Report: No recession for now, but workforce shortage plagues N.H.

The labor shortage in the Granite State is worse now than before the COVID-19 pandemic.

Patrons in front of a seafood restaurant in Alton Bay, N.H., on Aug. 6.JOHN TULLY/NYT

CONCORD, N.H. — Remember how economists were bracing for a possible recession on the heels of the COVID-19 pandemic?

We can all relax, according to a new analysis put out by the New Hampshire Fiscal Policy Institute. The issue brief found that both nationally and in New Hampshire, the economy has “remained resilient,” avoiding a downturn.

That’s not to say there are no problems moving forward. The labor shortage is worse now than it was before the pandemic, according to Phil Sletten, research director at the institute.

While New Hampshire’s economy rebounded after taking a nose dive during the pandemic, growth stagnated from 2021 to 2022, unlike neighboring states that continued to grow, the new analysis found.

A new report on the economy and workforce found New Hampshire's economy has recovered from the pandemic. It grew more quickly than other states in 2020, but stagnated from 2021 to 2022.New Hampshire Fiscal Policy Institute

The analysis found that workforce constraints like the availability of housing and child care limited growth. Plus, some older people decided to leave the workforce, further limiting the availability of workers.

“Fewer housing opportunities limit workers’ ability to move to New Hampshire,” the issue brief said. And about 16,800 adults didn’t work because of unmet child-care needs.

That’s a significant number — even more than the 13,100 people who were unemployed and seeking work as of July 2023. That suggests that addressing child-care needs could make a difference when it comes to the workforce shortage.

Sletten said child care is a problem the state can likely resolve more quickly than the housing shortage.

“The housing constraint we have in the state is about a decade and a half in the making. It’s a long-term concern, and a capital-intensive problem,” he said. “Child care is one that could be turned around a bit more quickly because those investments are in services largely.”

With fewer Granite Staters available for work as the economy has grown, there’s now a bigger gap between open jobs and residents to fill them.

There are now more than three unfilled positions for each unemployed worker, nearing historically high levels of 3.7 open jobs per worker in 2022.

About 740 fewer people in New Hampshire reported they were employed between the second quarters of 2022 and 2023. In contrast, Massachusetts, Maine, and Vermont all saw increases in residents reporting they were employed.

In the past, Sletten said New Hampshire has grown its workforce when people moved to the state, which happened in the 1960s through the 1990s.

Moving forward, he said, states with more housing are likely to see more growth in their labor force.