Maine Economic Overview
Maine’s abundance of natural resources—including livestock, farmland, forests, and fish—plays an important role in the state’s economy. Almost 57,000 people are employed in agriculture, forest-related products, and fishing, meaning 23 percent of the 1.3 million Mainers are employed in these sectors. Roughly 90 percent of Maine is covered by forest, and the manufacturing of wood products has been providing livelihoods from tree chopping and shipbuilding to paper manufacturing since colonists came from Europe in the 17th century.
More lobsters are caught in the waters off Maine’s Atlantic coast than anywhere else in the country. The state is also one of the nation’s largest potato growers. Maine has an annual gross state product (GSP) of $42 billion. Although natural resources continue to play an important role in the state’s economy, service-related employment, including hotels, restaurants, and health care, represents a growing economic sector.
The English established the first permanent non-native settlements in Maine in the 1620s. Because the climate was so rugged, very few settlers survived in the beginning. However, due to its abundance of natural resources (forests in particular), Maine continued to attract trappers and fishermen.
Saw mills were established as the first Maine factories, which manufactured beams and joints that were shipped to New York, Savannah, and other major U.S. ports. In the 18th and 19th centuries, shipbuilding became an increasingly important industry and eventually superseded the value of the state’s sawmills.
As the United States became an increasingly industrialized society after the Civil War, emphasis on agricultural production fell and Maine’s value in the overall national economy deteriorated. By the 1860s, Maine’s population growth slowed. The 1880s saw the founding of the Bath Iron Works Shipyard, which is now one of the state’s largest private employers. The pulp and paper industries made up for Maine’s textile industry moving to the South where labor was cheaper. Today, Maine boasts a $13 billion tourist industry, as its lush forests, rivers, streams, and expansive coastline are a major draw for people looking for a quiet getaway.
Agriculture is a growing industry in Maine. In early 2009, the U.S. Department of Agriculture released its five-year census figures and noted that the number of farms in Maine had increased 13 percent to 8,136 during that period. Additionally, the value of their sales increased 33 percent to a total of $617 million.
Approximately 59,000 acres of farmland are dedicated to the potato crop, which produces $540 million in annual sales. It is second only to the state of Idaho in terms of annual production and employs 6,100 people. The state also produces 25 percent of all blueberries in North America, making it the largest blueberry producer in the world, with annual sales of $75 million. Greenhouse produce and apples contribute another $223 million in sales each year.
More than 2,500 farms raise livestock and generate annual sales of $241 million. Their products are responsible for 52 percent of all state agricultural sales. Milk cows and other dairy products are responsible for 19 percent of those sales, poultry and eggs account for another 17 percent, and cattle and calves for another 3.4 percent.
Maine enjoys a long Atlantic coastline and is home to plentiful rivers and streams, making it a natural for the aquaculture industry. The sector produces $50 million in sales and $10 million in annual state taxes. Wages and other benefits for employees exceed $33 million annually. (For more information, see the Special Industries section below).
BANKING AND FINANCIAL SERVICES
Some 10,000 people work in Maine’s banking industry. The state’s credit unions play a larger role in providing financial services for their customers than in the rest of the country, as 17 percent of deposits in Maine are to credit unions, compared to just nine percent in the U.S. as a whole. Only 46 percent of deposits in Maine are to commercial banks, contrasted with around 75 percent in the rest of the country; 37 percent of deposits are to savings banks, compared to 16 percent in the U.S. as a whole. In 2008, Maine’s 68 credit unions employed 2,000 people with an estimated aggregate income of $80 million and listed 600,000 members with over $3.9 billion in deposits and $3.3 billion in loans.
Maine has more than 110,000 miles of fiber-optic cable in place and is becoming a popular location for call centers. Communication and retail giants such as L.L. Bean, T-Mobile Communications, Microdyne, Livebridge, and Taction have call centers in the state, and more companies are expected to follow suit. Nine phone companies operate in Maine, with basic residential rates varying from $16.63 per month to $50 per month, and business rates ranging from $25 to $37. Thirty newspapers are published in the state, and there are 15 radio stations. Some two dozen television stations broadcast here as well.
Nearly 30,000 Maine residents work in the construction industry. There are 6,378 firms in this field, which pay employees an average annual wage of $37,000. Although housing construction suffered during the recent economic crisis, it still contributes some $1.4 billion in income to Maine residents. Over the past 10 years, the construction industry and Maine institutes of higher education have been working together to create training programs at the high school and college levels to start graduates a step ahead in the construction field.
Maine has more than 213,000 pupils attending its 711 public and 139 private elementary schools, and another 125,000 high school pupils. The state spends an average of $9,053 per student annually, giving it a national ranking of ninth. There are 37 universities and colleges in Maine, with the University of Maine system having an enrollment of 34,700 students. The largest university in the state is the University of Maine at Orono, with more than 12,000 students and an endowment of $230.5 million. The state offers some financial aid programs, one that gives a maximum award of $25,000 per student annually, to help students pay for post–high school education. More than 2,100 people are employed in the education sector at a combined annual payroll of $44 million.
Some 33 percent of the electricity in Maine is generated by natural gas, while hydroelectric energy generates 22 percent, renewable sources generate 31 percent, petroleum accounts for 12 percent, and coal provides 2 percent. Maine ranks third and fourth in the U.S. for the percentage of energy obtained from biomass and non-hydro renewable (wind and solar) power, respectively. Mainers consume an average 12,363 million kWh of electricity annually. About 80 percent of residential buildings use fuel oil for heating, the highest percentage in the country. Twenty-two percent of Maine's electric power comes from hydroelectric plants. Central Maine Power serves more than 600,000 customers via more than 23,000 miles of electric lines and has annual revenues of approximately $500 million.
The entertainment industry in Maine employs about 67,000 people, who earn an average of $48,557 annually, 33 percent higher than the state average. Maine’s arts and cultural sectors generate about $1.5 billion in annual sales. Similar to other states, Maine offers incentives to movie production companies to film in the state, such as income tax rebates for investors, waiving of state sales taxes on production items, fuel, and electricity, and reimbursement of lodging taxes. In addition, many state parks and other locations are available for filming without charge. A typical feature film produced in Maine can bring in some $38 million worth of economic development.
Maine has one of the smallest insurance industries in the country by number of companies, employees, taxes, revenues generated, and premiums collected. The industry has around 10,800 employees, including insurance carriers, brokers, and their staff. It generates $92 million in revenue and $77 million in taxes based on paid premiums of $6.1 billion. Most of the insurance policies are for automobile coverage, followed by homeowners’ policies and health/life policies.
Maine is home to more than 2,500 manufacturing companies, which employ more than 76,000 workers. The city of Portland has more than 5,000 employees in manufacturing, more than any other city in the state. Most of the manufacturing jobs are in the lumber/paper industry, which ships more than $5.6 billion worth of products each year (more than 40 percent of all manufacturing in the state). These employees have an annual salary of $47,000. About 9,000 employees work in one of 33 transportation manufacturing firms in the state.
MINING AND EXTRACTION
Non-metal mining contributes around $160 million annually to the state’s gross domestic product. The leading products that are mined are sand, gravel, and limestone. Other mined products are clays, gemstones, and granite. Maine has large copper and zinc deposits, which have not yet been fully developed. Some 1,120 people are employed by the mining industry in Maine, earning an average annual wage of $34,000 and a combined annual payroll of $40 million.
More than 70,000 people are employed by 5,640 nonprofit organizations in the state of Maine. Some 70 percent of these organizations are quite small and have annual budgets of less than $500,000. Spending by nonprofits represents almost 15 percent of Maine’s GSP and is 8 percent above the national average. Additionally, 3,000 local religious organizations, PTAs, and booster clubs too small to have a file with the IRS also provide services to individual communities. The major source of revenue for nonprofits in the state is fees for different services and programs. These nonprofits have assets exceeding $9 billion. The largest asset holders are nonprofit hospitals that own valuable land, buildings, and equipment. Social services represent the largest sector of nonprofit organizations in the state, while health care services are the second largest.
The Maine retail industry employs more than 80,000 people, whose annual average income is approximately $19,500. The 7,000 retail establishments in the state enjoy sales of more than $16 billion annually and represent the largest segment of the state’s total GSP. Motor vehicle and parts distribution sales represent the largest segment of Maine’s retail industry, with more than $3 billion in annual sales, followed by furniture and home furnishing establishments, with annual sales exceeding $330 million. Fortune 500 company Hannaford Brothers is the largest food retailer, with annual sales of $2.8 billion (includes sales figures from other New England stores). Clothing retailer L.L. Bean, headquartered in Freeport, has built an internationally known name and its 5,400 employees have reached sales figures in excess of $1.4 billion.
In 2007, Maine voters approved the funding of $50 million in bonds to create the Maine Technology Asset Fund to help fund new research projects. In the past six years, Maine has filed around 700 bioscience patents. Bioscience research expenditures are approximately $46 million annually. In recent years, six biomedical research institutions have joined together to create a new Graduate School of Biomedical Science. The school is a collaboration of the University of Maine, The Jackson Laboratory, Maine Medical Center Research Institute, Mount Desert Island Biological Laboratory, the University of Southern Maine, and the Maine Institute for Human Genetics and Health. The Forest Bioproducts Research Initiative has been awarded a $6.9 million grant from the National Science Foundation and a $3.45 million grant from the Maine Economic Improvement Fund. Thirty-five software companies employ 315 people, who earn an average annual wage of $39,800 and generate revenue of about $30 million.
More than 24 million tons of cargo passes through the Port of Portland each year, making it the most active port in New England. Another four tons of cargo is transported on Maine’s three railroad companies along 1,165 miles of rail lines. The state’s trucking industry employs more than 38,000 workers and is responsible for transporting 94 percent of the state’s total manufactured tonnage and annual revenues exceeding $1 billion. Bangor International Airport, one of only two international airports in the state, has revenues in excess of $417 million.
TRAVEL AND TOURISM
Maine enjoys 3,500 miles of coastline and thousands of acres of pine forests. It is a popular destination for more than 22 million people each year. Maine’s tourism industry generates $13 billion annually and employs 176,000 people, making this industry the largest employer in the state. The annual wage in the tourism industry is about $36,000. However, this figure is skewed because many people in the industry are seasonal workers who earn an hourly wage of approximately $9.50. The only national park in Maine, Acadia National Park draws two million visitors each year. The entrance fees alone are worth $40 million annually.
Maine’s aquaculture industry has an estimated $35 million annual harvest, with a capital investment infrastructure of more than $100 million. Its commercial products are salmon, cod, mussels, and oysters, which are raised at 137 leased farm sites and nine private hatcheries. Most of the shellfish farms are family-owned operations. In addition, the state is home to one company that grows seaweed. The Maine Aquaculture Innovation Center offers grants ranging from $5,000 to $25,000 for applied research to improve Maine’s economy through aquaculture.
-World Trade Press