OFFICES LOCATED ON 3RD FLOOR, BURTON M. CROSS BUILDING PHONE: (207) 624-7800 FAX: (207) 624-7804

www.Maine.gov

S T A T E O F M A I N E

D E P A R T M E N T O F AD M I N I S T R A T I V E & F I N A N C I A L S E R V I C E S

7 8 S T A T E H O U S E S T A T I O N

AUGUSTA, MAINE 04333-0078

SERVING THE PUBLIC AND DELIVERING ESSENTIAL SERVICES TO STATE GOVERNMENT

JANET T. MILLS

GOVERNOR

KIRSTEN LC FIGUEROA

COMMISSIONER

Consensus Economic Forecasting Commission

Background Materials for the March 29, 2019, Forecasting Meeting

Summary

Both the national and state economies had a good year in 2018 with preliminary annual data indicating that both

the U.S. economy and Maine economy continue to grow.

Maine’s real GDP grew 0.6% in the third quarter of 2018. Personal income in Maine grew 4.0% from 2017 to

2018, while wage and salary income, which is the largest component of total personal income, grew 3.9% over

the same period. The debt-to-income level for Maine businesses and households has started declining since its

highest level, which was in the fourth quarter of 2017. The Consumer Price Index was up 1.5% in February

2019 from a year ago.

Nationwide, consumer sentiment has improved after the recent government shutdown. The February 2019 level

was down 5.9% from a year ago and up 2.9% from January 2019. The small business optimism index was down

by 5.5% in February 2019 compared to one year ago, but up by 0.5% from the previous month.

The price of crude oil has continued increasing recently compared to the last month of 2018. However, the price

of crude oil is still lower than the high of $85.44 per barrel last year. Heating oil prices for the winter of 2018-

2019 were higher than the previous winter. Heating oil is around $2.98 per gallon while gasoline is currently

averaging $2.50 per gallon.

Existing single-family home sales in Maine were down 0.5% in February 2019 compared to the same month last

year and average housing permits for the February 2018–January 2019 period were 1.0% lower than the

previous 12-month period. The median home price in York, Cumberland, and Sagadahoc counties increased by

5.6, 7.3, and 1.9%, respectively, year-over-year. Mortgage delinquency rates in Maine have been declining but

remain higher than the national rate. The foreclosure rate in Maine was 0.30% in the third quarter of 2018.

Average monthly exports for Maine in 2018 were $235 million compared to average monthly exports of $226

million in 2017. Between 2017 and 2018, there was a 4.2% increase in total export value.

The following presents a picture of the Maine economy, comparing current economic indicators to historical

results.

2

1. Demographic Trends

Data from the U.S. Census Bureau’s 2017 population estimates indicate that approximately 28 percent

of Maine’s total population are baby boomers (53-71 years), while 46 percent of Maine’s population is working

age but not part of the Baby Boom generation (15-52 years). Note that the numbers reported above are subject

to substantial revisions. Fertility for women in the age cohort 35 to 50 years old increased from 17 births per

1,000 women in 2016 to 31 births per 1,000 women in 2017. Between 2016 and 2017, the foreign-born

population in Maine saw a statistically significant decline from 3.8 to 3.4 percent.

In terms of migration, 13 out of 16 counties saw positive net migration from 2016-2017 with highest net

migration in York, Cumberland, and Penobscot counties. The primary contributor to the positive net migration

is increased domestic migration with 13 out of 16 counties experiencing positive net domestic migration in

2017. Net domestic migration for the state in 2017 was 6,827. According to the 2017 ACS 1-year estimates, the

two age cohorts with the largest net domestic in-migration were 25 to 29 and 30 to 34, with net migration of

+3.5 and +2.0 percent, respectively. The table below highlights migration by age.

Maine Domestic Migration by Age, 2016-2017

Source: U.S. Census Bureau 2017 American Community Survey 1-year estimates, Sept. 13, 2018 release

Age

Domestic

in-migration

Domestic

out-migration

Net domestic

migration

Net migration as a percent

of total population

1 to 4 years 932 1,212 -280 -0.5%

5 to 17 years 1,720 2,864 -1,144 -0.6%

18 and 19 years 3,470 2,850 620 1.8%

20 to 24 years 4,476 5,502 -1,026 -1.4%

25 to 29 years 5,240 2,582 2,658 3.5%

30 to 34 years 3,121 1,556 1,565 2.0%

35 to 39 years 1,962 1,709 253 0.3%

40 to 44 years 1,987 1,346 641 0.9%

45 to 49 years 1,357 565 792 0.9%

50 to 54 years 2,308 1,381 927 1.0%

55 to 59 years 1,884 1,515 369 0.3%

60 to 64 years 1,745 1,098 647 0.6%

65 to 69 years 1,297 1,399 -102 -0.1%

70 to 74 years 1,192 869 323 0.5%

75 years and over 1,561 977 584 0.5% Net 6,827 0.5%

3

Source: U.S. Census Bureau 2017 Population Estimates, December 20, 2017 release

2. State Economy

Gross Domestic Product (GDP) In the third quarter of 2018, Maine’s real GDP was $57.0 billion, with $49.4 billion coming from private

industries and $7.5 billion from government (federal, state, and local). Maine’s total real GDP grew 0.6% from the second

quarter of 2018 to the third quarter of 2018. This was lower than the rate of national GDP growth, which was 0.8%.

Source: U.S. Bureau of Economic Analysis, February 26, 2019 release

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2010 2011 2012 2013 2014 2015 2016 2017

Net

mig

rati

on

Maine Migration Patterns, 2010 - 2017

DOMESTICMIG INTERNATIONALMIG NETMIG

$57,026

$49,463

$7,569

0

10,000

20,000

30,000

40,000

50,000

60,000

2008:Q3 2009:Q3 2010:Q3 2011:Q3 2012:Q3 2013:Q3 2014:Q3 2015:Q3 2016:Q3 2017:Q3 2018:Q3

Real GDP (in millions of 2012 chained dollars,

seasonally adjusted at annual rates)

All industry total

Private industries

Government and government enterprises

4

Source: U.S. Bureau of Economic Analysis, February 26, 2019 release

Personal Income

According to preliminary estimates from the U.S. Bureau of Economic Analysis, total personal income

grew 4.0 percent from 2017 to 2018. Wage and salary income grew by 3.9 percent during the same period.

Wage and salary disbursements, which are the largest component of personal income, averaged around $29.8

billion in 2018 (seasonally adjusted at annual rates). Total personal income averaged around $64.5 billion. In

anticipation of upward revisions to the preliminary estimates in September 2019, the CEFC deliberately

forecasted higher personal income growth rates based on additional information provided by Maine Revenue

Services and the Maine Department of Labor.

Source: U.S. Bureau of Economic Analysis, March 26, 2019 release

3.4%

2.6%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2010Q3 2011Q3 2012Q3 2013Q3 2014Q3 2015Q3 2016Q3 2017Q3 2018Q3

Real GDP Percent change from Previous Quarter

United States Maine

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Total Personal Income

Wage & Salary Disbursements

Supplements to W&S

Non-Farm Proprietors' Income

Dividends, Interest, & Rent

Transfer Receipts

Personal Income in Maine

2018 vs 2017 actuals CEFC 11/2018 forecast of annual growth, 2017-2018

5

Source: U.S. Bureau of Economic Analysis, March 26, 2019 release

3. Consumption and Expenditures

Consumer Price Index

The Consumer Price Index (CPI) was up 1.5 percent from February 2018 to February 2019. Core

inflation, which excludes food and energy prices, rose 2.1 percent over that same period. CPI rose modestly for

the first time in four months reflecting slowing economic growth. The Chained Consumer Price Index (Chained

CPI) increased 1.4 percent from February 2018 to February 2019. Core inflation rose 2.0% over the same

period. Chained CPI allows for substitutions in the basket of goods and services being measured.

Source: U.S. Bureau of Labor Statistics, March 12, 2019 release

-

10

20

30

40

50

60

70

Total Personal

Income

Wage & Salary

Disbursements

Supplements to

W&S

Non-Farm

Proprietors' Income

Dividends, Interest,

& Rent

Transfer Receipts

Bil

lio

ns

Maine Personal Income

2017 Annual 2018 Annual

-10%

-5%

0%

5%

10%

15%

20%

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-17

May

-17

Jun-1

7

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-18

May

-18

Jun-1

8

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

yea

r-o

ver

-yea

r p

erce

nt

chan

ge

Consumer Price Index - U.S. All Urban

All items All items, less food and energy Energy Food

6

Source: U.S. Bureau of Labor Statistics, March 12, 2019 release

Consumer Sentiment and Small Business Optimism

In February 2019, the survey-based University of Michigan Consumer Sentiment Index increased 2.9%

month-over-month and was down 5.9% from a year ago. The survey-based National Federation of Independent

Business (NFIB) Small Business Optimism Index was up 0.5% from the previous month and down 5.5% from a

year ago.

Source: University of Michigan, March 1, 2019 release; National Federation of Independent Businesses, March 12, 2019 release

-10%

-5%

0%

5%

10%

15%

20%D

ec-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-17

May

-17

Jun-1

7

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-18

May

-18

Jun-1

8

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

yea

r-o

ver

-yea

r p

erce

nt

chan

ge

Chained Consumer Price Index - U.S. All Urban

All items All items less food and energy Energy Food

50

60

70

80

90

100

110

120

Consumer Sentiment and Small Business Optimism Indexes

Univ. of Mich. Consumer Sentiment (1966=100) NFIB Small Business Optimism (1986=100)

7

Vehicles

The number of new automobile titles issued by the Maine Bureau of Motor Vehicles decreased 3.4%

from the two years spanning FY15/FY16 to the two years of FY17/FY18, while the number of used automobile

titles issued decreased 3.0%. Total registrations were up 2.9% from FY15/FY16 to FY17/FY18, though, led by

a large increase in trailer and motor homes registrations.

Type FY15/FY16 Total FY17/FY18 Total % Change

Auto

New 113,170 109,346 -3.4%

Used 351,882 341,172 -3.0%

Bus - -

New 298 344 15.4%

Used 321 286 -10.9%

Trucks - -

New 9,128 5,845 -36.0%

Used 12,296 10,592 -13.9%

Motorcycles - -

New 4,319 3,645 -15.6%

Used 16,440 13,681 -16.8%

Trailers - -

New 41,928 55,990 33.5%

Used 75,048 101,168 34.8%

Motor Homes - -

New 215 299 39.1%

Used 1,026 1,074 4.7%

Unknown - -

New 96 281 192.7%

Used 245 557 127.3%

Total 626,412 644,280 2.9%

Source: Maine Bureau of Motor Vehicles

8

4. Energy Sector

The U.S. Energy Information Administration (EIA), in their Annual Energy Outlook 2019, press release,

indicated that the U.S. will become a net energy exporter in 2020 and this will be coupled with slow growth in

U.S. energy consumption. In the short-term outlook published in March 2019, EIA forecasts that Brent spot

prices will average $63/b in 2019 and $62/b in 2020.

Crude Oil

The price of Brent crude oil is lower than last quarter (2018Q4) by 15 percent. The price/barrel as of

March 25, 2019, was $67.37.

Source: IHS, March 2019 release

$0

$20

$40

$60

$80

$100

$120

$140

Petroleum Crude Oil Price: Brent

Actual IHS Forecast

9

Heating Oil

The current statewide average cash price of No. 2 heating oil in Maine was $2.98/gallon based on the

March 20 update and has risen by approximately 0.1% since a month ago.

Source: U.S. Energy Information Agency, March 20, 2019 release

Gasoline

The price of gasoline in New England averaged $2.55 the week of March 18, 2019, slightly increased

from the previous week and $0.13 lower than one year ago. The average price of gasoline in the first three

months of 2019, $2.44, is lower than the average price of gasoline in the same period last year ($2.69).

Source: U.S. Energy Information Agency, March 20, 2019 release

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

October November December January February March

Pri

ce p

er g

all

on

Maine No. 2 Heating Oil Residential Price

Winter 2015-2016 Winter 2016-2017

Winter 2017-2018 Winter 2018-2019

3/18/2019, $2.55

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Mar

-14

Jul-

14

No

v-1

4

Mar

-15

Jul-

15

No

v-1

5

Mar

-16

Jul-

16

No

v-1

6

Mar

-17

Jul-

17

No

v-1

7

Mar

-18

Jul-

18

No

v-1

8

Mar

-19

Weekly New England (PADD 1A) All Grades All Formulations Retail Gasoline Prices

(Dollars per Gallon)

10

5. Housing

Single family existing-home sales in Maine were down 0.5% in February 2019 compared to February

2018. Although there was a decline in the number of units sold, median sales price of single family homes

increased by 2.9% between February 2018 and 2019. Single unit housing permits issued in Maine were 86%

higher than a year ago (January 2018) and 50% higher than a month ago (December 2018). Average monthly

single unit housing permits in Maine in the 12-month period from February 2018 through January 2019 were

1.0% lower than in the previous 12-month period.

According to the Federal Housing Finance Agency (FHFA), the House Price Index, “measures average

price changes in repeat sales or refinancing on the same properties.” Maine’s house price index increased by

5.3% from the same quarter last year (2017:Q4 to 2018:Q4). In the most recent quarter, local growth rates were

in line with national growth rates. Further, Maine’s growth in recent quarters has been higher than New England

growth rates. Maine’s MSAs - Bangor, Lewiston-Auburn, and Portland-South Portland - have all seen positive

growth in house price indexes throughout 2018.

Sources: National Association of REALTORS and Maine Association of REALTORS, monthly releases

-30%

-20%

-10%

0%

10%

20%

30%

Mar

-14

Jun-1

4

Sep

-14

Dec

-14

Mar

-15

Jun-1

5

Sep

-15

Dec

-15

Mar

-16

Jun-1

6

Sep

-16

Dec

-16

Mar

-17

Jun-1

7

Sep

-17

Dec

-17

Mar

-18

Jun-1

8

Sep

-18

Dec

-18

Per

cent

chan

ge

from

yea

r ag

o

Single Family Existing-Home Sales

Maine US

11

Source: US Census Bureau, March 25, 2019 release, via Federal Reserve Bank of Boston

Source: Federal Housing Finance Agency, February 26, 2019 release

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

0

50

100

150

200

250

300

350

400

450

500N

ov-1

2

Fe

b-1

3

Ma

y-1

3

Au

g-1

3

No

v-1

3

Fe

b-1

4

Ma

y-1

4

Au

g-1

4

No

v-1

4

Fe

b-1

5

Ma

y-1

5

Au

g-1

5

No

v-1

5

Fe

b-1

6

Ma

y-1

6

Au

g-1

6

No

v-1

6

Fe

b-1

7

Ma

y-1

7

Au

g-1

7

No

v-1

7

Fe

b-1

8

Ma

y-1

8

Au

g-1

8

No

v-1

8

Nu

mb

er o

f P

erm

its

in t

he

US

Nu

mb

er o

f P

erm

its

in M

ain

eSingle Unit Housing Permits Authorized (Monthly, SA)

ME US

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2009Q4 2010Q4 2011Q4 2012Q4 2013Q4 2014Q4 2015Q4 2016Q4 2017Q4 2018Q4

yea

r-o

ver

-yea

r

Housing Price Index

Maine United States New England Division

12

Source: Federal Housing Finance Agency, February 26, 2019 release

6. Borrowing

The share of mortgages in Maine that are delinquent 30 days or more was 2.4% in the second quarter of

2018. Maine’s foreclosure rate was 0.3% in the second quarter of 2018, unchanged from the previous quarter

but in line with recent foreclosure rates. Maine’s debt to income ratio is 24.52, lower than a high point of 24.71

in 2017Q4.

Source: Mortgage Bankers Association, via Moody’s Analytics Feb. 2019 release

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2009Q4 2010Q4 2011Q4 2012Q4 2013Q4 2014Q4 2015Q4 2016Q4 2017Q4 2018Q4

yea

r-o

ver

-yea

r

MSAs Housing Price Index

Bangor Lewiston-Auburn Portland-South Portland

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

200

7Q

1

200

7Q

4

200

8Q

3

200

9Q

2

201

0Q

1

201

0Q

4

201

1Q

3

201

2Q

2

201

3Q

1

201

3Q

4

201

4Q

3

201

5Q

2

201

6Q

1

201

6Q

4

201

7Q

3

201

8Q

2

Per

cent

of

Lo

ans

Pas

t D

ue

at l

east

30

day

s,

seas

onal

ly a

dju

sted

MBA Mortgage Delinquencies

Maine United States

13

Source: Mortgage Bankers Association, via Moody’s Analytics Feb. 2019 release

Source: Moody’s Analytics, Feb. 2019 release

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

200

7Q

1

200

7Q

4

200

8Q

3

200

9Q

2

201

0Q

1

201

0Q

4

201

1Q

3

201

2Q

2

201

3Q

1

201

3Q

4

201

4Q

3

201

5Q

2

201

6Q

1

201

6Q

4

201

7Q

3

201

8Q

2Fo

recl

osu

res

Sta

rted

as

a P

erce

nt

of

All

Lo

ans,

Sea

sonal

ly A

dju

sted

MBA Foreclosure Starts

United States Maine

24.52

19.00

20.00

21.00

22.00

23.00

24.00

25.00

200

3Q

1

200

3Q

3

200

4Q

1

200

4Q

3

200

5Q

1

200

5Q

3

200

6Q

1

200

6Q

3

200

7Q

1

200

7Q

3

200

8Q

1

200

8Q

3

200

9Q

1

200

9Q

3

201

0Q

1

201

0Q

3

201

1Q

1

201

1Q

3

201

2Q

1

201

2Q

3

201

3Q

1

201

3Q

3

201

4Q

1

201

4Q

3

201

5Q

1

201

5Q

3

201

6Q

1

201

6Q

3

201

7Q

1

201

7Q

3

201

8Q

1

Debt to Income Ratio, (%) for Maine

14

7. Trade Outlook

Exports

Year-over-year comparisons show that compared to December 2017, total exports for December 2018 in

Maine decreased by 8.1%. Similarly, year-over-year comparisons show that total exports decreased by 1.1%

nationally and 3.1% regionally. Compared to December 2017, two export industries – paper and computer &

electronic products – saw increases in total exports, while the fish industry experienced a decline in December

2018.

Source: USA Trade Online, March 6, 2019 release

Source: USA Trade Online, March 6, 2019 release

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Yea

r-o

ver

-yea

r p

erce

nt

chan

ge

Percent Changes, Year-over-year in Total Exports

Maine US

Top 10 export partners

Canada

China

Malaysia

Italy

Japan

South Korea

Germany

Singapore

Netherlands

Mexico

Top 10 import partners

Canada

China

Netherlands

Germany

Japan

United Kingdom

Vietnam

Mexico

Finland

Thailand