Economic Outlook of New Hampshire in 2024: A Comprehensive Analysis

Introduction: New Hampshire’s Economic Landscape

New Hampshire, celebrated as the “first-in-the-nation” primary state, has persistently enjoyed a relatively prosperous economy compared to numerous other regions of the United States. However, like most states, it has not been immune to economic challenges and uncertainties. This extensive analysis delves into the current state of New Hampshire’s economy, highlighting key strengths, vulnerabilities, and the sentiments of its residents.

Robust Job Market and Industry Diversity

New Hampshire boasts a diverse mix of industries, reflecting the overall U.S. economy, with notable strengths in healthcare, education, and manufacturing. Despite experiencing one of the highest interstate commuting rates in the nation due to its proximity to Boston and other metro areas, the state maintains a remarkably low unemployment rate of 2.3% in November 2023. This robust job market reflects a strong labor environment, providing ample employment opportunities for residents.

However, this seemingly positive statistic presents a dual challenge. While it signals a vibrant economy, it also poses difficulties for businesses seeking to hire and expand their workforce. The tight labor market has been a recurring theme across the nation post-pandemic, as businesses struggle to find qualified workers to fill available positions.

Labor Shortages and Population Dynamics

The tight labor market in New Hampshire is further exacerbated by demographic trends. The state’s population is aging, and as more individuals retire from the workforce, it creates a gap that challenges overall economic growth. This demographic shift is expected to present long-term challenges for the state’s economy.

Furthermore, the state’s limited population growth compounds the labor shortage issue. New Hampshire’s relatively small population size and slower growth rate compared to other regions make it more susceptible to labor market fluctuations. Attracting and retaining a skilled workforce becomes increasingly difficult in such circumstances.

Housing Affordability Crisis

New Hampshire’s economic attractiveness is diminished by its ongoing housing affordability crisis. Rising home prices, coupled with higher mortgage rates, have made homeownership unattainable for many residents. This issue is particularly acute in the quaint town of Chester, where Patrick Connelly, owner of Field to Fork Farm, has witnessed the surge in housing prices firsthand.

The lack of affordable housing options not only hinders the state’s ability to attract and retain workers but also exacerbates the financial burden on existing residents. The high cost of housing, coupled with the third-highest property taxes in the nation, further strains household budgets and diminishes the state’s overall appeal.

Tourism Industry Rebounds Post-Pandemic

New Hampshire’s tourism industry has demonstrated resilience in recovering from the COVID-19 pandemic. With the lifting of travel restrictions, people flocked to the state, eager to explore its natural beauty and attractions. The state’s tourism division effectively marketed New Hampshire as a desirable destination, resulting in a surge in visitors and revenue.

However, the tourism industry continues to face challenges in staffing, with approximately 800 to 1,000 jobs still unfilled compared to pre-pandemic levels. The labor shortage hampers the industry’s ability to fully capitalize on the renewed demand for travel and hospitality services.

Income, Poverty, and Cost of Living

New Hampshire’s residents generally enjoy higher median household incomes compared to the national average. The state also boasts the lowest official poverty rate in the nation. However, it is crucial to consider the state’s relatively high cost of living. Adjusting for living expenses, the overall economic well-being and financial security of New Hampshire households may not be as rosy as the top-line income figures suggest.

Residents’ Sentiments and Outlook

New Hampshire residents’ sentiments regarding the economy vary widely, with partisan divides influencing their perceptions. President Joe Biden’s approval ratings on economic handling are slightly higher in New Hampshire compared to national surveys. However, residents’ personal financial situations paint a mixed picture, with a significant portion feeling worse off than a year ago.

Despite the economic challenges, residents’ outlook appears to be improving, with a decline in the share of those feeling financially worse off compared to 2022. This cautious optimism suggests that residents may be anticipating a gradual improvement in their economic circumstances.

Conclusion: Navigating Economic Uncertainties

New Hampshire’s economy presents a complex tapestry of strengths and challenges. While the state enjoys a robust job market and a recovering tourism industry, it grapples with labor shortages, an aging population, and a housing affordability crisis. The state’s residents navigate these economic uncertainties with varying degrees of optimism and pessimism, reflecting the complexities of an evolving economic landscape.