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 June 25, 2020 Forecasting Meeting

Summary

While both the national and state economies experienced continued economic growth in 2019, the onset of

COVID-19 in early 2020 has led to a sharp decline in conditions, with the National Bureau of Economic

Research officially determining that the U.S. economy entered a recession beginning in February 2020.

Much of the traditional economic data in this report is lagged and so reflects conditions prior to the recession.

Some data sources are beginning to show early indications of the effects. Total personal income in Maine grew

3.1% in the first quarter of 2020, driven by sharp increases in transfer receipts. Wage and salary income, which

is the largest component of total personal income, fell by 0.5%. The Consumer Price Index was up 1.8% in

2019 but fell to 0.2% growth year-over-year in May 2020 as energy prices fell by over 18%.

Nationwide, consumer sentiment has plummeted in the wake of COVID-19. The June 2020 consumer sentiment

index was down 19.7% compared to June 2019, however, the index rose 9.1% from May 2020. The Small

Business Optimism Index was down by 10.1% in May 2020 compared to one year ago. Both indices bottomed

out in April 2020.

The price of crude oil fell by 20.4% from the fourth quarter of 2019 to the first quarter of 2020, resulting in

declines in both heating oil prices and gasoline prices. Gasoline prices averaged $2.01 on June 8, 2020 in New

England.

Data for April 2020 show total exports in Maine decreased by 20.8% over April 2019 and by 2.7% for the year

through April.

Single family existing-home sales in Maine in April 2020 were down 15.4% compared to April 2019, while the

median sales price increased 12.3% from a year prior. Maine’s House Price Index rose by 8.4% in the first

quarter of 2020, higher than both New England and the United States.

Social distancing measures have led to a decline in overall economic activity. The first week of June had a year-

over-year decline of 18.5% in vehicle miles traveled, up from a decline of 42% in the last week of March. New

data from the U.S. Census Bureau shows that 44% of households in Maine have experienced a loss of

employment income since March. Credit and debit card data indicate that consumer spending has begun to

recover and is currently positioned at 0.3% over its January levels, led by purchases of general merchandise.

Spending in the hospitality industry remains at -30% compared to pre-COVID-19 levels.

2

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

trends.

1. Demographic Trends

Maine’s population increased 0.4% from 2018 to 2019, driven by migration into the state. Data from the

U.S. Census Bureau’s 2018 population estimates indicate that approximately 23 percent of Maine’s total

population are baby boomers (55-74 years), while 35 percent of Maine’s population is of younger working age,

15-44 years old. 14 out of 16 counties saw positive net migration from 2017-2018 with the highest net

migration in York and Cumberland counties. A large contributor to the positive net migration is increased

domestic migration with 12 out of 16 counties experiencing positive net domestic migration in 2018, although

approximately 30% of Cumberland’s new resident population was driven by international migration. Net

domestic migration for the state in 2019 was 6,613. Note that the numbers reported above are subject to

substantial revisions each year when new population estimates are released.

According to the 2018 ACS 1-year estimates, all age cohorts except for 75 years and older had positive

net domestic migration in 2018. The table below highlights migration by age.

Maine Domestic Migration by Age, 2017-2018

Source: U.S. Census Bureau 2018 American Community Survey 1-year estimates, Sept. 26, 2019 release

1Census Population Estimates and American Community Survey estimates differ due to estimation and sampling methods. Population

estimates do not provide detailed information that can be found on ACS, such as age breakdowns for migration. For this reason, both

are reported despite large variance.

Age

Domestic

in-migration

Domestic

out-migration

Net domestic

migration

Net migration as a percent

of total population

1 to 4 years 1,646 641 1,005 2.1%

5 to 17 years 3,067 1,251 1,816 1.0%

18 and 19 years 3,180 2,316 864 2.8%

20 to 24 years 4,930 4,647 283 0.4%

25 to 29 years 3,933 3,763 170 0.2%

30 to 34 years 2,697 1,582 1,115 1.4%

35 to 39 years 2,000 1,308 692 0.9%

40 to 44 years 1,934 878 1,056 1.5%

45 to 49 years 1,613 1,364 249 0.3%

50 to 54 years 1,311 807 504 0.5%

55 to 59 years 1,647 1,022 625 0.6%

60 to 64 years 2,247 1,360 887 0.8%

65 to 69 years 2,288 1,827 461 0.5%

70 to 74 years 1,082 732 350 0.5%

75 years and over 1,131 1,514 -383 -0.3% Net 9,6941 0.7%

3

Source: U.S. Census Bureau 2019 Population Estimates, December 30, 2019 release

2. State Economy

Gross Domestic Product (GDP)

In the fourth quarter of 2019, Maine’s real GDP was $58.9 billion, with $51.1 billion coming from

private industries and $7.8 billion from government (federal, state, and local).

Source: U.S. Bureau of Economic Analysis, April 7, 2020 release

-4000

-2000

0

2000

4000

6000

8000

2011 2012 2013 2014 2015 2016 2017 2018 2019

Maine Migration Patterns, 2011-2019

International Migration Domestic Migration Net migration

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Real GDP (in millions of 2012 chained dollars, seasonally adjusted at annual rates)

All industry total Private industries Government and government enterprises

4

Maine’s annualized growth rate for total real GDP was 1.9% in 2019. This was slightly lower than national

growth of 2.3% in 2019.

Source: U.S. Bureau of Economic Analysis, April 7, 2020 release

Personal Income

According to the U.S. Bureau of Economic Analysis, total personal income grew by 3.1% in the first

quarter of 2020. Wage and salary disbursements, which are the largest component of personal income, averaged

$31.9 billion, 0.5% less than the previous quarter. Transfer receipts grew by 13.3% in Maine, compared to

10.1% for the U.S.

Source: U.S. Bureau of Economic Analysis, June 23, 2020 release

-3

-2

-1

0

1

2

3

4

5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Per

cen

t C

han

ge f

rom

Pre

vio

us

Yea

r

Real GDP Percent Change, Year

United States Maine

-2

0

2

4

6

8

10

12

14

Personal income Wages and salaries Supplements to wagesand salaries

Dividends, Interest,and Rent

Personal CurrentTransfer Receipts

Proprietor's Income

Per

cen

t C

han

ge

Components of Personal Income, Annualized Percent Change, 2019:Q4-2020:Q1

Maine US

5

Source: U.S. Bureau of Economic Analysis March 24, 2020 release

3. Consumption and Expenditures

Consumer Price Index

The Consumer Price Index (CPI) was up 0.2% in May 2019 over the previous year. Core inflation,

which excludes food and energy prices, rose 1.2% over May of last year. While the CPI for energy was down

18.3% over last year, food at home was up substantially to 4.8% year-over-year.

Source: U.S. Bureau of Labor Statistics, June 10, 2020 release

43% 21% 18% 11% 7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Maine

Major Components of Personal Income, 2019

Wages and salaries Personal current transfer receipts Dividends, interest, and rent

Supplements to wages and salaries Proprietors' income

0%

1%

1%

2%

2%

3%

3%

Per

cen

t C

han

ge f

rom

Yea

r A

go P

erio

d

Consumer Price Index- U.S. All Urban

All Items All Items, Less Food and Energy

6

The Chained Consumer Price Index (Chained CPI) fell -0.2% in May, compared to a year ago. Core

inflation rose 1.0% 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, June 10, 2020 release

Consumer Sentiment and Small Business Optimism

In June 2020, the survey-based University of Michigan Consumer Sentiment Index was down 19.7%

over June 2019.This is up 9.1% compared to May 2020, when the index was 26.1% below the previous year.

The survey-based National Federation of Independent Business (NFIB) Small Business Optimism Index was up

3.9% in May 2020 from the previous month and down 10.1% from a year ago. Similar to the Consumer

Sentiment Index, this index fell sharply in April before having a slight rebound in May.

Source: University of Michigan, June 2020 release; National Federation of Independent Business, May 2020 release

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Chained Consumer Price Index - All US Urban

All items All items less food and energy

60

70

80

90

100

110

120

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

Oct

-18

Jan

-19

Ap

r-1

9

Jul-

19

Oct

-19

Jan

-20

Ap

r-2

0

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 3.6%

from FY17/FY18 to the two years of FY18/FY19, while the number of used automobile titles issued decreased

by 29.6%. Total registrations were up 26.2% from FY17/FY18 to FY18/FY19, though, led by a large increase

in trailer registrations.

Type FY17/FY18 Total FY18/FY19 Total % Change

Auto

New 119,452 123,742 3.6%

Used 361,744 254,792 -29.6%

Bus - - New 326 335 2.8%

Used 292 209 -28.4%

Trucks - - New 7,833 5,153 -34.2%

Used 11,363 10,756 -5.3%

Motorcycles - - New 3,998 3,208 -19.8%

Used 14,472 13,422 -7.3%

Trailers - - New 40,892 115,136 181.6%

Used 77,169 277,102 259.1%

Motor Homes - - New 257 1,395 442.8%

Used 1,036 953 -8.0%

Unknown - - New 151 235 55.6%

Used 480 465 -3.1%

Total 639,465 806,903 26.2%

Source: Maine Bureau of Motor Vehicles

8

4. Energy Sector

In its June 2020 short-term outlook, the Energy Information Administration (EIA) projects Brent crude

oil prices will average $37 per barrel in the second half of 2020, and $48 per barrel in 2021. This is down from

projections of $65 per barrel for 2020 and $68 per barrel for 2021 in the January short-term outlook.

Crude Oil

The price of Brent crude oil in 2020:Q1 was 20.4% lower than the previous quarter. The price per barrel

as of June 8, 2020 was $39.66.

Source: IHS, June 2020 release

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

200

6:1

200

6:3

200

7:1

200

7:3

200

8:1

200

8:3

200

9:1

200

9:3

201

0:1

201

0:3

201

1:1

201

1:3

201

2:1

201

2:3

201

3:1

201

3:3

201

4:1

201

4:3

201

5:1

201

5:3

201

6:1

201

6:3

201

7:1

201

7:3

201

8:1

201

8:3

201

9:1

201

9:3

202

0:1

202

0:3

202

1:1

202

1:3

202

2:1

202

2:3

Petroleum Crude Oil Price: Brent

Actual IHS Forecast

9

Heating Oil

The statewide average cash price of No. 2 heating oil in Maine was $2.63 per gallon for the 2019-2020

heating oil season. Prices declined late in the season as crude oil prices declined.

Source: U.S. Energy Information Agency, March 30, 2020 release

Gasoline

The price of gasoline in New England averaged $2.01 the week of June 8, 2020, slightly higher than the

previous week and about 70 cents lower than one year ago. The average price of gasoline in 2019 was $2.65 per

gallon, down 6.3% or 18 cents from 2018’s average of $2.83 per gallon. The average for the first half of 2020

was $2.29 per gallon.

Source: U.S. Energy Information Agency, June 8, 2020 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

gall

on

Maine No. 2 Heating Oil Residential Price

Winter 2016-2017 Winter 2017-2018 Winter 2018-2019 Winter 2019-2020

Jun 08, 2020

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Pri

ce p

er G

allo

n

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 in April 2020 were down 15.4% compared to April 2019,

while the median sales price increased 12.3% from a year prior (to $235,800 statewide). Total single-family

sales nationwide were down 15.5% compared to a year prior and had a median price of $288,700. The total

number of sales in Maine for 2019 was 2.3% higher than 2018, at 18,279, the highest number all decade.

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

Private single-unit housing permits fell sharply at the national level in April 2020, coming in at 16.8% lower

than April 2019 and nearly 25% lower than the previous month. In Maine, permits fell slightly by 14.5% over

the previous month, but were 21.5% higher than April 2019.

Source: US Census Bureau, April 2020 release, via Federal Reserve Bank of St. Louis

0

100

200

300

400

500

600

0

200

400

600

800

1000

1200

1400

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

Jul-

16

Jan

-17

Jul-

17

Jan

-18

Jul-

18

Jan

-19

Jul-

19

Jan

-20

Un

its

(Mai

ne)

Th

ousa

nd

s o

f U

nit

s (U

nit

ed S

tate

s)

New Private Single-Unit Housing Permits, Seasonally Adjusted

United States Maine

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

January-16 January-17 January-18 January-19 January-20

Per

cent

Chan

gef

rom

a y

ear

ago

Single Family Existing-Home Sales

US Maine

11

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 8.4%

from the fourth quarter of 2019 to the first quarter of 2020. In the most recent quarter, local year-over-year

growth was higher than the U.S. and region, with New England growing by 5.4% and the U.S. by 5.7%.

Maine’s MSAs - Bangor, Lewiston-Auburn, and Portland-South Portland – all saw increases in 2019.

Source: Federal Housing Finance Agency, May 26, 2020 release

Source: Federal Housing Finance Agency, May 26, 2020 release

6. Borrowing

The share of mortgages in Maine that are delinquent 30 days or more was 2.7% in the first quarter of 2020.

Maine’s foreclosure rate was 0.22% in the first quarter of 2020, down from the previous quarter but in line with

recent foreclosure rates. Maine’s debt to income ratio was 23.19 as of 2019Q4 and has remained relatively flat

since early 2018.

8.4%

5.4%

5.7%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2010Q1 2011Q1 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1 2017Q1 2018Q1 2019Q1 2020Q1

Purchase-Only House Price Index, Seasonally Adjusted

Maine New England USA

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

MSA Housing Price Index, annual averages, year-over-year change

Bangor Lewiston-Auburn Portland-South Portland

12

Source: Mortgage Bankers Association, via Moody’s Analytics June 12, 2020 release

Source: Mortgage Bankers Association, via Moody’s Analytics June 12, 2020 release

Source: Moody’s Analytics, June 2020 release

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Per

cen

t o

f L

oan

s P

ast

Due

at lea

st 3

0

day

s, s

easo

nal

ly a

dju

sted

MBA Mortgage Delinquencies

Maine United States

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

Fo

recl

osu

res

Sta

rted

as

a P

erce

nt

of

All

Lo

ans,

Sea

son

ally

Ad

just

ed

MBA Foreclosure Starts

Maine US

2019Q4, 24.32

18.00

19.00

20.00

21.00

22.00

23.00

24.00

25.00

Debt to Income Ratio, (%) for Maine

13

7. Trade Outlook

Exports

Data for April 2020 show total exports in Maine decreased by 20.8% over April 2019 and by 2.7% for the year

through April. Total exports from Maine totaled $181,694,649 in April 2020, while imports totaled

$283,320,050.

Source: USA Trade Online, January 7, 2020 release

Source: USA Trade Online, June 4, 2020 release

-100%

-50%

0%

50%

100%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Percent Changes, year-over-year in Total Exports

Maine U.S.

49.1%

4.0%3.9%3.8%

3.7%

3.3%

3.2%

3.0%

2.9%

2.5%

20.5%

Top export partners of April 2020

Canada

China

Hong Kong

Malaysia

Korea, South

Philippines

Singapore

Japan

Turkey

United Kingdom

All other

61.6%

6.5%3.8%

2.0%

2.0%

1.6%

1.5%

1.3%

1.2%

1.1%

17.2%

Top Import Partners of April 2020

Canada

China

Germany

Mexico

United

KingdomVietnam

Japan

Italy

France

14

8. COVID-19 Impacts

Traffic reductions

Since the second week of March, traffic on Maine roadways has significantly decreased as more people work

from home and fewer businesses are open to customers. As of the first week of June, total Vehicle Miles

Traveled (VMT) was 18.5% lower than the same week of 2019. VMT has been gradually rising since it reached

a trough of -42% in the last week of March.

Source: Department of Transportation, June 9, 2020

Household Pulse Surveys

Surveys from the U.S. Census Bureau and the University of Maine School of Economics give a clearer picture

of the economic situation for households and businesses in Maine. The Household Pulse Survey from the

Census Bureau indicates that as of the second week of June, 44.7% of households in Maine have experienced a

loss of employment income, with losses skewed towards younger workers.

Source: U.S. Census Bureau Household Pulse Survey, June 17, 2020 release

-18.5%

-45.0%

-40.0%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

MarchWeek 2

MarchWeek 3

MarchWeek 4

MarchWeek 5

AprilWeek 1

AprilWeek 2

AprilWeek 3

AprilWeek 4

MayWeek 1

MayWeek 2

MayWeek 3

MayWeek 4

JuneWeek 1

Vehicle Miles Travelled (VMT) in Maine, Year-over-year change

0%

10%

20%

30%

40%

50%

60%

70%

18 - 24 25 - 39 40 - 54 55 - 64 65 and above

Experienced and Expected loss of employment income by age (June 4-June 9)

Self or HH member experienced loss since March 13th Self or HH member expect loss of income in next 4 weeks

15

Consumer Spending

Credit and debit card purchase data as of June 10 show that spending seems to have recovered, and sits at

+0.3% in Maine, much higher than -11.3% for the nation. Spending data also appear to demonstrate that

stimulus payments contributed to this growth in spending.

Source: Affinity Solutions, Opportunity Insights Economic Tracker

The recovery of consumer spending is largely due to increasing purchases of apparel and general merchandise

(+16.4%) and healthcare (-3.8%). Restaurant & Hotel spending remains at -30.3%, while Entertainment &

Recreation spending remains 53% lower than in January.

Source: Affinity Solutions, Opportunity Insights Economic Tracker