Rhode Island Economic Overview
Although Rhode Island is the smallest state in the country, it draws a lucrative tourist trade with its 400 miles of coastline, sandy beaches, and many historic attractions. The leading industry in the state is health care and social assistance, which employs 76,500 workers, followed by government, the retail trade, and manufacturing. The tiny state also boasts some 100 defense companies, whose 16,000 workers generate nearly $2 billion in revenue. Rhode Island’s 1 million residents contribute to a gross state product of $47 billion.
It was not until the 1600s that a permanent settlement was formed in Rhode Island. Agriculture and commerce slowly grew throughout the 1800s. At one time, Rhode Island merchants controlled more than half of the American trade in African slaves. Dairy, fishing, lumber, and shipbuilding industries also developed during the 18th and 19th centuries.
By the late 19th century, immigration, industrialization, and urbanization had changed the face of the state. Rhode Island was a leader in the textile industry until the Great Depression of the 1930s, when most of its textile factories relocated to the South.
From the 1950s to the 1980s, 30 percent of the state workforce earned its living through manufacturing. A recession in the 1990s resulted in job losses, and the economy transformed from being mostly reliant on manufacturing to become heavily based on the service sector, particularly government and health services.
Although Rhode Island’s manufacturing industry has declined, the state capital of Providence has maintained its reputation as one of the nation’s largest centers of jewelry and silverware design and manufacturing.
There are 1,220 farms in the state, which produce a total of $86.7 million in agricultural output. Ten percent of the state is farmland. The five leading agricultural commodities are greenhouse/nursery products, at $42 million; dairy products, at $3.9 million; sweet corn, at $2.5 million; aquaculture, at $1.6 million; and apples, at $1.4 million. Livestock, poultry, and eggs account for $10 million, and organic sales account for $1.1 million.
BANKING AND FINANCE
Financial activities in the state provide jobs for 32,600 people at an annual payroll of more than $2.2 billion. There are more than 1,400 financial service and banking institutions in Rhode Island with some $173 billion in assets, while credit unions have assets worth $4.2 billion. The Bank of America Corporation, the fourth largest employer in the state, has an estimated 4,500 workers, and Fidelity Investments, the 10th largest employer, provides jobs for 2,200 people. The 25 credit unions in Rhode Island serve nearly a third of the state’s population.
Twenty-two newspapers are published in Rhode Island, and the state has seven television stations and 49 radio stations. Although 14 telephone companies are based in Rhode Island, many more do business there from out of state. According to the U.S. Census, there are 118 companies in the state in the telecommunications sector with 2,822 employees and an annual payroll of $11.5 million.
The construction industry, including residential and non-residential construction, employs some 17,600 workers in Rhode Island, which is a decrease of 6,100 jobs from 2007, when employment construction peaked before the worldwide economic crisis. Nonresidential construction spending is approximately $1.8 billion annually. The average annual wage for construction workers in the state is $48,700, and there are roughly 4,000 construction firms in Rhode Island, of which most (95 percent) have fewer than 20 workers.
Some 153,400 students are enrolled in 338 elementary and secondary schools in Rhode Island, and the educational services sector employs 23,100 workers. The state reports that 85 percent of high school students graduate. There are approximately 72,000 undergraduate students and 9,000 graduate students attending a total of 14 colleges and universities in Rhode Island. Brown University is the fifth-largest employer in the state, with 4,500 workers; the university has nearly 8,300 enrolled students and an endowment of over $2 billion. The University of Rhode Island has more than 19,000 students and an endowment of approximately $73 million.
Rhode Island’s electric power is 99 percent generated from natural gas, with petroleum generating the remainder. The residential sector consumes the most energy (33 percent), followed by transportation (27 percent), and industry (12 percent). In general, Rhode Island is among the lowest energy consuming states in the country. It ranks last in per-capita energy consumption, and energy prices in the state are among the highest in the nation. Offshore wind-power generating facilities are in the planning stages.
Similar to many other states, Rhode Island has a film office that offers incentives to production companies, such as a 25 percent motion picture transferable tax credit. There are roughly 40 movie and music recording establishments in the state with a total of 435 employees and an annual payroll of $5.8 million. Rhode Island is home to nine film festivals, and the Rhode Island International Horror Film Festival is the largest horror film festival in New England.
Property-casualty insurers in Rhode Island employ more than 2,800 workers earning a combined annual payroll of some $210 million. About $53 million worth of state premium taxes are paid yearly. In 2008, Rhode Island insurers paid claims of almost $400 million by car owners, $95 million by homeowners, and $443 million by businesses. There are 34 domestic insurance companies in the state out of 1,265 insurers, with a total of more than 9,000 employees.
Roughly 41,400 people work in 2,000 manufacturing firms in the state at a total payroll of $1.2 billion, producing everything from jewelry and fabricated metal products to textiles. Fabricated metal manufacturing provides the most jobs, followed by jewelry and industrial equipment manufacturing. The Hasbro game company, one of the largest toy companies in the world, has its corporate headquarters in Pawtucket, although most of its toys are produced in China.
MINING AND EXTRACTION
Rhode Island’s mining industry consists of 36 operations with a combined total of 260 employees. Miners in the state earn an average of $46,000 and combined payroll earnings are $10 million. Mining operations generated a total of $50 million worth of minerals, metals, and fuel products. Stone mining and quarrying account for $30 million, while sand, gravel, and clay extraction account for $20 million.
Upwards of 9,000 nonprofit organizations operate in Rhode Island, with a little more than half of them public charities, more than 1,000 private foundations, over 900 educational organizations, and the rest various organizations such as social welfare nonprofits, recreational clubs, or organizations of war veterans. Total assets reported by the organizations is roughly $27 billion, and total yearly income exceeds $21 billion. The average asset amount reported is $5.2 million, and the average annual income is $4.1 million.
Rhode Island is home to varied retail establishments employing a total of 45,000 workers. Two of the top 10 employers in the state are the CVS drugstore chain and the Stop & Shop Supermarket chain. As in most states, Walmart is a significant presence in Rhode Island, with two supercenters and seven discount stores. Walmart employs almost 2,500 Rhode Island workers at an average full-time hourly rate of $11.87. More than $21 million is collected in state sales tax at Walmart stores, and the company pays more than $5 million in state corporate tax annually.
Rhode Island’s information technology and digital media sector employs almost 16,000 people at a combined annual payroll of more than $1 billion. The Slater Technology Fund offers seed funding for local technology-based firms, and an innovation investment tax credit of up to 50 percent is also offered by the state. More than 130 software publishers do business in Rhode Island. Total annual payroll is $78 million, and the average yearly wage is $95,000.
The bioscience sector ranks in the top six in the country, and Rhode Island’s more than 1,000 bioscience patents are mostly for drugs, pharmaceuticals, and surgical and medical instruments. Total academic bioscience research expenses were $107 million in 2006. More than 35,000 bioscience establishments employ over 400,000 workers.
Rhode Island has more than 6,000 miles (9,660 km) of roads and 70 miles (113 km) of interstate highways. There are seven public airports in the state, with T.F. Green Airport (TFG) being the busiest. Although it currently serves five million passengers a year, that number is expected to rise to 11 million by 2020. In preparation, the airport has invested $260 million in an expansion program. Around 2,000 people work at TFG, earning a total of around $83 million annually and generating some $190 million in revenue.
Local bus service in the state is provided by the Rhode Island Public Transit Authority (RIPTA), which serves 38 of the state’s 39 communities. RIPTA employs about 850 people and operates 3,300 daily trips on 56 statewide fixed bus routes. It also ferries almost 43,000 people annually via the Providence/Newport Ferry.
TRAVEL AND TOURISM
Some 55,000 people have jobs in the tourism and hospitality sector in Rhode Island. The 16 million tourists who come to enjoy more than 100 beaches the many cultural and historic attractions in the state spend around $6.8 billion annually. The Tennis Hall of Fame, the oldest operating tavern in the country (White Horse Tavern), the oldest schoolhouse in the country (in Portsmouth), and the oldest synagogue in the country (Touro Synagogue) are some of Rhode Island's tourist draws.
Rhode Island’s defense industry consists of more than 100 companies with a total of more than 16,000 employees, including 22 percent of the state’s scientists and engineers. Some $879 million in payroll is paid by this sector annually, which also generates around 20 percent of the patents in the state.
Yearly revenues from this sector are roughly $1.75 billion. A highly connected network of companies serves the needs of the U.S. Defense and Homeland Security departments, with firms such as Electric Boat and Raytheon Integrated Defense Systems. Contracts with the Department of Defense totaled $407 million in 2007, and contracts with Homeland Security accounted for $4 million. The defense industry pays a minimum of $43 million yearly to the state through income and sales tax.
In addition, the state has a marine industry that employs more than 12,000 workers in 800 companies that specialize in boatbuilding and shipbuilding, fisheries, environmental research and development, and marine electronics.
-World Trade Press