Recession's effects underestimated
Maine will be hit harder by the recession and lose twice as many jobs as first predicted, the state's economists said yesterday.
The Consensus Economic Forecasting Commission now expects the state to lose 36,000 jobs, double the amount the commission predicted last fall, commission Chairman Charlie Colgan told the Legislature's Committee on Appropriations and Financial Affairs, the Portland Press Herald reported. The commission is forecasting a 3.8% drop in employment levels in 2009 and a 1.6% drop in 2010, mirroring levels in the 1990-1991 recession, Colgan said. The state is likely only "about halfway through the down cycle on the job losses," Colgan said, according to the Maine Public Broadcasting Network, and a full recovery isn't expected until 2013.
This recession is also affecting more employed people than previous downturns, since more people are being asked to take pay cuts, according to the Press Herald. But once the economy does bounce back, job growth will be faster than originally expected and faster than the 1990s recession, Colgan said. The commission expects to see small signs of a recovery in 2011.
The economic forecasting committee also told the appropriations committee to expect declining state revenues over the next two years, according to the Bangor Daily News. The Revenue Forecasting Committee plans to present revised state revenue estimates to the Legislature May 1.
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