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January 9, 2008

On economy, Colgan says "step gingerly"

Former State Economist Charles Colgan this morning presented his economic forecast to a crowd of roughly 400, saying Maine's economy would continue to be on thin ice in 2008.

At what's become an annual event in southern Maine's business community, Colgan, a professor of public policy and management at the University of Southern Maine, said a national recession spurred on by the subprime mortgage crisis and a corresponding decline in consumer spending is likely to hit in 2008, and will probably stall employment growth in Maine. But he said the state stands to weather the storm relatively well because the state's housing market hasn't been hit as hard as in other parts of the country.

He said the cost of doing business in Maine's metropolitan areas -- Portland, Lewiston-Auburn and Bangor -- is competitive with others in New England, but that high energy costs still make Maine less competitive with the rest of the country. "That ice is cracking," he said of the Maine economy, "so step gingerly."

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