Understanding Maine’s Business Climate

Read the full report | What is Maine’s business climate? That is an age-old question that is usually answered with one anecdote or another. Depending on one’s vantage point, Maine’s business climate could be too hot, too cold or just about right. Unfortunately, creating public policy using anecdotes often leads to a ?shotgun? approach to legislation where a lot of tiny problems get addressed but no one is ever able to put together a view of the bigger picture. A large part of the problem has been a lack of detailed empirical data on Maine’s businesses. Until now.

This study is the first of many studies that will use a powerful new database of Maine’s businesses called the National Establishment Time-Series (NETS) Database. NETS is based on the far-reaching Duns & Bradstreet Marketing Information file that has nationally tracked more than 36.5 million establishments between 1989 and 2007. The file tracks businesses via an assigned DUNS number which is the business equivalent of a personal Social Security number. As such, the NETS database is the most comprehensive establishment-level ?business census? available.

Maine’s state level file contains data for 161,351 commercial, not-for-profit and government establishments between 1989 and 2007. As of 2007, approximately half of those establishments (84,326) still exist with the remainder having either closed, moved out-of-state, or consolidated. These Maine establishments, in 2007, employed 702,028 people and had sales of $66 billion.

Chart 1 shows the history of Maine’s employment from 1989 to 2007. Between 1989 and 2001, employment grew by 21 percent to 747,741 and in 2001 from 616,359 in 1989. However, employment peaked in 2001 and has been on a downward trajectory since. Between 2001 and 2007, employment fell by six percent to 702,028. The timing of this drop in employment is particularly disturbing since during this time-span the rest of the country was enjoying employment growth. Future studies will pin -point the source of this employment decline in order to facilitate the creation of effective public policy solutions.

About the author

J. Scott Moody is the Chief Executive Officer of MHPC. Scott has over 15 years of economic policy research and economic modeling experience from his work with The Tax Foundation and The Heritage Foundation. He has authored and co-authored over 150 published articles and books. He has testified twice before the House Ways and Means Committee of the U.S. Congress.