New Hampshire’s hardy economy makes campaigning tricky

Posted July 05, 2011, at 7:31 p.m.

PORTSMOUTH, N.H. — Last week in Salem, Republican presidential candidate Mitt Romney told voters that President Barack Obama’s economic policies “didn’t work” and that “people are hurting.” The next day in Raymond, fellow candidate Michele Bachmann told voters they couldn’t “afford four more years of millions of Americans out of work.”

Those gloomy pronouncements don’t exactly reflect the full economic picture in New Hampshire, a swing state that will hold the first primary in the nation early next year. While the unemployment rate nationwide was 9.1 percent in May, it dropped to 4.8 percent here — giving the state the third-lowest rate in the country.

With an economy diversified among a robust high-tech sector, professional services, retailing and tourism, New Hampshire has weathered the recession far better than some other early primary and caucus states like South Carolina (10 percent unemployment), Florida (10.6 percent) and Nevada (12.1 percent). With its skilled workforce and highly educated population, it has maintained the lowe st poverty rate in the country in recent years.

At first blush, those economic conditions would suggest that Republicans may have a difficult time making their case that Obama’s economic policies have failed. But voters’ views of their circumstances are far more sour than statistics would indicate, and their uneasiness could make it tricky for the president to campaign on the state’s economic successes.

“Most of the economic indicators that you can get at the state level, we’re doing damn well,” said Russ Thibeault, president of Applied Economic Research in Laconia. “But I don’t think people in New Hampshire feel that much better than people in Florida or other distressed states. … There is a reality lag.

“So anybody campaigning in New Hampshire thinking that they are going to tout the New Hampshire economy and how great it’s doing — I think they’ll have a credibility gap.”

In many ways, the economic picture in New Hampshire in 2011 is the reverse of what it was in the 1992 election, which also pivoted on economic issues. At that time, the housing market had collapsed and five community banks had closed in one day. Then-Arkansas Gov. Bill Clinton, eyeing a general election race against an incumbent president, seized opportunity.

“He was coming here talking about how the economy was devastated and he was going to help New Hampshire, just like candidates go to Michigan now,” said Ross Gittell, a professor of management at the University of New Hampshire’s Whittemore School of Business & Economics.

“Now, they really could point to what’s right about the economy. But people don’t want to hear about what’s right in New Hampshire. They want to hear about all the problems and what they’re going to do about it.”

Gittell and several other economists said New Hampshire’s diversification and its competitive high-tech sector helped buffer the state from the magnitude of job losses in other parts of the country. The state didn’t have as many of the lower-skill technology jobs that were vulnerable to decline and competition, in part because it had already shed many of them in the tech bust of the earl y 2000s.

New Hampshire is also closely intertwined with Boston’s economy, yet it has lower operating and real estate taxes than Boston, Gittell noted, giving it a competitive advantage.

It also has a three-season appeal to tourists — in the coastal town of Portsmouth, the sidewalks around Market Square were crowded with holiday shoppers this weekend, and the bars overlooking the harbor teemed with tourists until well after midnight.

Still, voters can easily find less optimistic cues. Lawmakers recently passed major cuts to the state budget that will affect social services. And though the collapse in the housing market was much more pronounced in early 1990s, home prices have fallen across the state. Foreclosures are up 21 percent from last year.

In a recent University of New Hampshire/Boston Globe poll, nearly three-fourths of respondents said a friend or relative had been laid off in the past two years, and more than a third said someone in their household had been without a job at some point over that period.

Granite staters were almost evenly split in another UNH poll when asked whether they would see “good times” or “bad times” in their state over the next year. Less than a third said good times were ahead for the nation; half expected bad times.

“People still aren’t that comfortable with their own personal household finances,” said Andrew Smith, the director of the UNH Survey Center. “And it’s the national economy that drives votes.”

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