NH Public Policy
New Hampshire Center for Public Policy Studies

Caledonian Record: Strong Growth Project For N.H. - But What About North Country?

By Robert Bletchl

While economic growth in New Hampshire as a whole is poised for big gains in the next few years, the North Country is a different story, said a N.H. economist, who on Thursday gave some projections and suggestions on what could be done to improve the region.

On Tuesday, after a conference of the New England Economic Partnership at the Federal Reserve Bank of Boston, the N.H. Center for Public Policy issued an economic outlook that says the Granite State economy is in “great shape,” businesses are adding workers at a pace not seen since 2001, unemployment is near record lows, and just about anyone who wants a job can find one.

Consumer confidence, median household income and the state meals and rooms tax - the latter growing solidly for the past four years - are on the upswing, and N.H., too, is rivaling Massachusetts for the fastest private sector growth in New England, and in just about every sector, said Greg Bird, an economist with the non-partisan and independent N.H. Center For Public Policy Studies.

But while municipalities and towns near the Boston metropolitan area are seeing gains, that economic progress has not been seen as much in Coos, northern Grafton and other rural counties, which he said have recovered little, if at all, from the Great Recession of 2008-2009.

The region, however, has seen some bright spots, including the expansion of NSA Industries onto the former Wausau Paper mill site in Groveton, new businesses and economic successes in Littleton, and a possible big redevelopment of The Balsams in northern Coos.

Still, it faces challenges, among them Coos County’s continuing population decrease.

Workers are the backbone of any good economy, and if they are in short supply, businesses can’t grow, said Bird.

According to state figures, Coos County’s current population of 33,600 is expected to decrease by 1,400 in the next five years.

Littleton’s population of nearly 6,000 is expected to remain stable during that time.

When NSA Industries held a work fair for prospective employees, they found many more than expected, but if population predictions for the county continue, Bird said businesses will find it difficult to find people to employ.

Two components underlie the projections in demographics, he said.

“We are not seeing very strong net migration, the net flow of people in and out of a region,” said Bird. “New Hampshire in the 1970s and ’80s and into the ’90s did a good job with that, but since then it’s really slowed. It’s not so much that everyone has left our state, it’s that we’re not pulling in as many people from out of state as we used to. The other part for Coos County is you have an aging region and you’re having a natural decline in the population and there is no sign of that being changed.”

The challenge going forward is like a “chicken and egg story,” he said.

A region wants to attract businesses, but businesses need a sufficiently sized workforce with the skills required for the new jobs and often pass on a region that doesn’t have one.

At the same time, skilled workers go where the jobs are.

It’s not that the workforce in Coos County or elsewhere is unskilled, but what they have might not match the skills new businesses mulling a move to a new location are looking for, he said.

Bird pointed to the words of Community College System of N.H. Chancellor Ross Gittell and said one solution is for a state and local economy to work with what it has, within its existing demographics.

And one model, said Bird, is the career and vocational center at the Littleton High School, which last year acquired three Computer Numerical Control machines to teach students as well as adults the skills that local employers seek.

“I think that’s a positive all the way around,” said Bird. “Maybe we just have to work with the resources we have through education and right-skill people for the businesses we have if it might be too much of a lift to draw people here … Economists agree that education is the best way.”

With the state as a whole now having a tight labor market, businesses will have difficulty finding employees in the next few years, and the result is the labor shortage will constrain economic growth, he said.

Additionally, many workers in their late 50s and early 60s will be retiring at a time when N.H. is not projected to see  much of an inflow of new residents and 20-somethings entering the labor force.

Without a significant pickup in attracting working-age people from out of state to move and work in N.H., the state’s employers will essentially run out of people to hire, he said.

As currently projected, that could cause the N.H. economy to grind to a halt in 2019 and 2020, said Bird.

And in rural areas like the North Country, he said there is another issue - rural hospitals and what their future funding might look like under a new presidential administration and a possible repeal or partial repeal of the Affordable Care Act.

The N.H. Center for Public Policy Studies conducts data-based research on public policy matters, develops options, informs policy makers and advises them about choices. Its mission is to improve policy debates on the issues impacting the state’s future.