Maine’s gross domestic product grew a solid 4.2 percent during the second quarter, a reversal of the steep decline during the first three months of the year.

Figures released Thursday morning by the federal Bureau of Economic Analysis indicate the growth in Maine’s GDP – the output of goods and services in the state – was slightly ahead of the national average of 3.8 percent for the April-June period and in line with the New England average.

Thursday’s report was the first time the BEA released quarterly GDP numbers for states. It reports quarterly figures nationally and had previously reported annual GDP figures for the states.

The report indicated that real estate, rentals and leasing performed particularly well during the second quarter in Maine, contributing 0.91 percentage points of the overall increase of 4.2 percent. Finance and insurance returns were also strong, making up 0.82 percentage points of the increase.

Economist Charles Lawton of Planning Decisions said the strong real estate results reflect the state’s growing popularity as a destination for those looking for a second home. And the finance and insurance sector growth could feed off of that, as baby boomers retire and may retire to Maine and take their banking accounts and insurance coverage with them.

Michael Dolega, an economist with TD Bank, said the financial services industry has had a robust year. He doesn’t think Maine businesses or consumers will suffer greatly if the Federal Reserve raises interest rates this month, as it is widely expected to do.

He said the bigger concern is that the Fed will hike rates too rapidly over the next year or so, but Deloga said that’s not expected because of economic problems in Europe and Asia.


Industry sectors that lagged in the second quarter report included non-durable goods manufacturing, which involves the production of goods intended to last three years or less, which pulled down the overall increase by 0.06 percentage points; educational services, which decreased the overall growth by 0.05 percentage points; and entertainment and recreation, which held back the overall GDP by 0.04 percentage points.

The report also included first quarter GDP results, and Maine’s economy contracted by 10.3 percent, probably due to the severe cold and heavy snows of last winter. Overall national economic growth in the quarter was held to 0.7 percent – compared to 3.8 percent growth in the second quarter – and every New England state except Connecticut had a decrease in economic output during January, February and March.

Maine’s decline during the first quarter was the fourth worst nationally, following Kansas, North Dakota and South Dakota.

Lawton said the weather almost certainly played a role in the economy in both the first and second quarters.

Mainers beset by a harsh winter probably held off spending through March, he said, but then the better weather in the spring, the return of tourists and low gas prices made people open up their wallets and boosted the economy in April, May and June.

That could be a good sign for the current quarter, Lawton said, since low gas and oil prices along with mild early winter weather could prove positive for the final three months of the year.

Dolega said the state has seen strong employment growth so far this year. Looking forward, he said low oil and gas prices will help consumers and should give Mainers more spending money to get through any stall in the first quarter of 2016.


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