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Jan. 9 (Bloomberg) -- The Republican presidential field faces an odd testing ground for an election campaign built on economic discontent.
Tomorrow’s first-in-the-nation presidential primary in New Hampshire takes place in a state that had a 5.2 percent jobless rate in November, the fourth lowest in the U.S. The residents’ average income is higher than most states, and no state has a smaller share of its population living in poverty.
Still, concern over the economy looms large among New Hampshire residents, a sign of how thoroughly the topic is eclipsing other issues in the presidential campaign even amid signs the country’s labor market is gaining momentum.
“There is a sense of economic malaise in New Hampshire despite the numbers you see,” said Russ Thibeault, president of Applied Economic Research, a consulting firm in Laconia, New Hampshire. “If you talk to people in the street or in the coffee shop, they don’t feel the economy is in good shape.”
The economy, followed closely by the related areas of government debt and jobs, was the top issue that likely New Hampshire primary voters said they would look to in assessing candidates, according to a Bloomberg News poll conducted Nov. 10-12. All other issues -- immigration, the war in Afghanistan, gay marriage, abortion, among them -- trailed far behind.
“Everybody’s rocking around and worried about money, worried about how much they’re going to have, what’s going to happen on major economies,” said Bob Giannattasio of Franconia.
Giannattasio, 66, a real estate broker, came to a town hall meeting with Republican candidate Newt Gingrich last week with one main concern: “We have to elect somebody who can help with the economy.”
New Hampshire has experienced some high-profile layoffs. Three stores in the state were among 20 that the home- improvement retailer Lowe’s Companies Inc. announced it was closing in October, costing the state more than 270 jobs. Dartmouth-Hitchcock Medical Center in Lebanon said in November it would lay off 50 workers, citing a funding shortfall partially resulting from cuts in the state budget.
“People may not be hurting as much in New Hampshire as in other parts of the country, but they’re still hurting,” said Wayne MacDonald, the chairman of the state Republican Party. “People look around and are frightened about what the future holds.”
Barely Making It
That’s true of Margaret McEleny, 58, of Wilton, a cost- accounting employee who said she worries that professional jobs are vanishing and sees little prospect that her 22-year-old son, Mike, will be able to find work in New Hampshire when he graduates from college next year.
“We’re making it in this economy, but just barely,” said McEleny, who attended a rally for Texas Representative Ron Paul in Nashua. “I’m looking for a candidate that’s going to set good, sound fiscally responsible policies for us that will make sure there are opportunities for young people to build on.”
Mitt Romney, the former governor of neighboring Massachusetts, has made economic competence a centerpiece of his presidential bid, stressing expertise developed during his career as a business executive. Romney is leading polls in New Hampshire, with 35 percent of likely primary voters voicing support, ahead of Paul, who gets 20 percent, and former Utah Governor Jon Huntsman Jr., with 11 percent, according to Suffolk University’s tracking poll conducted Jan. 6 and 7.
John E. McGrath, who owns a mortgage company, is voting for Romney, in part because of the candidate’s experience.
When McGrath, 46, started his company in 2010, he had three people. Since then, he has hired seven more, he said in an interview at a Romney rally in Derry. “We’re growing; I’m doing awesome,” said McGrath, who nonetheless is concerned about taxes and government deficits.
Linda Fowler, a government professor at Dartmouth College in Hanover, said Romney appeals to the state’s voters as the “safest” candidate in uncertain times.
“The crisp, I-can-make-decisions style is attractive in this political environment,” Fowler said. “People don’t know what to do.”
Voters are also conscious of their connection to the broader national and global economies and New Hampshire’s exposure to potential financial shocks, Fowler said.
“They well understand there’s an economic crisis in Europe that could bleed into the state,” she said.
New Hampshire dropped 0.4 percent on the Bloomberg Economic Evaluation of States Index over the 12-month period through the third quarter of last year, ranking 19th among the 50 states and the District of Columbia. The index uses data on real estate, jobs, taxes and stock prices to gauge growth.
Though New Hampshire didn’t escape the recession, the downturn has been comparatively mild in the state. The jobless rate never exceeded 6.7 percent, in contrast to the 10 percent level the U.S. reached in October 2009. Mortgage delinquencies peaked at 6.38 percent compared with 9.67 percent nationally.
The state’s average personal income in 2010 was $43,586, the ninth highest in country, and compared with a national average of $39,945, according to the Commerce Department. The poverty rate was 8.3 percent, the lowest in the country, compared with a national rate of 15.3 percent, according to the U.S. Census Bureau.
New Hampshire’s job losses haven’t been as great as in the recession of the early 1990s, when the state suffered along with the rest of the country and Republican insurgent Patrick Buchanan’s strong showing in the 1992 primary jarred incumbent President George H.W. Bush.
In part because of New Hampshire’s proximity to universities in the Boston area, the state nurtured high- technology companies, management and engineering consultancies and advanced manufacturing firms that have been more resilient in the recession, said Ross Gittell, a professor of business and economics at the University of New Hampshire.
Albany Engineered Composites and Safran USA announced plans on Dec. 15 to build a joint facility in Rochester to make jet- engine components that state economic development officials said would produce about 400 local jobs. Switzerland-based Ionbond AG opened a gun-finishing plant in Portsmouth in October that state officials estimated would employ 30 to 40 people.
That doesn’t provide a lot of comfort to a state where residents were used to unemployment rates between 3 percent and 4 percent over much of the past decade.
“New Hampshire has without doubt suffered in the recession,” said John Sununu, a former Republican senator from the state and a Bloomberg contributing editor. “The relatively high unemployment, slow growth in the economy, and slow growth in wages are everyone’s concern.”
For two years, Rich Sparks, 41, has been trying to change jobs. The Nashua resident would like to work in shipping or receiving; instead, he’s employed in the parts department of a Harley Davidson dealership in Massachusetts because he found that state pays higher wages.
“I would actually like to get out of my field, and I haven’t been able to do that for a long time,” Sparks, clad in a plaid button-down shirt bearing the name of his employer, said while waiting to hear Gingrich, a former U.S. House speaker, talk at Salem High School.
“There’s so many people out of work that it’s very tough to land an interview, let alone a job,” Sparks said.
Even before the recession, the migration into New Hampshire that helped buoy the economy and residents’ sense of optimism was slipping, Thibeault said. “Growth has slowed markedly in the last decade,” he said.
New Hampshire’s population rose 6.5 percent from 2000 to 2010, lagging behind the nationwide increase of 9.7 percent, Census Bureau data show.
As with the rest of the country, it is the duration of the hard economic times that’s frustrating the state’s residents, Thibeault said. While job losses in New Hampshire may not have been as severe as elsewhere, the economic climate has been gloomy since the national recession began in December 2007.
“Maybe you don’t paint the house this year, then you don’t paint it the next year, then you don’t paint it the following year and you don’t go on vacation,” Thibeault said. “It wears on you.”
--With assistance from Julie Hirschfeld Davis and Julianna Goldman in Nashua, New Hampshire, and Sandrine Rastello in Manchester, New Hampshire. Editors: Mark McQuillan, Robin Meszoly.
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