PLYMOUTH — In the years ahead the economy of Belknap County will be marked by an aging population, shrinking workforce, dwindling investment and slackening growth according to a study by Daniel Lee, an economist at Plymouth State University.
Dr. Lee could not be reached on Tuesday to comment on his report.
In New Hampshire, where the population is aging more rapidly than in the nation, Lee notes that the population of Belknap County is aging even faster. The median age in the county in 2010 was 44.7, compared to 37.2 in the nation and 41.1 in the state. Only Carroll County and Coos County, where the median ages were 48.3 and 46.4, had older populations. Between 2000 and 2010, those aged five and younger grew just one-percent and those aged between five and 17 shrank nine-percent while those aged 45 to 64 jumped 31 percent and those 65 and older climbed 19 percent.
Without net migration into the county, Lee projects that with this pace of aging the population of working age in Belknap County — those between 20 and 64 — will have decreased 5.8 percent by 2020 and 16.3-percent by 2030. The decline would be surpassed only by Carroll County and Coos County, where he projects the working age populations to shrink by 24.4 percent and 20 percent respectively by 2030. Moreover, Lee notes that the labor participation rate — the number of residents in the workforce — in Belknap County has dropped from 72 percent in 1998 to 64 percent in 2012, compared to a decline from 72 percent to 68 percent in the state.
Lee anticipates that the county's smaller workforce will also have a relatively low level of educational attainment. Although the 32 percent of the state's population has at least a college degree, fewer than one in four residents of Belknap County have more than high school diplomas and the gap between the state and county is widening.
Along with the size and skill of the workforce, Lee counts capital investment as the third major source of long-term economic growth. He calculates that the growth of private investment has slowed in New Hampshire during the past four decades and that investment in Belknap County has lagged the pace in the state. Between 2000 and 2010 the capital stock of the state grew 30 percent, with Grafton County and Merrimack County setting the pace at 55 percent and 39 percent respectively, while it grew 26 percent in Belknap County.
From 2000 to 2010 Lee found that productivity growth fell sharply, by more than two-thirds in the state and by more than half in the county. Although productivity growth in Belknap County of 7.3 percent barely topped the state average of 7.1 percent, it was the fourth lowest rate in the state, far behind Grafton County, which led the field at 25 percent but well ahead of Rockingham County, the tailender at 1.4 percent.
These trends were reflected in slower growth of both employment and income. Belknap County was among the five counties where employment shrank between 2000-2010, though the decline of 4 percent was less than half the 9 percent drops in Coos County and Sullivan County. Meanwhile, personal income rose 16 percent during the same period, faster than the 13 percent in the state as a whole, but far off the pace of increases of 51 percent in the previous two decades.
Lee tracked shifts in the source of income growth by measuring the contribution of different industries to increases in earnings. Between 1970 and 2000 the service and manufacturing sectors drove the economy in the county, generating about a quarter and a fifth of growth in earnings respectively. Retail trade, construction and government services accounted for approximately 1 percent apiece and finance, insurance and real estate (FIRE) and wholesale trade each less than 10 percent.
However, between 2001 and 2001 Lee calculates that government services, health care and social assistance together represented 57 percent of growth in earnings while professional and technical services accounted for another 11 percent. Retail and wholesale trade, along with the dining and hospitality sector, each contributed less than 10 percent. According to Lee, the contribution of the manufacturing sector dropped 31 percent to become "the largest drag during the past decade."
Lee concludes that the Belknap County has been buffeted by the same demographic forces weighing on the state. However, he notes that the county's economy has declined relative to other parts of the state "gradually but steadily over the past four decades," a trend he anticipates will continue.