According to the forecasters’ survey of the Philadelphia Federal Reserve, Delaware's RGP will grow 19.1% in 2020 Q3 and 5.8% in 2020 Q4, for a 2020 average of -5.2%. The year 2021 is expected to register an average growth rate of around 3.5%. Having weathered the downsizing of its chemical industry, Delaware's RGP is expected to track with the nation, but with more volatile swings.
Slow growth in total wages will result in continued slow growth in Delaware's personal income, and Delaware's per capita income will remain below the nation. The bulk of new jobs in Delaware pay a below-average wage.
The Delaware Department of Labor’s projection of employment growth for the coming two years is 0.6% per annum. This coincides with the Delaware Population Consortium’s population growth rate projections of 0.4% for New Castle County and 1.0% for Sussex County. The three-month moving average employment growth rate for Delaware continues to be below the 12-month moving average, so a positive year over year Delaware's employment growth rate will not occur until April 2021.Total Delaware employment won’t return to its 2019 level until 2023.
Slow population growth in Delaware means slow growth in the state’s labor force. It is therefore expected that over the next few years, Delaware’s unemployment rate will track with and be slightly below the nation.
OVERVIEW
Real Gross Product (RGP):
Since 2009, Delaware has had five recessions (two-quarters of decline in RGP) compared to one in the nation.
In 2020 Q2 RGP declined 9.0% in Delaware compared to an 8.5% drop across the nation.
Between 2015-2019 Delaware's RGP declined 3.6%, the worst performance among all the states.
Personal Income:
Adjusted for inflation, per capita Delaware's personal income went from a rank of 8th among the states in 1989 to a rank of 22nd in 2019, recording the slowest increase in per capita income growth of all the states. Delaware per capita income has gone from 12% above the U.S. to 4% below.
Over the five-year change in total personal income, Delaware ranked 18th; 24th in net earnings, 28th in dividends, rent, interest, and 7th in transfer payments. In other words, the strongest performing component of Delaware's personal income has been "transfer payments" (e.g., Social Security, Medicare, Medicaid, TANF).
Transfer payments now constitute 21% of Delaware's personal income. From 2009-19 total Delaware transfer payments rose 67% vs. 46% for the nation. Over 45% of Delaware’s transfer payments are Medicaid and Medicare benefits and 34% from Social Security benefits.
Over ten years (2009-2019), the average wage in Delaware has gone from 5% above the nation to 1% below. From September 2019 to September 2020, total wages in Delaware rose 1.7% compared to 4.9% across the nation. This ranked Delaware 39th among the states.
Employment:
Over ten years, 2009-2019, Delaware's total employment has increased 1.3% per year.
From September 2019 to September 2020, total employment declined 8.1% in Delaware vs. a decline of 6.3% in the U.S. This rate of loss ranked Delaware 42nd among the states.
Unemployment:
In 2019, Delaware’s unemployment rate hit a low of 3.5%. Following COVID, the state’s unemployment rate soared to a high of 15.9%.
As of October 2020, Delaware’s unemployment rate was down to 5.6% vs. 6.2% for the whole nation.
Other miscellaneous data trends of note include
Delaware ranks last among the states in the percent change in patents between 1996-2016.
Delaware ranks 13th among the states in 2019 for total bankruptcies per 1,000 persons.
Delaware ranks 16th among the states in state and local government revenue per person from own sources and 9th in expenditures per person.
This Delaware quarterly economic snapshot is based upon data taken by the Caesar Rodney Institute from the U.S. Economic Development Administration, the Bureau of Labor Statistics, the Bureau of Economic Analysis, and other public sources. The purpose is to clearly understand where Delaware's economy is and what may lie ahead.
SUBSCRIBE NOW!
Subscribe to receive CRI Policy analysis, updates, and event notifications!