The Register Citizen (Torrington, CT)
After pandemic year losses, state’s economy exited 2020 with a surge
The Connecticut economy roared to life in the final three months of 2020, according to federal estimates on Friday, trailing behind only South Dakota, Texas and Utah nationally.
The Bureau of Economic Analysis calculated a 7 percent increase in Connecticut’s gross domestic product in the fourth quarter, including the value of services, well out front of the 4.3 percent gain in GDP for the United States as a whole.
Financial services and insurance led all sectors in the nation for growth at 12.7 percent, with Connecticut home both to an array of insurance underwriters like Cigna in Bloomfield and General Reinsurance in Stamford, as well as hedge funds like Bridgewater Associates in Westport and AQR Capital Management in Greenwich.
BEA estimated Connecticut’s total economic output at $288.9 billion for 2020, slightly off the pace of the $290.7 billion total of the fourth quarter of 2019. But with a hot spring housing market and a fresh round of federal relief funding driving extra spending, the state could be set up for a strong start to 2021. BEA is scheduled to release first quarter GDP estimates in late June.
Among Northeast states, New York was hit hardest last year with a 5.9 percent overall decline in economic activity. Massachusetts had the shallowest decline with a 3.8 percent drop.
In mid-March, the head of the Connecticut Business & Industry Association reminisced on the fears in March and April last year for a sustained recession or depression, which the state and nation were able to dodge despite closures of business establishments.
“A ... defining moment for me was returning with my family from our vacation on March 15 — a year ago yesterday — and landing in a very empty Bradley airport, driving on a very empty I-91, and then stopping at a very empty grocery store in hopes of getting some supplies and toilet paper,” said CBIA CEO Chris DiPentima during his association’s annual meeting on March 16. “It was a very surreal time.”
Since the early days of the pandemic, Gov. Ned Lamont has cited decisions to keep sectors of the economy open, including manufacturing and construction. Many Connecticut employers were successful otherwise in adapting to remote working arrangements.
But the state absorbed an economic shock, with some 580,000 workers drawing on unemployment insurance benefits at some point in 2020, out of a statewide work force of more than 1.8 million on the eve of the pandemic.
Companies employing hundreds of thousands more got assistance through the Paycheck Protection Program in exchange for agreeing to keep workers on payrolls.
“There’s a lot of people out there who ... can’t pay their mortmass gage and they’re going to food lines,” said Kurt Westby, commissioner of the Connecticut Department of Labor, in a Monday interview. “We’ve distributed $7.5 billion in benefits. This is keeping individuals from going under — and as far as I’m concerned, it’s keeping the state from going under in terms of a recession.”
On Thursday, Lamont discussed Connecticut’s plans to accelerate vaccinations to any resident age 16 and above as of the start of April, with the expectation of new shipments from Johnson & Johnson and as infection and hospitalization rates begin creeping upward.
“We’re not out of this yet,” Lamont said. “We’re ... pedal to the metal, doing everything we can to get more people vaccinated.”