Maine has lost about 5,000 jobs since the recession hit in 2001. Economist Charles Colgan’s forecast: “We should get them back by the end of next year.”

Colgan spoke Thursday at the New England Economic Project’s semi-annual session in Westborough, Mass.

A former state economist and professor, Colgan is NEEP’s Maine forecast manager.

Jobs should return in 2004 mostly in health care and business and professional services, a category with everything from lawyers to computer programmers.

“We’re not losing all manufacturing jobs and gaining all retail,” Colgan said in an interview by phone.

His projections don’t contain any jobs created by a possible resort casino in Maine – it’s too speculative, he said. Even if a casino is approved at the polls next month, Colgan said he wouldn’t start including any of the 5,000 or so jobs proponents are touting until developers have building permits in hand.

2003 should close with zero job growth and modest growth in output, the value of goods and services produced in Maine, Colgan said. Output should also pick up a bit next year.

Maine’s economy hasn’t actually gained jobs since 2000.

“The job market is not expanding and absorbing people like new high school and college graduates,” Colgan added.

The forecast for the six New England states resembled those made in recent years, concluding that New England’s economic troubles had bottomed out, but that recovery would lag behind the nation.

The region won’t return to its 2001 peak level of employment until the third quarter of 2005, said NEEP Vice President Ross Gittell, of the University of New Hampshire.

“While there’s still an improvement – it’s the strongest economy in over three years – it’s still a slow-growing economy, particularly in comparison to the late 1990s,” he said.

The biggest change from the last forecast was an improvement in the outlook for Massachusetts. The Bay State, whose recession lasted nine quarters, has growth thanks to a pickup in business spending.

But so far there’s little evidence of an “increase in demand for any of the 150,000 workers laid off between May 2001 and May 2002,” said Michael Goodman of the University of Massachusetts.

Vermont has recovered surprisingly strongly, and leads the region in job recovery rate, said state forecaster Jeffrey Carr of Economic and Policy Resources Inc. But the state was bracing for another round of cuts at IBM’s facility at Essex Junction, set to cut more than 500 jobs effective Friday.

– The Associated Press contributed to this report.
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