Connecticut Economic Overview

INTRODUCTION  Hartford Is the "Insurance Capital" Located in the heart of America’s business corridor on the East Coast, Connecticut is bordered by New York, Massachusetts, and Rhode Island and is known for its insurance and munitions industries. The state has the highest per capita income ($54,117) and the highest median household income in the nation. It offers a wide variety of tax incentives to encourage business investment. Tax credits, tax exemptions, and tax abatements are available from the state, while municipalities offer property tax incentives as well. ECONOMIC HISTORY Connecticut established a leading role in the Industrial Revolution when Eli Whitney built a factory in New Haven in 1798 to manufacture firearms made of interchangeable parts. This is considered to be the beginning of modern mass production. America’s first insurance company opened in Hartford in 1810, and by the 1870s the city had achieved the highest per capita income in the United States for the first time. Connecticut increasingly became involved in defense production, becoming known as "Democracy’s Arsenal" largely through the production efforts of Samuel Colt’s armaments factory during the Civil War. The aerospace product and parts sector, including aircraft manufacturing, has revenues of more than $7.3 billion, while Connecticut’s annual output of one $2.5 billion submarine is being doubled due to funding from Congress. In the past two decades, casinos, slot revenues, and the Connecticut Lottery have made a substantial contribution to Connecticut’s economy. The two casinos run by Native American tribes account for $1.2 billion and 12 percent of new job growth. The state receives 25 percent of gross slot revenues, amounting to $411.4 million—about 60 percent of the total $750 million that Connecticut collects in taxes from all its corporations. The Connecticut Lottery has annual sales of more than $900 million, 29 percent of which goes to the state’s general fund. AGRICULTURE Tobacco Farm The top Connecticut agricultural commodities are grown in the state's greenhouses and nurseries, accounting for roughly $273 million annually. The state has 3,900 farms (down from a peak of 22,241 in 1945), 78 percent of which are less than 100 acres. Total farm area is 360,000 acres. Dairy products yield more than $72.7 million in income, followed by eggs ($60 million), aquaculture ($27 million), and tobacco ($22 million). Although corn, apples, hay, potatoes, tomatoes, and peaches are also grown in the state, the importance of agriculture as a whole in Connecticut is diminishing. BANKING AND FINANCIAL SERVICES Connecticut’s first banks were founded in 1792, and currently their assets are worth more than $53 billion. Approximately two thirds of insured institutions in Connecticut are savings banks, and more than half (57 percent) of the loans given are for residential real estate loans. Due to the worldwide economic recession of 2008–09 there has been a rise in real estate loan delinquencies across the country, and Connecticut is no exception. There are more than 1,300 securities broker-dealer organizations in the state, with more than 12,150 employees. In addition, over 100 NASDAQ companies are headquartered in Connecticut, the top five being AETNA, Hubbell Corp., MBIA, Stanley Works, and the United Illuminating Co. COMMUNICATIONS The communications industry is one of the top six industries in Connecticut. Five major television networks make their home in the state; educational television stations also operate in the cities of Hartford, Bridgeport, and Norwich, with the Hartford and New Haven metropolitan areas having the highest percentage of cable television viewers in the nation, at almost 90 percent. The oldest U.S. newspaper with continuous publication is the Hartford Courant, founded in 1764. Aside from morning, evening, and Sunday editions of various newspapers, Connecticut also publishes magazines such asAmerican Scientist, Connecticut Magazine, and Golf Digest. Broadcasting accounts for revenues of more than $1.5 billion, telecommunications has annual revenues of more than $2 billion, and Internet service providers have yearly revenues of more than $4.5 million. CONSTRUCTION Connecticut ranks second after California for possessing the most multi-million dollar homes in the country, and although the construction industry makes up only around 3 percent of the Gross State Product ($4.4 billion out of a total of $134.6 billion), construction activity is monitored as a sign of the cycles in the overall economy. The Connecticut construction industry has 9,679 establishments employing a total of 65,479 workers. Of this amount, 2,211 are residential builders, 1,341 are residential remodelers, 409 are commercial and institutional builders, and 512 are heavy and civil engineering constructors. Finally, there are 153 highway, bridge, and street construction companies, employing a total of 2,628 workers. The average annual wage for construction workers is $43,432. EDUCATION Yale University in New Haven There are 45 institutions of higher education in the state, from Ivy League schools to community colleges. Connecticut’s best known institute of higher education is Yale University in New Haven, established in 1701, which prides itself on its exclusivity—less than 8 percent of those who apply are accepted. Tuition for students at the United States Coast Guard Academy in New London is fully paid for by the Coast Guard in exchange for a commitment to perform active duty after graduation. Aside from these, there are some 50 other colleges and universities in Connecticut, numerous boarding schools (which attract an international study body), and private day schools. The education sector has more than 6,900 employees with a payroll of $168 million. Receipts for the education industry are more than $525 million. ENERGY The state’s total per capita energy consumption is 253 million Btu, one of the lowest in the nation. Some 30 billion kWh of electricity are produced annually, and within the past three and a half decades, the use of coal to generate electric power was cut drastically from 85% to 9%, due to the increased use of nuclear energy and oil. Connecticut has two nuclear reactors located in Millstone with maximum power output of 2,103 megawatts. The electric companies employ more than 8,000 workers at an annual payroll of more than $501 million. ENTERTAINMENT Metropolitan orchestras in New Haven and Hartford play to audiences of more than 130,000, and performing arts companies in general have receipts of more than $118 million annually. Connecticut’s Film Division offers three programs of tax credits and incentives to market the state as an ideal production location, and its more than 2,800 employees earn an annual payroll of more than $111 million.    INSURANCE Phoenix Mutual Life Insurance Building, Constitution Plaza, Hartford, Connecticut Connecticut has been one of the leaders of the U.S. insurance industry since 1810, and this industry (together with finance) makes up almost a third of the $166.2 billion gross state product. The city of Hartford bears the title "Insurance Capital," and the oldest fire insurance firm in the country is Hartford Fire Insurance, founded in 1810. In an average year, there are around 2 million ordinary life insurance policies in force with a total value of $194.1 billion and the total value for all types of insurance around $337 billion. More than 100 insurance companies based in Connecticut collect premiums totaling over $7 billion. In recent years, there has been a trend to consolidate offices, reduce the local workforce, and outsource work, resulting in a loss of jobs from a peak of 83,300 in 1990 to 64,200 by 2009. MANUFACTURING Submarine Manufacturing Employing more than 184,000 workers, Connecticut's manufacturing industry produces approximately $24.3 billion worth of goods annually in more than 5,000 highly diversified establishments. Transportation equipment, such as jet aircraft engines and parts, helicopters, and nuclear submarines, are manufactured in Connecticut, as are guns and bullets, machinery, computer equipment, electronics, medical instruments, and plastics. Xerox, G.E., Champion International, Union Carbide, and Uniroyal are some of the world-famous companies that call Connecticut home. Chemical manufacturing accounts for 167 establishments employing 7,674 workers with an annual payroll of more than $504 million. The textile milling industry operates 33 mills, employing 1,000 workers at an annual payroll of more than $46 million. MINING AND EXTRACTION Connecticut’s two leading mineral commodities are crushed stone (an average annual amount of seven million metric tons with a value of $60.9 million) and construction sand and gravel (an average annual amount of approximately 7.2 million metric tons with a value of $42.7 million). Industrial sand, dimension stone (rock quarried to slabs or blocks of a particular size and shape), and clays are also produced in Connecticut, and although copper mining was plentiful from the 18th century to early in the 20th, it is no longer commercially viable. Altogether, Connecticut’s raw mineral production is valued at around $131 million, including that obtained from limestone, dolomite, granite, and gemstones. The mines currently operating in Connecticut are open pit mines and mines with preparation plants, but the industry is shrinking. The 76 mining establishments employ a total of 2,052 workers with an annual payroll of $85 million. NONPROFIT There are approximately 4,000 nonprofit organizations operating in Connecticut, serving over 3.3 million people and employing more than 180,000. Many of these organizations focus on the homeless and those with housing problems, while healthcare and youth programs are also represented. Part of the funding comes from the state, part comes from members, part comes from grants, and part comes from donations. According to the Connecticut Association of Nonprofits, the sector’s employees account for approximately 9 percent of the state’s labor force. This is about 11 percent more than the state’s finance, insurance, and real estate industries, 25 percent more than local government, and nearly 250 percent more workers than Connecticut’s construction industry. The state’s nonprofit workers earn some $5 billion annually in wages. RETAIL Connecticut is a busy commercial hub. Sales from the state’s more than 20,000 retail establishments are valued at over $40 billion, with restaurants accounting for 29 percent, food stores making up 10 percent, and car dealers and service stations bringing in 14 percent. Total annual sales of new cars by the state’s 13,722 dealers amount to some $7.5 billion. Connecticut has a school-to-career program for getting students into the retail economy, offering jobs in stores, restaurants, hotels, motels, and tourist attractions. TECHNOLOGY Connecticut has 464 aerospace companies, with estimated annual sales of more than $249 billion. This industry provides work for an approximate 30,800 people. The bioscience cluster spends more than $6 billion annually on research, development, and other operations, employing roughly 18,000 people. Some of the pharmaceutical giants operating in Connecticut are Bayer, Pfizer, and Bristol-Myers Squibb. Connecticut has over 1,000 software companies and about 3,000 infrastructure companies (hardware, telecom, and networking). The world’s first nuclear powered submarine was built in Groton in 1954, and the city is still known as the submarine capital of the world, thanks to being the home of the Electric Boat Corporation and having one of the largest submarine bases in the world. TRANSPORTATION Amtrak Acela Express at New Haven Union Station Connecticut has four interstate highways, in addition to the Merritt and Wilbur Cross Parkways. The Connecticut Turnpike (I-95) between Connecticut and New York is one of the most traffic jam–prone highways in the country during rush-hour commutes. Altogether, there are 20,845 miles of roads in the state. Commuter trains run by MTA’s Metro-North Railroad New Haven line and Amtrak attempt to ease some of the congestion, and the state encourages ride sharing. Almost $2.2 billion have been spent since 1990 to repair and replace the state’s bridges. The Connecticut Department of Transportation owns the statewide bus company, with some 30 city authorities providing local transportation. Locally, New Haven has the highest percentage of people who commute to work by bicycle in major East Coast cities. The city of Windsor Locks boasts the Bradley International Airport, and three other airports provide regional flights. TRAVEL AND TOURISM Mystic Seaport Connecticut spends $2.5 million annually to promote tourism, which accounts for about $10 billion annually, or 6.6 percent of the gross state product. Special places of interest for tourists are Mark Twain House, a historical landmark where Samuel Clemens (Mark Twain) wrote The Adventures of Huckleberry Finn and Tom Sawyer; and Noah Webster House, where the compiler of the first American dictionary lived. There are many historic inns and colonial homes from the early 1600s in Connecticut. A recreated 18th-century village shows tourists what the Mystic Seaport used to look like and houses the world’s biggest collection of maritime photos. The highest point in the state is Bear Mountain, a popular hiking spot, and the oldest public library in America is the Scoville Memorial Library, which was started in Connecticut in 1771. -World Trade Press