PROVIDENCE –– Rhode Island stands alone as the only Northeastern state “in recession,” according to economists who reported yesterday that the state’s economy hasn’t been this bad in nearly two decades.

The Ocean State’s employment figures, its foreclosure rates, and personal income growth are worse than its neighbors and national averages. Rhode Island is one of just nine states in recession — the next closest is Ohio — while Massachusetts, New Hampshire and Connecticut have growing economies, according to Steve Cochrane, senior managing director for Economy.com, which is owned by Moody’s Investors Service.

“Clearly, in the Northeast, Rhode Island is a picture of weakness,” Cochrane said.

The somber news was delivered yesterday in a State House committee room where a dozen budget analysts will convene for the next two weeks to pore through tax receipts, economic trends and state expenditures. The bi-annual event — dubbed the Revenue & Caseload Estimating Conference — is more significant than the empty chairs in the audience would suggest.

Especially this year.

The result will determine exactly how much money state leaders can spend on programs that touch nearly every Rhode Islander — subsidized health care, education aid to cities and towns, bridge and highway projects. State leaders are already considering a swath of cuts to close a deficit projected for the coming year of at least $384 million — a number decided by the budget analysts at their fall conference.

But state leaders may have to cut much more, or raise taxes to help close the massive gap.

A growing chorus of state officials, including Governor Carcieri, has suggested recently that the deficit is growing. And the budget analysts will decide in the next two weeks how large it has grown.

The size of the deficit is tied directly to the state’s economy. The weaker it is, the less people buy taxable goods and create jobs. That means less sales tax and income tax revenue, which are state government’s leading sources of income.

“Without a doubt, it was a very poor year for the Rhode Island economy,” Michael Lynch, an economist with the international consulting firm Global Insight, told the panel of analysts, which included the fiscal advisers for the House and Senate, along with the governor’s chief budget officer.

Rhode Island was the only New England state to report negative employment growth between March 2007 and March 2008, Lynch said. The state’s unemployment rate grew to 6.1 percent as Rhode Island lost 7,200 jobs in the third quarter of 2007 alone. Unemployment could climb as high as 6.5 percent in the coming months, he said.

Personal income growth in Rhode Island increased by 4.8 percent, but fell short of the national average of 6.2 percent.

And Rhode Island’s foreclosure rate was among the worst in the nation, according to the Global Insight analysis. Approximately 2.4 percent of all home loans were in foreclosure in the fourth quarter of last year, which was the seventh-highest rate nationally.

State officials expected yesterday’s outlook to be bad, given the weak national economy. But they didn’t expect Rhode Island to be significantly worse than its neighbors.

“I am disappointed that it’s looking like we’re kind of an outlier in terms of how bad it is in Rhode Island,” state budget officer Rosemary Booth Gallogly said. “I expected that this would be a recession that hit all of New England. It looks like we’re in worse shape.”

Why did Rhode Island fare so poorly?

Cochrane said that Rhode Island is losing population at a rate he likened to the exodus in Silicon Valley after the dot-com bust. People eventually returned to Silicon Valley, he said. But there’s no evidence to suggest that Rhode Island soon will see an increase of potential taxpayers and consumers.

Rhode Island’s size is also working against it, according to Cochrane. Most larger states have several metropolitan areas; when one area struggles, another may be doing well. On average, therefore, the state may show growth.

Rhode Island, however, is essentially just one metropolitan area, he said.

Cochrane classified Rhode Island as being “in recession” because of sustained negative employment growth and weak industrial production. Other states in recession, according to Moody’s, include Ohio, Michigan, Wisconsin, Florida, Tennessee, California, Nevada and Arizona.

The economists had varying estimates for how long Rhode Island’s recession may last, but agreed that a slow recovery may begin at the end of this year into next year. But even those predictions were based on major assumptions, such as lower oil prices and improved confidence among consumers and the business community.

“The risks are great,” Cochrane said, of his assumptions not being realized.

Gallogly said the good news, if there was any yesterday, was that the economists suggested that a full recovery in state employment may require five years, compared to the 10-year recovery that followed the recession of the early 1990s.

“Not to say that makes us feel any better for the moment we’re in,” she said.

The conference will continue tomorrow morning as the analysts are scheduled to examine state spending on human-service programs.

speoples@projo.com