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Commercial Department: Spotlight: Vermont: October 2018

 

Spotlight: Vermont

The Green Mountain State seeks to build long-term stability.

Vermont, also known as the Green Mountain State, is located at the northern end of the Appalachians and is renowned for its verdant forested landscape.

The state is a popular destination for snow lovers as there are nearly 50 alpine and cross-country ski resorts. The first Ben & Jerry’s ice cream shop opened in 1978 at a refurbished gas station in Burlington.

Vermont is saturated with rural areas and open spaces. Its population of 620,000 is the second-smallest among the states in the U.S., and there are, on average, only 68 residents per square mile. According to rankings from U.S. News and World Report, Vermont has the nation’s sixth-best health care system, the eighth-best educational system and is second best for public safety. Its infrastructure, however, is struggling as Vermont ranks among the bottom half of states for electricity prices, power-grid reliability, public-transit usage and quality of roads.

According to a November 2017 report from Forbes, Vermont’s $31 billion economy is the nation’s smallest, and its business costs are 12 percent higher than the national average. The state’s five-year average unemployment rate of 4 percent was the nation’s fourth-lowest but its economic outlook through 2022 is the second-worst in the U.S.

As of this past April, state revenues were up 6.8 percent year over year and were on track for the largest fiscal-year growth in five years. That was due, in part, to a 10 percent jump in personal income-tax revenue. Vermont had the fifth-lowest unemployment rate in the nation at that point (2.8 percent) and, although a shrinking workforce between 2009 and 2016 contributed to low unemployment, that trend began to change as the labor force grew by 3,200 people from January 2018 to April 2018. That was the state’s largest four-month labor-force increase since 1985. Vermont’s median household income is $55,176, Forbes reported.

Vermont is home to more than 1,000 manufacturing companies that account for about 11 percent of the state’s gross domestic product. GlobalFoundries, GE Aviation and UTC Aerospace Systems all employ at least 700 people.

Burlington, the state’s largest city, is the first U.S. city to be powered entirely by renewable energy and the number of clean-energy jobs in the state has surged 29 percent since 2013.

Vermont’s health care industry includes 14 nonprofit hospitals and more than 50,000 employees, or about 9 percent of the state’s workforce. Several large-scale employers contribute to this sector by providing electronic medical records, imaging, surgical equipment and pharmaceutical products.

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Greater Burlington commercial market

Chittenden County, which includes the Burlington metro area and more than a quarter of the state’s population, is seeing solid growth, according to a June 2018 report from commercial appraisal company Allen, Brooks & Minor. The county’s retail-property market recorded a vacancy rate of 3.8 percent as of this past June, down from 6.1 percent a year earlier, and rent prices are stable despite e-commerce taking a toll on local retailers.

The county’s office-market vacancy rate ticked up to 10.1 percent as of this past June, compared to 9.4 percent a year earlier. Chittenden County’s apartment market is particularly strong, however, with a vacancy rate of 1.7 percent, according to Allen, Brooks & Minor. Adding to the county’s commercial-property bulk is CityPlace Burlington, a $225 million mixed-use project that is expected to be fully operational by early 2021.

Focus: Technology

A 2018 report from the Computing Technology Industry Association reveals that Vermont has 1,600 tech-related companies that contribute $2.3 billion to the state’s economy. The average tech-industry job in Vermont pays $83,640 per year, compared to the average private-sector wage of $45,760. And the state saw a 32.5 percent increase from 2016 to 2017 in job postings for emerging-technology sectors, such as drones, artificial intelligence, machine learning and blockchain.

The Vermont Technology Alliance reports the tech sector accounts for about one in four jobs in the state. The number of tech jobs grew 8.3 percent from 2005 to 2014, compared to 1.2 percent for all other employment sectors, and the state’s tech industry is projected to grow by 7.5 percent annually from 2014 to 2022. The high wages paid by tech companies help to sustain the state’s traditional businesses as well, such as agriculture and food production, the alliance reported.

Unemployment

Vermont’s unemployment rate of 2.8 percent this past July was the 11th straight month the state had a rate below 3 percent. Since 2008, Vermont has consistently had a lower unemployment rate than the nation as a whole. Vermont added 4,000 jobs during the first half of 2018, according to the U.S. Department of Labor. Education and health services is the largest employment sector, followed by government; trade, transportation and utilities; leisure and hospitality; and manufacturing. c_2018-10_Spotlight_chart

The Burlington metro area, where 124,000 jobs are located, saw year-over-year employment declines this past June in the information, manufacturing, and professional and business-services sectors. The average weekly wage of $1,021 in the greater metro area as of fourth-quarter 2017 lagged behind the national average of $1,109, according to labor statistics.

Sources: Burlington Free Press, City of Montpelier, Computing Technology Industry Association, Forbes, History.com, Montpelier Development Corp., New England Real Estate Journal, Rutland Region Chamber of Commerce, Ski Vermont, U.S. Census Bureau, U.S. Department of Labor, U.S. News & World Report, Vermont Department of Economic Development, Vermont Department of Tourism and Marketing, Vermont State Fair, Vermont Technology Alliance.



3 Cities to Watch

Burlington

Located on the eastern shore of Lake Champlain, this city of 42,000 is the center of Chittenden County and its population of more than 162,000. Home to many outdoors activities, a bustling arts scene and the University of Vermont (UVM), its major employers include UVM Medical Center; People’s United Bank; Burton Snowboards; as well as Dealer.com, an auto-industry marketing company. The $225 million mixed-use project called CityPlace in downtown Burlington will feature nearly 300 apartments and about 350,000 square feet of office and retail space when completed.

Montpelierc_2018-10_Spotlight_city

Originally chartered in 1781, Montpelier is the nation’s smallest state capital, with about 8,000 residents. The city prides itself on a vibrant arts, recreation and culinary scene, as well as quality schools. Multiple grants are helping to build the $8 million Taylor Street redevelopment project, which will include 30 new downtown housing units and the city’s new transportation hub. Montpelier is within a three-hour drive of both Boston and Montreal.

Rutland

This city of more than 15,000 lost about 6 percent of its population from April 2010 to July 2017, U.S. Census Bureau figures show, but Rutland County (population 70,000) remains one of Vermont’s major employment centers. General Electric and Rutland Regional Medical Center each employ more than 1,000 people. Natural resources such as marble, slate, limestone and lumber drive the local economy. Since 1856, Rutland has been home to the Vermont State Fair, which has previously boasted entertainers such as Loretta Lynn, Roy Rogers and Vince Gill.

What the locals say

“Vermont, of course, is a tourist and recreational destination, and those two industries are major drivers of the overall state economy. … Vermont has managed to attract high-tech industries, craft breweries and self-insured (or captive) insurance companies. Businesses that serve people working in those industries, such as health care and education, have been a big part of what activity has been occurring in the years since the onset of the Great Recession. I understand,  in parts of the country, the Great Recession has been largely overcome. But, in talking with most businesspeople around rural Vermont, the recovery is still in progress.”

c_2018-10_Spotlight_local

Ray Ault
Owner/broker, Ault Commercial Realty Inc.


 

Neil Pierson is editor in chief of Scotsman Guide Media. Reach him at neilp@scotsmanguide.com or (800) 297-6061.

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