Despite strong markets, most contacts report little new construction. The low rate of construction constitutes the main difference between the current boom and the 1980s, and it reflects banks' reluctance to extend credit for speculative construction as well as more caution by everyone. Most contacts predict, however, that continued favorable economic conditions may soon lead to more construction. Nonbank Financial Services Respondents at insurance companies report mixed sales for the third quarter of 1996 compared to the third quarter of 1995. The biggest increases in sales are for variable annuities and mutual funds.
Sales are also strong in international subsidiaries, particularly in Latin America and Asia.
Sales of traditional life insurance are weak. Only two respondents report increases in employment in the third quarter. The rest cite a downward trend in employment which they expect to continue for the rest of the year. NEEP expects regional employment to continue expanding 1.2 to 1.4 percent per year, with modest declines in manufacturing and most of the net job additions in services and trade. New England's unemployment rate is forecast to remain below 5.0 percent over the next several years, although the size of the labor force should begin to expand.