The Rhode Island economy is forecasted to show less than a one percent growth in jobs in 2007 or the creation of about 350 net new jobs each month. Many of these jobs will be created by small and mid-sized companies as large companies continue to consolidate their workforces.

Job growth in Rhode Island faces five challenges as well as the economic factors affecting job growth in any state. The challenges include the need for better workforce development to provide workers with skills to replace those who retire or leave the state, more affordable housing, a tax structure that is competitive, a declining and aging population and balancing a deficit-driven state budget.

The passage of a bond issue by Rhode Island voters in 2006 will lead to the construction of more affordable housing for working families. Bonds were approved for $50 million. It is expected that additional funding of $400 million will come from federal, state and private sources to create even more affordable housing in the years ahead.

The size of the workforce is estimated to grow by 0.2 percent from 2006-11. In 2007, the workforce will grow by 2000. With a slow growing and aging workforce, it is difficult to attract and retain businesses and create new jobs. To replace skilled workers who are retiring, the state will need to attract workers from other states and immigrants with special skills.

Rhode Island is currently stalled in neutral in creating new jobs and higher paying jobs. This is not due to a lack of trying. With the high concentration of colleges and universities, the state is in a good position to add these graduates to the workforce if there were jobs available. The state’s population is estimated to grow between 2 to 3 percent a year starting in 2008 after losing population in 2007.

Rhode Island’s unemployment rate is about 4.2 percent which is lower than the national rate and the lowest unemployment rate in Rhode Island since October 2000. Due to anticipated further declines in construction and manufacturing employment in 2007, it is estimated that the unemployment rate may rise to 5.3 percent by the end of the year.

The employment sectors in Rhode Island showing growth in 2007 are financial activities, professional and business services, education and health services, leisure and hospitality, other services and high tech.

The state has a dynamic financial services sector which is creating higher-paying jobs for college graduates. The leisure and hospitality industry attracts millions of visitors each year and provides excellent restaurant and entertainment facilities for Rhode Islanders. The quality of life makes the state a great place to live because of its central location, easy access to New York and Boston and strong educational and health institutions.