Q2 2012 Hartford, Connecticut Commercial Real Estate Economy

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Q2 2012 Hartford, Connecticut Commercial Real Estate Economy

The Hartford Metropolitan Statistical Area (MSA) economy would take nearly four years to recover all its Great Recession employment losses at the current pace of job gain. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm payroll employment increased by just 4,400 (0.8%) from July 2011 to July 2012, while remaining down by 16,700 (3.0%) from July 2007. Like the entire country, but with particular damage to Hartford as a state capital, the Government sector continues to lose jobs with a decrease of 1,600 (2.1%) in the year to July. Even the private sector is posting modest gains, however, with an increase of 6,000 (1.3%) that can be entirely explained by gains in the low-paid Leisure and Hospitality sector up 3,200 (7.3%) and the substantially government subsidized Education and Health Services sector up 3,800 (3.9%). Household-based data from the BLS on the number of employed residents of the Hartford area, including the self-employed, show a similarly modest gain of 5,470 (1.0%) year-over-year in June.

Government aside, Hartford has been known to have an office-based economy with particular prominence in insurance. Continuing a streak of job losses, however, the Financial Activities sector was down 700 (1.1%) year-over-year in July, including a loss of 600 (1.4%) in the Insurance Carriers and Related Activities industry. The Professional and Business Services sector gained 700 jobs (1.2%) in the year to July, and the Information sector gained 200 (1.8%), but overall the office-based sectors barely did better than break even on employment. There was some better news among the industrial sectors, with Manufacturing, another type of work concentrated here, up 1,000 jobs (1.7%) year-over-year, Wholesale Trade up 100 (0.5%) and Transportation and Warehousing unchanged. But these gains were more than offset by a loss of an additional 2,100 jobs (11.2%) in Construction and related sectors. Construction has shown a slight gain of 700 jobs (3.9%) in the year to July 2011, but apparently had not hit bottom.

Although Hartford’s relatively high average income might be attractive to consumer-driven sectors, its slow population growth and shift to shopping via the internet mean it may already have all the retailing it needs. Moody’s Economy.com projects a gain of just 3,220 (0.3%) people for the metro area in 2012, actually up from the prior two years. Household average income was up 1.8% year-over-year in the second quarter according to this source, and was well above its level before the recession. The Retail Trade sector managed a gain 200 jobs (0.4%) year-over-year in July according to CES data. The big-box General Merchandise Stores led the way within the sector with an increase of 500 jobs (6.8%). The Food and Beverage Store industry, which includes the supermarkets that anchor neighborhood centers, added 200 (1.5%). The gains were presumably offset by losses by other types of stores.