Maine sees economic growth in second year of pandemic fight but ‘a lot of money on the sidelines’

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AUGUSTA – Just weeks after the declaration of the global COVID-19 pandemic, an economic study predicted Maine would be the most vulnerable state in the country to the economic fallout from the health crisis.

But a year and a half later, that didn’t turn out to be the case.

“Fortunately, and due to the good work of a lot of people in the state, that’s not true,” said Heather Johnson, the State Department’s commissioner for Economic and Community Development, earlier this week.

Heather Johnson, Commissioner of the Maine Department of Economic and Community Development, provides an update on the state’s economic recovery at the Kennebec Valley Chamber of Commerce.

The Oxford Economics forecast cited Maine’s high percentage of elderly residents and its reliance on hospitality and tourism as well as retail, among other factors, as contributing to the bleak outlook.

But Johnson, who spoke about the state’s economic recovery on Wednesday at the Chamber Connection hosted by the Kennebec Valley Chamber of Commerce, said the state’s gross domestic product had increased, placing the state 33rd. national.

“No one who has a competitive bone in their body thinks the 33rd is where you want to be,” Johnson said via Zoom, “but it’s better than being in your 40s, that’s where we usually are. “

Johnson explained how more than $ 200 million in federal stimulus funding has been targeted to help businesses and industries damaged by the effects of the global pandemic, which includes the hospitality industry.

Johnson said that while the state’s economy still faces key challenges, the state’s gross domestic product – the total value of finished goods and services produced – has recovered to exceed levels of d ‘before the pandemic after diving in 2020.

Sales tax collection is also on the rise, she said, and people are feeling a little more comfortable spending their disposable income.

“We are actually seeing investments in new businesses and the growth of new start-ups,” she said.

This activity comes from people who have decided to start their own businesses instead of returning to work full time.

This is something Andrew Silsby, president and CEO of Kennebec Savings Bank, said he sees in the growth of account openings for new businesses and a broader trend of strong growth in deposits.

“At Kennebec Savings, a pretty good year of deposit growth would probably be $ 50 million, a really good year would be around $ 85 million,” Silsby said. “In 18 months, we increased our deposits by $ 350 million.”

Traditionally, he said, demand for loans has been greater than deposit activity. “When I say there is really a lot of money on the sidelines, there is really a lot of money on the sidelines – more than we’ve ever seen before,” he said. “But I really want some of those dollars to be reinvested in businesses.”

Silsby acknowledged that not all businesses are doing equally well and that some difficulties persist, but high deposits are pervasive for large and small businesses and personal accounts.

Among the concerns expressed during the presentation was the possibility of another shutdown, as the omicron variant of COVID-19 spreads across the United States.

Johnson urged people to stay on top of changing conditions and be concerned about what is happening.

“When you have to call the National Guard to support your health care system, that has never happened in my life,” she said, referring to Gov. Janet Mills’ recent action to help overwhelmed hospitals. .

But, she said, a stop is not likely. Protocols the state put in place at the start of the pandemic, including widespread shutdowns, were developed due to a public health crisis that people were unable to protect or control from. And the emergency powers granted to Mills that made it possible to declare those closures have expired.

“Now we have more options,” she said. “We have vaccines and we know a lot more about what’s going on. It gives people a chance to protect themselves and their families, and it changes the dynamics of personal responsibility and options for protecting themselves. “

One of the impacts of the pandemic on Maine is population growth, as people in other states with the ability to work remotely have chosen to do so from Maine. While these increases were not captured by the latest census, Johnson said other metrics illustrate this growth, such as the number of out-of-state driver’s licenses that are being converted to in-state driver’s licenses. , which, according to her, is double. number of thousands of people.

This has raised concerns about housing and whether those recruited to work here will be able to find a place to live.

“I think the short and long answer is yes,” Johnson said.

In the Maine Jobs and Recovery funding program, $ 50 million is for workforce housing, she said, which can be used in a number of ways.

She cited the example of the Northern Forest Center in Millinocket, which raised funds from philanthropic and other sources to renovate and update some dilapidated homes it had purchased. These homes are now low cost homes.

“It responds to the demand of the workers. I expect we will see more of it in the nonprofit world, and I expect us to try to figure out how to help with that, ”she said. “Where I spend my time is this workforce housing, which is if you need nurses, we need a place where they can live. If we need teachers, we need to have a place where teachers can live near their workplace. And we don’t have that in all of our markets right now.


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