AUGUSTA, Maine — Months ahead of predictions, Maine’s economy appears to be rebounding from the recession with several indicators from job growth and increased economic activity providing significant evidence that the economy is on the mend.
“The evidence is pretty good that we are on the turn from the recession,” said Charles Colgan, an economics professor at the University of Southern Maine and chairman of the state Consensus Economic Forecasting Commission. “My projection was we would see job growth in the last quarter of the year, and we have seen it in the first quarter.”
For the first three months of this year, Maine added 2,300 actual jobs, as reported to the department of labor. That is the first period of job growth Maine has seen since mid-2007.
Colgan said that is an important indicator, but not the only one that leads him to conclude Maine’s economy is rebounding sooner than the projections he made in January.
“The trend [in Maine] was supported by job growth at the national level and by a similar pattern of growth in the other New England states,” he said. “The data that we can look at on a month-to-month basis has been pretty consistent in showing an upward trend, but also pretty consistent in showing a slow recovery to pre-recession levels.”
Colgan said it appears he was “a little too pessimistic” in his projections of the economy, but others are cautious about the economy and what may happen in the months ahead.
“While it’s good to see some growth, we could still see a month this year where we have a loss,” said John Dorrer, director of the Department of Labor’s Center for Workforce Research. “It certainly is good news to have growth, but we have a long way to go to make up the 30,000 jobs lost.”
He said the growth in jobs over the quarter was “all over the place” and not clustered in any particular sector. He said the growth was “one or two jobs at a time” and not the result of a major new employer or a major expansion of an existing employer.
“We have seen jobs added throughout the recession,” Dorrer said, “but we have also seen job losses across the state. This is the first real growth we have seen.”
University of Maine System Vice Chancellor Jim Breece is an economist that serves on the state revenue forecasting committee. He said the job growth is good news and matches the revenue numbers that have been seen in recent months.
“We have seen some positive revenue news, even with the sales tax that has lagged through the recession,” he said. “This is good news, and I will take it after all the revenue losses we have seen.”
Breece said, besides the huge job losses, the state has had a huge loss in revenues as the result of the recession. He said it would take years for the state to recover the jobs and revenue losses it has seen.
“At the rate of what we saw this last quarter, we are looking at four years before we get back to where we were,” Breece said. “I think we will do a little better than that, but you keep this in perspective.”
Colgan agreed. He said the pattern of recovery he projected this year is happening months earlier than he projected. He said that could mean the state might recover by the end of 2012, earlier than his projection in January.
“I think the reason we got out of the recession two quarters ahead of where we felt we were going to had a lot to do with the stimulus funding,” he said. “I think we underestimated the impact that some portions had on the economy.”
Colgan said the news that there was solid growth in the national economy in the last quarter of 2009 also has had an effect as employers started to hire and grow their businesses after months of no growth or layoffs.
“I am encouraged by this,” Gov. John Baldacci said Tuesday. “It coincides with what we have been seeing in our monthly [revenue] reports.”
But, he said, with an estimated 58,000 Mainers out of work and looking for work, the impact of the recession continues to affect the state. While he is pleased the recovery appears to have started earlier than projected, there is “a lot of ground” that needs to be made up before the state’s economy is back to where it was three years ago.