Economic Scorecard: New Haven area well positioned for coming year
Economist Donald Klepper-Smith is bullish on what the new year holds for the New Haven-area economy as it moves into the dawn of the 2020s.
“When I think of the New Haven economy, the words that immediately come to mind are ‘resiliance,’ ‘staying power’ and ‘longevity,’” said Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners and author of the New Haven Register’s Economic Scorecard. “The (economic) drivers of education and health care have held up well.”
The latest edition of the Scorecard, the penultimate one for the 2010s, saw five indicators headed in a postive direction and one remaining essentially unchanged, he said. The two indicators Klepper-Smith said were headed in a negative direction were disposable income and consumer confidence.
Two of the real strengths in the latest Scorecard came from the region’s housing market.
Housing permits, which signal the start of new home construction, spiked to 247 new units, an eight-fold increase over the number approved in 14 area communities in November 2018. The median sale price for single-family homes in the region increased by 0.9 percent, or $2,000, to $232,000, according to October data, which was the most recent information available.
“A really tremendous amount of new housing growth is starting to materialize in the market,” Klepper-Smith said. Of the total number of new housing units issued permits in the New Haven area in November 2019, 223 were in the city itself.
As an example of new residential development, Klepper-Smith cited construction of The Audubon, a 269-unit upscale apartment complex being built on the site of a former parking lot at the intersection of Audubon and State streets. The complex includes apartments as well as townhomes, with rentals ranging from $1,766 per month to $4,250 per month.
“It seems every time that I come into New Haven, there is some kind of new construction going on,” Klepper-Smith said.
He acknowledged the new housing permit growth in November was something of an outlier when compared to previous months’ gains in that category. But Klepper-Smith said the new construction represents an economic vote of confidence in the region.
The gains in the housing market came against a back drop in which two key economic indicators, disposable income and consumer confidence, were headed in a negative direction. When headed in a positive direction, the two categories often are an indicator of consumers’ willingness to spend money on new homes or big-ticket items with which to fill the new living space.
While Klepper-Smith considers the 32.1 percent decrease in consumer confidence to be something of an aberration, he said there was some reason for consumer anxiety as 2019 came to an end.
“Income growth has been lackluster lately,” Klepper-Smith said. “And in New Haven, with a change in mayoral administrations, you have to wonder whether the city’s economic growth will continue. But we’re better prepared now for another recession when it comes.”
The likelihood of Connecticut falling into a recession in the next 12 months is 50-50, he said.
“These concerns are real and tangible,” Klepper-Smith said.
luther.turmelle@hearstmediact.com
