Mirroring a state and national economy that has yet to fully recover from the 2001 recession, New Haven’s economic situation is slowly improving, analysts and public officials said Tuesday.
Although job growth has been slow in New Haven and throughout the state, demand for commercial real estate and increased business activity in recent months have signaled a more optimistic outlook for city business and government leaders.
With an unemployment rate of 7.1 percent in February — the last month for which data is available — New Haven maintained higher levels of joblessness than the state rate of 4.7 percent and the national rate of 5.6 percent. But compared to other Connecticut cities like Bridgeport and Hartford, New Haven’s rate of joblessness is low.
Still, in the year ending in February 2004, the city actually lost 64 jobs overall, even as the unemployment rate remained virtually unchanged. Throughout the greater New Haven region — where the unemployment rate stood at 5.1 percent in February — the labor market was similarly weak, with a net loss of 326 jobs.
New Haven Mayor John DeStefano Jr. said the city’s economy is “generally OK,” citing slow improvements since the recession ended in November 2001.
“You look around, you see unemployment is down a bit, but it’s still higher than it was three or four years ago,” DeStefano said. “It’s trending in the right direction.”
DeStefano said while Connecticut has thus far exhibited a “jobless recovery” characterized by economic growth but few new jobs, New Haven has been buoyed by new projects undertaken by IKEA and Pfizer.
Michael Schaffer ’72, an executive with the New Haven real estate firm C.A. White, Inc., said the Elm City is beginning to see an increase in demand for both apartments and retail space, even while the market for office space remains weak.
“We’ve come through a fairly soft economy in the last couple of years, and what’s been surprising is that New Haven has done reasonably well,” Schaffer said.
As an indication of the demand, Schaffer said his firm has been successful thus far in finding tenants for a new building at the corner of Chapel and Church streets that is scheduled to open this fall.
Joe Slepski, a research analyst with the Connecticut Department of Labor, said he did not expect manufacturing jobs to return to the city, although he said he was hopeful that retail growth would spark an overall recovery.
“New Haven is pretty much keeping up with the rest of the state in terms of the trends,” Slepski said. “Earnings seem to be up, but the jobs aren’t up.”
The state’s sluggish job growth has inspired some state politicians — including U.S. Rep. Rosa DeLauro, Attorney General Richard Blumenthal LAW ’73 and several members of the Connecticut General Assembly — to call for restrictions on outsourcing. But while New Haven and other Connecticut cities are creating few new manufacturing jobs, DeStefano said he did not think outsourcing was a major issue locally.
But Tony Rescigno, president of the Greater New Haven Chamber of Commerce, said outsourcing — particularly among high-tech companies — continues to threaten local jobs. Rescigno attributed outsourcing to what he called the “high cost of doing business” in Connecticut, but he said current plans to improve services at Tweed-New Haven Airport and Union Station may help the city grow.
“We’re in a global economy today, and getting people in and out efficiently is very important,” Rescigno said.
Both Schaffer and Rescigno said the biotechnology sector — which helped spark growth in New Haven in the late 1990s — has begun showing signs of recovery following a sharp decline in investment. Over the past three months, New Haven has seen as much new private biotech investment as in the previous year, Rescigno said.