Report: Maine economy strong, but vulnerable

AUGUSTA — Maine’s gross state product doubled as it rose from the ranks of poor states during the 1980s, but Maine is now more vulnerable to national and international economic forces, a report released Wednesday says.

“Maine has gone from a languid, maturing, low-income economy to a more diversified, vigorous one, rising out of the ranks of `poor’ states,” the State Planning Office report says.

Now in the throes of a regional economic downturn, Maine rode the crest of an economic renaissance during the 1980s, as its economy became more entwined with the nation’s and region’s.

“Many of the forces that carried Maine to its current station have begun to wane,” says the report. “The resurgence of the Northeastern economy that fueled the diversification of Maine’s industrial base seems to have largely run its course.”

During the 1980s, the gross state product — the total value of the output of Maine industries — swelled to $19 billion from $9.4 billion.

Meanwhile, the state’s economy became more dynamic, more diversified and more “internationalized,” says the report, which cites a growth in imports by Maine industries, greater Maine presence in international markets, foreign competition in services and direct foreign investment in Maine.

The rapid proliferation of technology created a growing pool of competitors with Maine businesses. This is now forcing industries to shift away from growth strategies based on low-cost labor and toward more sophisticated and capital-intensive construction, says the report.

It says that in order to remain strong, Maine businesses must work to improve quality and efficiency, while government improves educational opportunities for workers.