What a difference a year makes. In January 2021, the New England Region was in the midst of recovering from a COVID-19 pandemic-induced economic downturn that saw second-quarter 2020 gross domestic product (GDP) numbers for these six states drop by 31% to 38% year over year.
At the midway point of 2021, however, the economy of this region, which includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, was quickly rebounding. Second-quarter 2021 saw substantial annual GDP growth, ranging from 5.6% in New Hampshire to 8% in Massachusetts.
Known for its history, natural beauty and outdoor activities, the New England Region offers quaint towns, breathtaking beaches and rocky coastlines. In 1620, settlers arrived from England on the Mayflower to established the Plymouth Colony in Massachusetts, the second successful English settlement in the New World following the Jamestown Settlement in Virginia.
Plymouth Rock and Massachusetts’ ample colonial history are among the reasons why the state is a top tourism attraction. It also remains the economic leader of this region. Dominated by Boston — the state’s largest city and a hub for health care, education and technology — the Massachusetts economy is a U.S. leader in information technology along with medical research and development. The state is an engineering center that includes the world-renowned Massachusetts Institute of Technology. It’s also a finance and insurance hotbed, and is home to seaports that lead the way for the region’s maritime trade.
Connecticut, the region’s second-largest economy, was once an industrial center with local companies that helped to invent the steamboat, sewing machine, lollipop and submarine. Today, the state still is a leader in the production of transportation equipment — including jet aircraft engines, helicopters and nuclear submarines. Connecticut may best be known, however, as a center for the insurance industry. State officials maintain that marine insurance for ships and cargo was started in Connecticut. Today, there are more than 100 insurance companies headquartered in the state.
Maine also boasts a bucolic setting that lures many tourists to its rocky shores, picturesque lakes and mountains in warmer months, and its ski resorts in the winter. Additionally, the state is known for its fishing industry, including the harvesting of lobsters. One of the state’s largest industries is manufacturing, which includes pulp and paper products and transportation equipment.
The remaining states in this region — New Hampshire, Rhode Island and Vermont — all have tourism in common as a major economic force. New Hampshire and Vermont share a border and have a healthy debate over which state has the best ski resorts. New Hampshire often gets the nod due to its ski areas on Mount Washington.
Rhode Island, the nation’s smallest state by area at only 1,214 square miles, is known for its health care and financial-services industries. Providence, the state’s capital and largest city, is home to many insurance companies and banks — including Citizens Financial Group, one of the largest banks in the country. ●
The Boston metro area saw losses in office-space occupancy slow to a crawl in third-quarter 2021, according to Cushman & Wakefield. The company reported that demand for office space reached a seven-quarter high point.
About 505,000 square feet of negative net absorption was recorded in Q3 2021, which might sound like a dismal figure, but Cushman & Wakefield reported that the average absorption for the preceding four quarters was negative 1.3 million square feet. The vacancy rate, which jumped from 9.1% in Q4 2019 to 14% in Q2 2021, ticked up only slightly to 14.1% in the third quarter of last year.
While absorption is increasing, the Boston office market’s overall performance is decidedly mixed. Some areas, such as the downtown Financial District and the Back Bay submarket, are still experiencing strong negative net absorption, while areas like the Urban Ring are showing positive absorption. Good news may be on the way from life-sciences companies, which are expected to buy and convert some office buildings.
Although many people may not realize it, New England remains a highly productive agricultural area and each of the states in this region help to produce the famed New England maple syrup. Massachusetts leads the group and is known for its small family farms that average about 68 acres in size.
Massachusetts has more than 7,000 farms, with about 26,000 farmers and employees, and it produces an annual market value of more than $475 million. The state produces a large volume of Christmas trees, fruits, tree nuts and berries.
Connecticut’s farming sector also remains strong through the manufacturing of dairy products, poultry, tobacco, vegetables and fruit, and forest and nursery products. The agricultural scenes in both New Hampshire and Vermont include dairy products and the aforementioned maple syrup. Vermont also has a well-known reputation for producing apples and cheese.
What the locals say
“During my 11 years building RCN Capital, the real estate marketplace in New England has never been as strong as it is today. The (price) appreciation that we have seen year over year is nearing 20% in non-owner-occupied rental properties. We’ve never seen anything like this in all the years we’ve been doing business. Typically, we see values rise somewhere in the neighborhood of 3% to 6% in year-over-year gains. So, the appreciation during the past year or so has just been tremendous. That said, investors are still finding properties to add to their portfolios, both on the single-family side as well as the multifamily side.”
3 Cities to Watch
The New Hampshire capital and the cultural center of the Granite State, Concord is a city of 44,000 residents that is known for its quaint and historic downtown, which includes the Capitol Center for the Arts, one of the state’s finest arts centers and concert venues. Located in the Merrimack River Valley, Concord has a town center that recently underwent a $14 million refurbishment. The city’s economy is dominated by government, which accounts for about 25% of local jobs.
Situated on Casco Bay, Portland is Maine’s largest city with a population of 68,000. It includes a major regional port that ships petroleum and other cargo. Tourism is a sizable local industry and the port has a bustling cruise-line business. Portland is home to the Maine Medical Center, the state’s largest health care center and a major employer. The city also has a major financial- services sector and a large presence in higher education, with eight colleges and universities within a 25-mile radius.
Named as the best place to retire in Massachusetts in 2021 by U.S. News & World Report, Springfield is the state’s third-largest city with a population of 156,000. Located in the Pioneer Valley in the southwest portion of the state near the Connecticut border, Springfield has a diverse economy centered on Springfield College, Western New England University and the headquarters for MassMutual Life Insurance Co. The city had a 5.9% unemployment rate as of October 2021.
Sources: Chicago Tribune; ABC6.com; Best Accredited Colleges; Cushman & Wakefield; Encyclopedia Britannica; Forbes; Greater Concord Chamber of Commerce; Maine Office of Tourism; MassMutual; New Hampshire Information Office; New Hampshire Public Radio; Outside Magazine; Patch.com; State of Connecticut; State of New Hampshire; U.S. News & World Report; VisitPortland.com; WorldAtlas.com