Maine’s economic forecasting committee revised estimates of several key economic indicators for 2022 in its latest report, with major upward revisions to inflation, corporate profits, and government surpluses.
In a press release, the administration of Gov. Janet Mills attempted to draw attention to the $282 million surplus in taxpayer money held by the government.
Mills said in a statement that she wanted to work with the Legislature to spend the surplus taxpayer cash to help Mainers deal with record high home heating prices.
“I remain deeply concerned about the impact that high energy prices – from home heating oil to electricity – are having on Maine people,” said Mills.
Although Mills’ office touted the surplus as a sign of the State’s health, the economists’ report shows troubling trends on the horizon for Maine’s economy.
“[T]he CEFC is concerned about high rates of inflation and associated interest rate hikes. High heating oil prices during the coming winter season will present challenges for Maine households,” the report states. “These high energy costs, combined with high overall inflation, geopolitical upheaval, and tight labor markets were among the key risks to continued economic growth that the CEFC considered as it revised its forecasts.”
The Consumer Price Index (CPI) was revised up from 5.0 percent to 8.3 percent, reflecting higher than expected price inflation across Maine in 2022. The committee also revised upward its predictions for inflation in subsequent years.
At the same time, corporate profits surged. The committee revised its forecast for corporate profits from 4.0 percent to 10.2 percent for 2022.
The forecast sees modest increases in personal incomes in the coming years, but noted that it expected high rates of inflation will take several years to abate.
Although the economists predict employment will have increased by 2.5 percent in 2022, they see employment growth shrinking to less than 1 percent in the following two years before leveling off in 2026 and 2027.