The New Hampshire economy has been through a lot over the past decade. The 2008 recession hit the Granite State particularly hard, due in part to the massive hit the manufacturing industry took in our state.
A recent episode from New Hampshire Public Radio’s show, The Exchange, took a look at what was going on in New Hampshire when the 2008 recession first hit, and how the economy has changed since then:
New Hampshire Economy: 2008 Recession
Russ Thibeault, President of Applied Economic Research, said about 25,000 homes went into foreclosure and 30,000 jobs evaporated.
“One of the interesting things about this recession was that it was a bottoms-up recession., meaning that it started in the mortgage offices,” he said. “People were getting into mortgages that they could not sustain.”
In New Hampshire, Russ said a big warning sign was that the days on market for home sales were beginning to increase.
“Today we have a 4-month housing inventory,” he said. “At the trough of the recession we had a two-year inventory of houses. People were afraid to buy.”
The recession came on slowly at first for New Hampshire.
“We didn’t know we were in a recession during the first 9 months,” said Brian Gottlob, Principal of PolEcon Research. “Then rapidly, it all fell off.”
Brian said the state never fully recovered from the recession in terms of construction.
“After the recession, the people who recovered fastest and first were higher-income households,” he said. “The incentive was there for builders to focus on more expensive homes instead of more moderately priced homes.”
That is one contributing factor to the housing shortage New Hampshire is experiencing today, in addition to challenges for builders across the state, higher material prices and a shortage of construction workers.
Jobs Take a Hit
One of New Hampshire’s biggest casualties from the 2008 recession was manufacturing jobs.
“Manufacturing always takes a hit in a recession because demand falls,” Brian said. “We manufacture a lot of capital goods as opposed to commercial goods. Business investment fell off dramatically, and as a result, we saw about a 15-16% decline in our manufacturing employment.”
Jeff Feingold, Editor of the New Hampshire Business Review, added that New Hampshire manufacturing is reliant on exports internationally.
“The export market tumbled which affected employment in NH and around the country,” he said.
Though many Americans still feel some bitterness about the large government bailouts during the recession, Russ said it needed to be done, or else the situation could have been much worse.
“Among the companies bailed out by the U.S. was Chrysler and General Motors,” he said. “Several companies in NH were manufacturers for the automobile industry.”
New Hampshire Economy: Recovering from the 2008 Recession
The recovery from the 2008 recession has been a slow crawl.
“By and large we’ve recovered, but it took us 10 years,” Russ said. “This is probably the slowest recovery in history.”
He added that New Hampshire has added up to 55,000 jobs since then, which is great performance for the state. However, housing is still short about 20,000 homes. That can hinder overall state growth, because bringing young professionals to the state means providing affordable housing and excellent schools.
UK-based BAE Systems, a multinational defense, security and aerospace company, recently announced that it will be calling Manchester home, bringing 400 jobs to the area.
But Manchester may not be ready for that, Jeff said.
“The challenge is taking this influx of opportunity for Manchester and turn it into community development – improving services, amenities and schools.”
Another major opportunity for Manchester comes from world famous inventor Dean Kamen, who has teamed up with scientists and biomedical engineering firms to manufacture human organs on a mass basis. He has brought the Advanced Regenerative Manufacturing Institute (ARMI) to Manchester to meet that goal, and become the hub of this new technology.
“If New Hampshire could become the place where regenerative tissue happens, then someone who is interested in that will think, how could I get involved? How can I get there?” Russ said.
These exciting new opportunities might give the construction industry the nudge it needs to invest in more affordable housing for young professionals, but we will see how Manchester and the rest of the state respond in the coming years.