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LOSSES WON'T HIT '90s LEVELS

Maine is expected to see a 2.9 percent decline in employment from a peak in the fourth quarter of 2007 to the third quarter of 2010, with heavy job losses resulting from the closure of the Brunswick Naval Air Station. But only mild job losses are projected for the state's manufacturing sector, and the overall job loss is expected to be far less than the 1990-1991 recession. Existing home sales were down nearly 18 percent through the first three quarters of 2008, though the median home price had dropped by only 4 percent.

PROVIDENCE, R.I. — Maine and the rest of New England are sliding into a "significant recession" and could lose a quarter-million jobs by the end of the decade, according to economists at the New England Economic Partnership, who met Thursday in Boston.

They forecast that unemployment in the region would rise to its highest level since 1992, hitting more than 8 percent by mid-2010.

Among the six New England states, economists are seeing a wide degree of differentiation in jobless numbers. Rhode Island is expected to continue to see the highest rates in the region, peaking at 10.3 percent.

Maine could be next in line, with a projected peak unemployment rate of 8.7 percent.

Connecticut and Massachusetts would land in the middle, each at 8.3 percent. And New Hampshire could peak at 7.4 percent, with the lowest spike in unemployment in Vermont, at 6.9 percent.

Charles Colgan, a Maine economist, said that although the news is bleak, Maine – which stands to lose more than 17,000 jobs through the third quarter of 2010 – should fare better than Connecticut and Massachusetts, as well as Rhode Island.

"Maine enters the national recession in a little stronger position than other states," Colgan said in his four-year economic forecast, which was released Thursday. A professor at the University of Southern Maine's Muskie School of Public Service, he's also associate director of the Maine Center for Business and Economic Research.

"The bottom fell out in the fall, and Maine, like the rest of the country, is now squarely facing a recession of some depth and length," Colgan said.

He said it won't be as disastrous as the 1990-91 recession in Maine, but will be more serious than the most recent recession, in 2001.

Colgan said the hardest-hit sectors will be construction, retail and government. He anticipates modest growth in the education and health services sectors and in professional and business-service jobs.

Company layoffs won't account for as big a portion of the job losses as self-employed construction workers filing for unemployment, Colgan said.

"The biggest problem for Maine is it will take us a while to get out of the recession," he said. Most of the lost jobs will be recovered by 2012, he said.

Colgan said Maine must also endure the closing of the Brunswick Naval Air Station, with hundreds of military personnel and their families expected to leave the state in 2009 and 2010.

Colgan forecasts that Maine could lose from 10,000 to 20,000 jobs next year, or 3 percent of its work force. By comparison, Maine lost 32,000 jobs – 7 percent of its work force – during the 1990 recession. The state lost about 9,000 jobs during the 2001 recession.

Personal income growth in Maine is also expected to decline slightly, he said.

Anyone looking to change jobs for a higher-paying position probably won't have much success. Unionized workers, he said, can expect to see their companies impose wage freezes.

"I don't see public-sector employees getting any raises, and unionized workers will have very little bargaining power," Colgan said.

On the positive side, Maine is developing several wind energy projects, and Central Maine Power Co. intends to invest $1.5 billion to upgrade its transmission line network.

Maine has weathered five recessions since 1975, with the current recession expected to rank in the middle as far as severity.

David Farmer, spokesman for Gov. John Baldacci, said there is some good news heading into 2009.

Boston Financial, a customer support provider to financial services companies, announced recently it will open an office in Rockland and expects to create 200 new jobs over the next two years. Notify MD, which provides messaging services to doctors, will expand into Winthrop, a move that will generate 100 new jobs in the next year.

Farmer said the governor has...