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Optimism at Vermont Economy Conference

Posted by: Leslie Black-Plumeau on January 18, 2011 - 3:08pm

heaps and woolfThe recovery is progressing well for the U.S. and Vermont, according to presenters at the Vermont Economic Outlook Conference last Friday. Mark Zandi, chief economist at Moody’s Analytics, listed five reasons he expected the economy to continue improving well:

  1. Businesses have been very profitable in recent months, which should soon translate into job growth.
  2. Household debt burdens are falling as we “right the wrongs” that hurt the economy several years back.
  3. Banks are becoming more solid and the credit crunch is abating.
  4. The level of economic activity is very low, which should translate into increased sales (and ultimately jobs) in the near future.
  5. Policy makers responded well to the challenges of the recession with monetary and fiscal policy moves that were aggressive, unprecedented, and successful.

Downside risks to the economy are the ongoing foreclosure crisis, economic crises in Europe, and efforts by China and emerging countries to slow their economies, Zandi explained.

Vermont economist Richard Heaps (left) agreed the state’s recovery is well underway. After declines in 2008-2009, real median income, house prices, and home sales volumes stabilized in 2010. Home prices are likely to increase by 1-5% annually with sales volumes increasing to near normal levels during the next few years. Job growth will be focused primarily in the health care industry, but with increases also expected in the hospitality/leisure and retail industries, explained Heaps.

UVM professor Art Woolf (right) described a longer term view of Vermont’s recovery. He predicted job growth of 25,000 jobs in Vermont by 2030. However, with no further expansion of the population of “working age” Vermonters (aged 21-64) expected, Vermont’s economic future will hinge largely on the ability of people aged 65 and up and Latin American immigrants to fill these jobs, Woolf explained.

More information about the conference is online.