April 2012

A regional economic divide within the county

[innerindex]In March, the Coos Index fell for the 11^th consecutive month on a monthly year-over-year basis. The percentage decline was the largest since October 2009. All five indicators fell on a monthly year-over-year basis. The tourism industry continued to suffer from the unusually warm weather, which ended the ski season early. The manufacturing sector showed no signs of rebound from the recent plunge. However, not all regions within the county are equally affected by the county’s economic woes. The NH Economic and Labor Market Information Bureau’s Quarterly Census of Employment and wages indicates a clear divide in economic performance between the two major labor market areas (LMA) within the County – Berlin and Colebrook. Unlike its neighbors in the County, Colebrook was up from the pre-recession level in terms of employment and number of worksites as of 3^rd quarter 2011. From 3^rd quarter 2007 to 3^rd quarter 2011, total employment rose by 1.3% in the Colebrook LMA, while it fell by more than 15% in the Berlin LMA. During the same period, the number of worksites rose in the Colebrook LMA by 3.3%, while it fell by 5.1% in the Berlin LMA. Since the Berlin LMA is about three times larger than its Colebrook counterpart in terms of employment, its struggle manifests itself in the county-wide economic indicators. The Colebrook labor market area, the northernmost LMA, includes Colebrook, Stewartstown, Pittsburg, Columbia, Clarksville and Dixville, while the Berlin LMA includes Berlin, Gorham, Milan and other small towns.

In March, the State economy continued to grow at a meager pace. The economic growth stalled at a measly 0.8% for past four months. The state’s employers appeared to add jobs at a much slower pace; the growth of the number of employed residents slowed to a crawl on a month-to-month basis. The manufacturing sector remained a major drag on the recovery; industrial electricity sales fell six months in a row on a monthly year-over-year basis. The economy remained vulnerable.

The real estate market analysis can be found at the end of this report.

Coincident Index

The Coos Coincident Index, which tracks the current state of the Coos economy, edged down to 89.5 in March from February’s revised value of 89.6. On a monthly year-over-year basis, the Index declined for the 11^th month in a row.

The New Hampshire Coincident Index ticked up to 96.5 in March from February’s revised value of 96.4. The year-over-year growth of the Index was little changed.

How strong are the forces of change?

In March, the Coos Coincident Index fell for the 11^th month in a row on a monthly year-over-year basis. All five component indicators were down from their March 2011 levels. The pace of decline was the largest in two years. The State Index increased 18 months in a row on a monthly year-over-year basis. Three out of four available component indicators remained up from prior year. However, the monthly year-over-year growth of the economy was little changed for three months.

Household Employment

Household employment measures the number of employed residents. In contrast to non-farm payroll employment that is more commonly used in the national and state indexes, household employment includes self-employed, unpaid domestic help and both farm and non-farm workers, all of which may be more significant in rural than urban economy. Employment tends to rise as economy grows.

Coos County

Employment index, adjusted for seasonal variation, expanded for the second month in a row. On a monthly year-over-year basis, it continued its long-term skid.

New Hampshire

Employment at the state level, adjusted for seasonal variation, was little changed. On a monthly year-over-year basis, its growth decelerated slowly but steadily for the last two months.

Rooms and Meals Revenues

It is estimated from total tax yielded from rooms and meals sales. It tends to increase with tourism activities.

Coos County

The estimated rooms and meals revenue, adjusted for inflation and smoothed by 12 month moving average, fell for the fourth consecutive month. On a monthly year-over-year basis, it fell two months in a row.

New Hampshire

The estimated rooms and meals revenue, adjusted for inflation and smoothed by 12 month moving average, rose for the seventh consecutive month. And it remained up from prior year.

Traffic Counts

It tracks the average vehicle traffic counts on Saturdays each month, which is automatically collected from traffic recorders located throughout the State. Two recorders are placed in the Coos county – Jefferson and Northumberland.

Coos County

Average Saturday traffic counts, smoothed by 12 month moving average, decreased for the second time in past four months. On a monthly year-over-year basis, it dropped 13 straight months.

New Hampshire

Average Saturday traffic counts, smoothed by 12 month moving average, fell three straight months. On a monthly year-over-year basis, it decreased for the ninth month in a row.

Wages and Salaries

The estimated wage and salaries disbursements represent total compensation including pay for vacation, bonuses, stock options, and tips. This data is obtained from all workers covered under state and federal unemployment insurance laws; in other words, it is full population counts, not sample-based estimates. Unlike the household employment report, however, it excludes self-employed, domestic workers, and most agricultural workers. For this difference, wages and salaries series complements the number of employed residents in monitoring the labor market conditions as well as the economy. A change in wages and salaries, adjusted for inflation, may reflect changes in the number of jobs, the ratio between part-time and full-time jobs, and wage rates.

Coos County

The estimated wages and salary disbursement, adjusted for inflation and smoothed by 12 month moving average, rose from prior month. Still, it remained down from a year earlier.

New Hampshire

The estimated wages and salary disbursement, adjusted for inflation and smoothed by 12 month moving average, increased from February. And, it was up from where it stood a year ago.

Industrial Electricity Sales

It measures sales of electricity (kWh) to industrial customers. Utilities categorize consumers based on the North American Industry Classification System, demand, or usages. The industrial sector includes manufacturing, construction, mining, agriculture, fishing, and forestry establishments. Among these industries, manufacturing is a primary industry in Coos County making up 69% (73% for New Hampshire in 2008) of the total number of jobs in the industrial sector mentioned above according to the 2006 QCEW data. Therefore, a rise in industrial electricity sales may largely indicate invigorating manufacturing activities in the economy.

Coos County

Industrial electricity sales, smoothed by 12 month moving average, fell for the 12^th consecutive month. On a monthly year-over-year basis, it fell for the 10^th consecutive month.

New Hampshire

Industrial electricity sales, smoothed by 12 month moving average, increased for the third time in four months. Still, it fell six months in a row on a monthly year-over-year basis.

Real Estate

NCEI reports two real estate market indicators – home sales and median home prices. The data tracks residential homes sold, including condos and manufactured homes. The health of the real estate sector is important to the broad economy due to its multiplier effect. Home transactions not only generate income for real estate brokers and mortgage bankers but also bring more businesses in other sectors including moving services, home furnishings and appliances. In order to minimize volatility in Coos real estate market, indicators are averaged over a 12 month period.

Coos County

In March, an improvement in the Coos housing market was evident in both the volume of sales and the home prices. Home sales, smoothed by 12-month moving average, registered a gain for the first time since August 2010 on a monthly year-over-year basis. Median home prices, smoothed by 12-month moving average, rose three straight months on a monthly year-over-year basis. The federal prison hiring may be a contributing factor.

New Hampshire

The state’s housing market was a bit behind its Coos counterpart, but was on track for recovery; sales were up and the pace of decline in home prices slowed. Home sales, smoothed by 12-month moving average, rose five months in a row on a monthly year-over-year basis. Median home prices, smoothed by 12-month moving average, continued to fall. But the pace of the decline stabilized at around 6% on a monthly year-over-year basis.

Leading Indicators

This section is under construction. The future reports will include building permits, initial unemployment claims, new business formation, real estate indicators and possibly freight volumes.

Technical Notes

Employment is the number of people employed from the household survey.
The current values of rooms and meals revenues are estimated using the data obtained from participating local hoteliers.
The quarterly wages and salary disbursements are smoothed into the monthly series after the current values are estimated.
These models to estimate the current values of rooms and meals revenues and wages and salary disbursements are re estimated once a year in February using updated data.
The data series reported in the dollar values are adjusted for inflation.
Seasonal factors for the number of employed residents are recalculated once a year in February using updated data. Thus, the seasonally adjusted data series are to be revised accordingly.
Real Estate data is obtained from the Northern New England Real Estate Network (NNEREN). All analysis and commentary related to the statistics is that of the authors, and not that of NNEREN.