Report: Continued Job, GDP Growth Expected in 2024

A new report projects Connecticut will add 10,000 jobs in 2024, with the state’s economy expected to grow between 0.5% and 1%.

The latest issue of The Connecticut Economic Digest, published by the Department of Labor and Department of Economic and Community Development, forecasts job gains in most industry sectors this year.

“There’s barely a whisper of recession, though plenty of chatter that the Fed’s past tightening will eventually bring the U.S. economy back down to Earth,” University of Connecticut economist Steven Lanza notes in the report.

“Given the influence that national conditions have on state outcomes, that could translate into job losses for Connecticut, but the state’s ongoing momentum and tight labor markets suggest instead that job growth will continue.”

Connecticut employers added 24,300 jobs (1.5%) in the 12 months through November 2023—25th among all states—with the state regaining all pandemic losses in October.

The state’s economy saw its best performance of 2023 in the third quarter, with GDP growing 4.7%—27th best—after expanding 0.8% in the second quarter and 0.2% in the first three months of the year.

Economic Opportunity

“Real state GDP in 2023 was running 1.8% above 2022 levels,” the report notes. “That also represents a deceleration from 2022’s 2.9% growth but stands well above the 0.5% average annual of the last 10 years.”

An overall gain of 10,000 jobs in 2024 would represent 0.6% annual growth, which Lanza suggests is “more in line with long-run growth trends.”

“With three openings for every two jobless workers, employers are finding it frustratingly difficult to fill vacant positions,” the report notes.

“There continues to be significant demand for Connecticut products and services and that speaks to the broad, untapped potential of our economy.”

CBIA’s Chris DiPentima

CBIA president and CEO Chris DiPentima said while he agreed that the labor shortage remains the economy’s biggest challenge, “we should see that as an opportunity, not a foregone conclusion.”

“There continues to be significant demand for Connecticut products and services and that speaks to the broad, untapped potential of our economy,” he said.

“We have a real opportunity to leverage the state’s strong fiscal position to address—through meaningful, sustainable policy solutions—the factors driving the labor shortage and unlock that potential.

“That means lowering the cost of living, addressing the housing shortage, expanding access to quality, affordable childcare, and expanding career pathways—particularly for underserved communities.”

Policy Solutions

DiPentima said CBIA will continue to advocate for maintaining and protecting the 2017 bipartisan fiscal guardrails that are largely responsible for the state’s current fiscal health.

He added that the organization will also continue promoting solutions that make Connecticut more affordable for residents.

“We have every reason for optimism and to set high expectations for Connecticut’s economy—not just for 2024, but for the long-term.”

DiPentima

“Those include implementing policies like multi-employer welfare arrangements—that lower health insurance costs—for small business employees and first time homebuyer savings accounts that are popping up in other states,” he said.

“We also must increase childcare options, remove barriers to employment by streamlining occupational credentialing and licensing, and stimulate increased business investment as interest rates comes down by restoring the pass-through entity tax credit and eliminating the temporary corporate tax surcharge.

“We have every reason for optimism and to set high expectations for Connecticut’s economy—not just for 2024, but for the long-term.”

Sector Projections

Education and health services, trade, transportation, and utilities, and other services were Connecticut’s top job growth sectors in percentage terms in 2023, accounting for 87% of all employment gains.

Financial activities was the worst performing sector, losing 3,400 jobs in the 12 months through November, while construction and manufacturing posted modest losses.

The report projects that education and health services will lead job growth again this year, followed by government, information, construction, leisure and hospitality, and financial activities.

“Health-related industries will continue to lead the state’s growth sectors and not just because the state’s older demographic requires more medical services,” the report noted. “Connecticut is also a leader in the booming health technology field.”

Employment in the trade, transportation, and utilities sector was projected to decline by more than 1%, with losses also forecast for manufacturing, other services, and professional services.

The report added that the manufacturing projections “may reflect more the shortage of qualified workers rather than the lack of available positions.”

“Even amid job losses, productivity gains will allow forecasted real manufacturing output to essentially hold steady,” it said.