It has come to my attention that there are some folks out there trying to make hay out of the latest state Gross Domestic Product (GDP ) data that was recently released by the Department of Commerce’s Bureau of Economic Analysis (pdf). The data shows that between 2009 and 2010 Maine’s real GDP (meaning adjusted for inflation) grew by 2.1 percent while New Hampshire’ real GDP grew by 1.3 percent.
Well, if you look more closely at the data you quickly realize that the world has not stopped turning. Table 2 in the press release breaks down the contributions to GDP growth by industry. The one industry that created the growth difference was, not surprisingly, “real estate, rental and leasing.” In Maine that industry shrank by -0.07 percentage points but fell by -1.64 percentage points in New Hampshire. The take-away, Maine has not been as hard-hit by the housing meltdown. While good, it is also temporary.
However, there are some other bits of interesting information where New Hampshire continues to outperform Maine in key industries that set the stage for sustainable, long-term growth:
- Durable Goods Manufacturing: New Hampshire grew 0.99 percentage points (fastest in the Northeast) while Maine grew at half that rate (0.53 percentage points).
- Wholesale Trade: New Hampshire grew 0.33 percentage points while Maine grew at only 0.04 percentage points.
- Health Care and Social Assistance: New Hampshire grew 0.48 percentage points while Maine grew at only 0.01 percentage points.
- And perhaps most interesting of all . . . while Government shrank in Maine by -0.07 percentage points it shrank at twice the rate in New Hampshire (-0.15 percentage points). Yet, it’s Maine with the large public sector that’s crowding out the private sector, not New Hampshire.
Of course, if you follow my research, I don’t put a lot of stock in one year’s worth of data. To do good economic analysis you need many years, even decades, worth of data to understand what’s going on in the economy. As such, the chart below shows some data that I recently cobbled together on the difference between Maine’s and New Hampshire’s private sector employment over the last decade:
- Despite having virtually identical populations, Maine’s private sector in 2010 employed -7.5 percent fewer people than New Hampshire’s private sector (489,100 versus 525,700)
- While both states have suffered under the “Great Recession,” New Hampshire’s overall employment trend-line is up very slightly while Maine’s employment trend-line is decidedly negative.
- Since 2001, Maine has lost 17,000 private sector jobs (-3.4 percent) while New Hampshire has lost 15,700 jobs (-2.9 percent) despite having a larger workforce.
- For April, 2011, Maine’s unemployment rate was 7.6 percent while New Hampshire’s rate was only 4.9 percent.
You decide who’s economically outperforming who . . . please chime-in in the comment section.