1.7 percent to 2.5 percent.
The state's economic expansion gained momentum during the third quarter of 2013, and is predicted to grow even further in the fourth quarter. The observed third quarter growth is a combination of internal indicators such as tax revenue figures, increases in total wages and salaries disbursements, and job creation in some sectors of the economy. Negative third quarter employment growth in industries such as professional and business services was offset by positive employment growth in trade, transportation and utilities and construction. Moreover, positive national economic conditions such as U.S. GDP may be contributing to Rhode Island's positive third quarter growth.
Despite this positive economic momentum, Rhode Island continues to struggle with a number of internal structural issues. "While some third quarter results suggest positive trends, quarter-over-quarter employment declines in industries such as professional and business services, and slowdown in general sales and gross receipt taxes suggest that growth is not entirely consistent. These inconsistencies, combined with the state's significant labor force declines and relatively high unemployment require continued, focused attention," said John C. Simmons, Executive Director of RIPEC.
The quarterly CEI, developed by economists at The Center for Global and Regional Economic Studies at Bryant University, combines several key gauges of economic activity in a single statistic that measures the overall current economic conditions in Rhode Island. It is calibrated to grow at the rate of the Real Gross State Product and, therefore, can be interpreted as the underlying growth rate of the state economy. The CEI is calculated using the most current available data for the state.
For additional information about the RI CEI or the newsletter, contact Edinaldo Tebaldi, associate professor of economics at Bryant University, at email@example.com.