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January 19, 2023

Maine state economist says any recession would be mild

Amanda Rector at podium Photo / Renee Cordes Amanda Rector, Maine's state economist, was the keynote speaker at the Mainebiz "5 on the Future" event Thursday in Portland.
By Renee Cordes

Amanda Rector, Maine's state economist, offered a mostly upbeat outlook on Maine's economy in 2023, predicting that any recession or slowdown would be limited.

"I don't know if there will be a recession," she told a Mainebiz forum in Portland on Thursday. "The question is, do we have enough uncertainty out there in the economy that is going to make consumers and businesses uncomfortable enough that they pull back" from spending and investments?

"So far," she said, "it seems like we're still holding up OK." 

She also said if there is a recession or slowdown, she thinks it's going to be much milder than the Great Recession of 2008-09 and the pandemic recession of 2020. 

Rector, the keynote speaker at the Mainebiz "5 on the Future" forum, also moderated a panel discussion featuring Peter DelGreco, president and CEO of Maine & Co.; Kristen Miale, president of the Good Shepherd Food Bank of Maine; Craig Young, president of Maine Real Estate & Development Association (MEREDA) and a senior broker at the Boulos Co.; and Jeff Zachau, CEO of Zachau Construction. 

Around 220 people attended the event, held at Holiday Inn By the Bay.

In her opening presentation, Rector noted that even with energy prices starting to come down, consumer sentiment has not rebounded at a comparable rate, cautioning that uncertainty can become a "self-fulfilling prophecy."

Rector also touched on inflation and interest rates.

The Federal Reserve has a current target range of 4.25% to 4.5% for the federal funds rate, and projects that rate will top out at a range of 4.9% to 5.6% in 2023, according to forecasts released by the Fed in December.

Rector said rising interest rates, will, in turn, immediately push up mortgage rates, which come on top of expensive housing prices.

"Hopefully the interest rate hikes will bring down inflation but without sending us into a recession," she said.

Rector said while she can't say whether there will be a recession for sure, "I do think that we have a lot of potential for a slowdown this year."

panel seated on stage
Photo / Renee Cordes
Following her keynote presentation, Maine State Economist Amanda Rector (left) led a panel discussion featuring Peter DelGreco of Maine & Co.; Kristen Miale of Good Shepherd Food Bank; Craig Young, of MEREDA and the Boulos Co.; and Jeff Zachau, of Zachau Construction.

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