RIPEC Study Claims RI’s Economy Grew in Q4, But Construction Jobs Fell

RIPEC Study Claims RI’s Economy Grew in Q4, But Construction Jobs Fell

On Friday, a new report asserts, “Rhode Island’s economy experienced positive results across most key economic indicators in Q4 2023.”

Rhode Island Key Performance Indicators (KPI) Briefing is generated by The Center for Global and Regional Economic Studies at Bryant University and the Rhode Island Public Expenditure Council (RIPEC).

According to the data analysis, the fourth quarter's growth in metrics included Rhode Island-based jobs, employed Rhode Islanders, labor force participation rate, and net sales tax receipts, an indicator of aggregate demand. While the state’s unemployment rate ticked up from 2.7% in Q3 to 2.9 percent in Q4, the rate remained at historically low levels, and was lower than in both the U.S. and the New England region (3.7 percent and 3.0 percent, respectively).  

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Still Below Pre-Pandemic Levels

The number of non-farm jobs based in Rhode Island increased quarter-over-quarter but notably remained below pre-pandemic levels, with the state having recovered 91.2% of jobs lost during the pandemic. In contrast, both the New England region and the U.S. have surpassed pre-pandemic jobs levels.

 

Fall in Construction Jobs

One trouble area was construction jobs. While New England and the nation saw increases in construction jobs, Rhode Island saw a decline. Under Governor Dan McKee, the largest construction project — the proposed Fane Tower, was canceled, and the Superman Building development is uncertain. Some interior demolition activities are now ongoing with a small workforce.

Construction experienced the steepest decline quarter-over-quarter of any major industry sector (2.0% decrease), but along with manufacturing, it remains one of only two sectors with greater employment than before the pandemic.

In Q3 2023, RI saw GDP growth of 3.9% over Q2 2023 (annualized), compared to 4.7% in New England and 4.9% in the U.S. GDP data from Q4 2023 are not yet available. Rhode Island has trailed the region and nation in GDP growth for the last two decades.

“The fourth quarter data are largely positive,” said Michael DiBiase, President and CEO of RIPEC. “We saw real growth across most key metrics, including the number of employed Rhode Islanders, which grew by 1,400, and non-farm employment, which expanded by 2,800 jobs. While the number of employed Rhode Islanders exceeds pre-pandemic levels, there are still 7,800 fewer Rhode Island-based jobs than before the pandemic. This suggests some level of economic vulnerability, especially considering that New England and the U.S. regained all lost jobs several quarters ago. Rhode Island’s GDP growth continues to lag the region and nation, which also points to underlying issues in the state’s economy.”

 

Hospitality Job Growth

Employment growth was split across major industry sectors in Q4 2023, with Rhode Island experiencing job gains in five sectors and losses in four. Leisure and hospitality had the highest level of employment growth across sectors (2.6% increase), but there remain 2,800 fewer jobs in this sector than before the pandemic.