Region makes list of slowest to recover

Norwich-New London area finds itself in the company of struggling Rust Belt cities

It's never good to be added to a list that's called "Nine American Cities Nearly Destroyed by the Recession."

But that's where the Norwich-New London area found itself last week when the website 247wallst.com looked at projected job recoveries throughout the United States over the coming year. The projections, based on a report by the U.S. Conference of Mayors that was prepared by the industry-forecasting firm IHS Global Insight, showed the region as the ninth-worst labor market in the country in terms of expected job recovery by year's end.

"After losing nearly 10,000 jobs during the recession, the Norwich-New London metropolitan area still has not made any positive recovery," according to the 24/7 Wall Street report.

Projections show the region, which includes Westerly, will have gained only 400 jobs by the end of the year when compared to employment numbers at the lowest point of the recession. That's a jobs recovery of only 4.3 percent.

That's pretty much in line with numbers seen by John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board, which runs employment centers for the state Department of Labor. In November and December, the region lost more than 2,000 jobs, he said.

"We still in the Norwich-New London market haven't hit a meaningful bottom, which is obviously disturbing," Beauregard said.

The problem, he said, is that any small gains in jobs at individual companies are more than offset by large layoffs that have occurred at major employers, most recently 1,100 job cuts announced by pharmaceutical giant Pfizer Inc.'s Groton laboratories. Submarine maker Electric Boat also has had a series of layoffs at the shipyard, and the casinos have been in a downsizing mode as well, laying off thousands during the course of the recession.

The surprising thing, Beauregard added, is that labor markets just north of New London County - in the Danielson area, for instance - are among the state's leaders in jobs recovery.

"I attribute that to the size of layoffs in eastern Connecticut," he said.

Beauregard said many people focus on the unemployment rate as a bellwether of a jobs market. But total jobs is probably a better barometer, he said, and those numbers on a regional basis have been in negative territory lately after a brief increase last summer.

Steven Lanza, executive editor of The Connecticut Economy and an economist at the University of Connecticut, said the Norwich-New London area is a relatively small labor region where hits to a few key industries can have a major effect.

"Not having a lot of breadth and diversity, there's no way to take up the slack," he said.

Lanza said he expects Connecticut's economy as a whole will be improving over the course of 2012, but the Norwich-New London area will continue to lag the rest of the state in jobs growth.

"Jobs are at a low point now after a couple years of recovery," he said.

And with Pfizer downsizing at least through the spring, Electric Boat facing possible delays in the implementation of a new submarine-design program, and Foxwoods and Mohegan Sun casinos looking at new competition in Massachusetts and New York, Lanza said the region likely will be up against a series of headwinds for some time to come.

The region was one of only nine metropolitan areas in the United States likely to see post-recession job growth fall below 5 percent by the end of the year, according to projections. Norwich-New London was placed in the company of such Rust Belt cities as Flint, Mich., and Champagne-Urbana, Ill., as well as casino-dependent areas as Reno and Carson City, Nev., as being among the worst-hit areas of the country in terms of projected employment growth.

By contrast, 61 of 363 metropolitan areas are expected to have recovered fully from the recession within the same period. On average, communities are expected to have regained 40 percent of their recessionary job losses by the final quarter of 2012.

"Many of the cities that will recover the least jobs by the end of this year experienced particularly heady housing markets through 2006," the report said. "As a result, they also had among the worst housing crashes in the country."

The Norwich-New London area, which in the second quarter of last year recorded the fourth-worst percentage decline in home prices of any region in the country, followed a similar pattern, though the highs were never as high and the lows not quite as drastic as in some parts of the country. For the year, a median-priced single-family home in Windham and New London counties lost 8.6 percent of its value, while condominium prices fell 13 percent.

Still, Tony Sheridan, president and chief executive of the Chamber of Commerce of Eastern Connecticut, noted that the report failed to take into account some big investments that should lead to economic growth in the coming year. This includes the $125 million Niantic River Bridge project, a new outpatient rehabilitation facility in Waterford opened by Lawrence & Memorial Hospital late last year, and an expected 300 new hires by Electric Boat.

"I see the area as stabilizing," Sheridan said.

l.howard@theday.com