Scotsman Guide > Commercial > May 2018 > Department

 Enter your e-mail address and password below.

  •  
  •  

Forgot your password? New User? Register Now.

Commercial Department: Spotlight: Maine: May 2018

 

Spotlight: Maine

Maine’s economy is linked to land and sea.

Some 1,800 manufacturing companies employ more than 50,000 Maine workers, making the sector a driving force of the state’s economy and accounting for about 10 percent of its gross domestic product (GDP), according to the National Association of Manufacturers.

A number of other industry sectors feed into Maine’s manufacturing engine, including agriculture, aerospace, biotech, technology and communications — each of which also contributes to the state’s economic punch. The state exported some $2.9 billion in goods and services in 2016, International Trade Administration data shows. The major exports included fish and other marine products, transportation and electronics equipment, and paper.

In fact, Maine’s forestry industry has long been a major asset for the state and has made it one of the nation’s leading producers of paper and pulp. The state boasts some 16.8 million acres of commercial forest land, much of it composed of valuable northern hardwoods, such as American beech, yellow birch, sugar maple and spruce-fir trees.

A robust agricultural industry, including aquaculture, has made Maine a leading supplier of farm-raised seafood as well as land-grown crops such as wild blueberries and potatoes. Maine also is the largest U.S. supplier of wild-caught lobsters.

Tourism, too, is a major economic driver in Maine. A 2016 report from the Maine Office of Tourism indicates that tourists spent some $6 billion in the state that year, supporting about 106,000 jobs. In addition, some 70 percent of Maine residents participate in the ample outdoor recreational activities available in the state, such as watersports, snowshoeing and kayaking, according to a report by the Maine Outdoor Industry Association. The report notes that outdoor recreation activities in the state generate some $548 million annually in state and local tax revenue.

The state also is working to expand its technology-industry base. The Maine Technology Institute, a nonprofit, publicly-funded corporation that provides seed capital and commercialization assistance, has invested about $180 million in 2,000 projects statewide over the past 20 years and also attracted about $900 million in matching investments from the private sector.

In 2016, Maine’s economy expanded at about the same rate as the national economy overall, posting a 1.6 percent increase in GDP, compared with the national mark of 1.5 percent. The state’s economy retracted in the first quarter of 2017, recording zero growth, according to the U.S. Bureau of Economic Analysis, but it snapped back in the second quarter, posting a 2 percent jump in GDP.

skip to 3 Cities to Watch>>  

Portland industrial-property market

c_2018-05_Spotlight_chart-1.jpgThe vacancy rate for industrial properties in Maine’s largest metro area, greater Portland, dropped by more than a percentage point between year-end 2016 and year-end 2017, to a historic low of 1.25 percent, according to a market report by NAI The Dunham Group. The extremely tight vacancy rate should prompt additional construction. The problem in recent years, however, according to the report, is that lease rates have not risen fast enough to entice developers to build.

That trend started to change in 2017 and is expected to continue in the year ahead, as lease rates last year bumped up significantly compared to 2016, with the average lease rate rising $1 per square foot over that period, according to NAI The Dunham Group. At least seven new industrial-property construction projects broke ground in 2017. Even with that new construction, however, the market continues to be extremely tight. Consequently, more speculative development is planned in 2018, but even that is not expected to satisfy all of the demand for industrial space in the area, NAI The Dunham Group reports.

Focus: Aquaculture

One of the fastest-growing food-production sectors globally is aquaculture, which is projected to produce some 62 percent of all food fish by 2030, according to a report published last year by the University of Maine. Aquaculture is the farming of aquatic food, such as finfish, shellfish and plants. Maine’s aquaculture industry has a statewide annual economic impact exceeding $137 million and employs some 1,100 people across more than 100 businesses, according to the university report.

Maine has long been a supplier of fresh seafood to U.S. markets and is within a day’s truck ride of some 150 million potential customers. The state’s aquaculture sector, however, is relatively young, with nearly half of the 71 respondents to the University of Maine’s study indicating they have been in business for less than five years.

Unemployment

c_2018-05_Spotlight_chart-2.jpgDuring and since the Great Recession, Maine’s unemployment rate has continued to track below the national rate. As of this past December, the state’s unemployment rate stood at 3.1 percent, a percentage point below the national unemployment rate of 4.1 percent. During 2009, at the height of the recession-fueled job losses in the country, Maine’s unemployment rate peaked at 8.3 percent, compared the national peak of 10 percent.

Maine’s big challenge going forward is the age of its workforce, which is the oldest in the country with a median age of 44. Many young people are leaving the state after college to pursue careers elsewhere, while many older people choose to retire in the state, according to news reports. Among the suggestions from business leaders and other experts in the state to address the problem is to encourage baby boomers to stay in the workforce longer, retrain younger sidelined workers, welcome more immigrants and convince more of the 26 million tourists who visit the state each year to become residents.

Sources: Associated Press, City of Augusta, City of Bangor, Discover Orono, International Trade Administration, Mainebiz, Maine Farm Bureau, Maine International Trade Center, Maine Office of Tourism, NAI The Dunham Group, National Association of Manufacturers, Portland Press Herald, U.S. Bureau of Labor Statistics, U.S. Department of Commerce, University of Maine, Visit Maine.



3 Cities to Watch

Bangor

With a population of some 32,000 people, Bangor is a commercial center for North Central Maine, serving as the area’s largest retail and business-services center. In the 1830s, however, the city was known as the lumber capital of the world and boasted some 300 sawmills. Bangor’s Broadway region is still home to many large mansions constructed during that era. The neighborhood today also is home to internationally acclaimed horror novelist Stephen King, who based many scenes from his books and movies on actual sites in Bangor.

Augusta

c_2018-05_Spotlight_city.jpgThis city of some 18,000 people had its origins as a trading post on the Kennebec River and today is the capital of Maine. In prior centuries, the city was a hub for the wood and paper products and textiles industries, with the Kennebec River and rail lines serving as major transportation routes. Today, the city’s major employer is the state of Maine, and Augusta’s private-sector economy is driven more by high-tech and health care jobs, with major employers such as MaineGeneral Medical Center and tech employers such as SCI Systems Inc. and Microdyne.

Orono

This small town of some 10,400 residents located along the Stillwater River is home to the flagship campus for the University of Maine, the state’s largest public university with some 11,000 students. The university offers 90 undergraduate majors and academic programs, as well as 85 master’s and 35 doctoral degree programs. Orono also is home to business enterprises such as Byer Manufacturing, which produces outdoor recreational and camping equipment; Shaw and Tenney, a maker of wooden oars and paddles; Orono Brewing Co.; and the Maine Technology Industrial Park, as well as the planned Kelley Road Business Park.

What the locals say

“We’re a big manufacturing state. … We all remember how hard it was only a few years ago during the recession. We couldn’t give away industrial space. … A lot of our Maine-based businesses are [now] benefiting from a good run in the economy, and business is good for everybody. Not screamingly good, but generally good, and that creates jobs, and that creates a need for growth. So, that positive run in the economy over the past 10 years has had a major impact.”

c_2018-05_Spotlight_local.jpg

Justin Lamontagne
Partner and broker 
NAI The Dunham Group



 

Bill Conroy is editor in chief of Scotsman Guide Media. Reach him at (800) 297-6061 or billc@scotsmanguide.com.

Fins A Lender Post a Loan
Residential Find a Lender Commercial Find a Lender
Scotsman Guide Digital Magazine
 
 
 
 

 
 

© 2019 Scotsman Guide Media. All Rights Reserved.  Terms of Use  |  Privacy Policy