PROVIDENCE — Rhode Island’s economy grew in the first three months of 2021, but at a slower pace than New England as a whole, a widening of the state’s so-called “growth gap,” an economic model released Tuesday says.
According to the report by experts at Bryant University’s Center for Global and Regional Economic Studies and the nonprofit Rhode Island Public Expenditure Council, the state’s gross domestic product grew by an estimated 3.5 percent annualized rate in the first quarter, compared to an estimated 5.2 percent growth in all of New England and 6.4 percent in the U.S.
According to Edinaldo Tebaldi, an economics professor at Bryant and one of the experts behind the report, the economic situation in Rhode Island could be an echo of the recovery from the Great Recession, when the state was one of the first into a severe recession and one of the last to come out of it.
“The 2008 and 2009 story may repeat again,” Tebaldi said.
The report, called the Rhode Island Economic Indicator Briefing, comes out once every three months. It uses data like tax receipts and employment figures to estimate the state’s gross domestic product, a measure of goods and services produced in the state’s economy.
In the last quarter of 2020, Rhode Island’s GDP grew by 2.6 percent. In the third quarter, it grew by 35.5 percent. In the second, the pandemic-battered GDP shrank by 32.4 percent.
The report shows that the state is still clawing its way out of the hole that the pandemic created, even as it faces the same problems it did before COVID-19 came to Rhode Island: relatively sluggish growth compared to the region as a whole.
The problem in Rhode Island, Tebaldi said, is a productivity problem. That is caused by historic failures to invest in infrastructure and a skills gap that means Rhode Island workers don’t have the skills that modern employers are looking for.
In the first quarter of 2021, the total number of jobs in Rhode Island grew by 0.8 percent.
Leisure and hospitality jobs grew by 2.4 percent in the quarter. But they too were still well below pre-pandemic totals: The sector employed 46,700 in March 2021, compared to 60,800 in February 2020, the report said.
Jobs grew in every sector except information services and professional and business services, the report said.
But even as it rose from the last quarter of 2020, total non-farm employment was still off pre-pandemic levels.
The report “just tells us we should be honest with ourselves,” Michael DiBiase, president and CEO of the Public Expenditure Council, said in an interview. “Even though things are getting better they’re not getting better as fast as other places.”