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Only 4 economic sectors generate material wealth

Smart Manufacturing & High Technology NH’s Leading Economic Sector Dennis Delay Economist, NHCPPS December 2011. “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”. Only 4 economic sectors generate material wealth.

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Only 4 economic sectors generate material wealth

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  1. Smart Manufacturing &High TechnologyNH’s Leading Economic SectorDennis DelayEconomist, NHCPPSDecember 2011 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

  2. Only 4 economic sectors generate material wealth • Agriculture • is limited by natural resources. • Mining • is also limited by natural resources. • Construction • is not easily transferable across national and international borders. • Manufacturing • is not limited by natural resources, and • is transferable across national and international borders.

  3. Other sectors of the economy do create wealth, but don’t produce material wealth • Real Estate • is dominated by imputed and actual rental income on property. • Health Care and Social Assistance • relies on the material wealth creating sectors, while improving our longevity and overall quality of life. • Retail Trade • also relies on the goods created in the material wealth creating sectors.

  4. Manufacturing is important to NH Source: US Bureau of Economic Analysis

  5. SMHT employers provide high wage jobs for NH workers Source: US Bureau of Economic Analysis

  6. Top export industry in terms of employment - tourism second Source: INHS Tourism Satellite Account FY2010

  7. Higher wages support GSP from sales outside of the state Source: INHS Tourism Satellite Account FY2010

  8. NH Manufacturing - support for public services • NH Manufacturers paid over $100 million in combined State BPT and BET in FY2008. • Manufacturers also pay state and local property taxes, unemployment insurance taxes, etc. • 100 new manufacturing jobs in NH results in an additional 66 indirect and induced jobs in the rest of the NH economy, and adds (per year) • $9 million in earnings. • $17 million in Gross Domestic Product (GDP). • Generates $1.0 million in state and local tax revenue. Source: Connect New England Model, 2011 update

  9. Manufacturing Economic Multiplier

  10. NH SMHT BIA Online Survey • Membership of the Business and Industry Association and High Technology Council, specifically those members who have been identified as SMHT companies. • Respondents ranked the competitive pressures they operate under, in particular when considering continuing or increasing production at a NH-based facility. • Ranked the importance of factors on a scale of 1 to 5 (1=low importance to 5=high importance).

  11. NH SMHT under pressure

  12. NH SMHT legislative priorities

  13. NH SMHT policy priorities

  14. NH Manufacturing competes nationally and globally • Globalization, offshoring and outsourcing, the rapid pace of technological change, and rising costs of healthcare and other labor costs all have a more profound impact on manufacturing than on any other industry. • Consider globalization – the average school administrator or housing professional probably does not think much about the Far East. But because state-of-the-art manufacturing facilities are now operating in China and elsewhere in the world, NH’s local manufacturers have to stay current with the latest technological advances just to stay in the game.

  15. NH competes with the world on wages

  16. NH competes with the world on energy prices

  17. NH competes with the world on healthcare costs

  18. NH competes with the world on corporate taxes

  19. How can State policy encourage SMHT? • Healthcare policy • Costs most significant competitive pressure for SMHT • Encourage workforce development and education • Human capital is a key determinant to economic prosperity • Invest in infrastructure • Effective use of state resources • Tax policy • Business tax credits do foster targeted activity

  20. New Hampshire Center for Public Policy Studies Board of Directors Todd I. Selig, Chair David Alukonis Michael Buckley William H. Dunlap Sheila T. Francoeur Stephen Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos Martin L. Gross, Chair Emeritus John D. Crosier, Sr., Emeritus Want to learn more? • Online: nhpolicy.org • Facebook: facebook.com/nhpolicy • Twitter: @nhpublicpolicy • Our blog: policyblognh.org • (603) 226-2500 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” 20

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