Providence-Fall River-Warwick, Rhode Island-Massachusetts Nonagricultural employment in the Providence-Fall River-Warwick metropolitan statistical area, which averaged 534,200 jobs for the 12-month period ending September 2002, was flat compared with the same period in 2001. This also represents little change from the 2000 and 2001 annual average levels of employment following 3 previous years of increases that averaged 9,000 jobs. Construction and manufacturing employment continued to decline, losing 4,300 jobs during the past year; however, these losses were almost completely offset by a similar increase in service-producing jobs, particularly in consumer and healthcare services. The Providence metropolitan area has in recent years benefited from in-migration. In-migration is driven by the number of financial service and pharmaceutical companies moving to and expanding in Rhode Island as well as workers from eastern Massachusetts seeking less expensive housing in Rhode Island. Employment growth in the Providence area will be tempered somewhat by a lack of diversification in its older industrial base; however, employment in trade and other service industries will continue to grow as in-migration continues, regional expansions target Rhode Island, and income growth continues to strengthen. The average unemployment rate in the Providence area for the 12-month period ending September 2002 was 4.8 percent, up from 4.6 percent in the previous 12-month period. The Providence area has increasingly been able to attract a significant number of biotechnology and pharmaceutical firms searching for land and less expensive business costs than in the Boston area. Amgen/Immunex is building a plant in West Greenwich and has plans to construct another one. Amgen/Immunex employment figures, now at approximately 400 jobs, may increase to approximately 1,900 jobs in 3 years. In addition Dow Chemical plans to build a 200,000-square-foot facility in Smithfield for research and development and contract manufacturing for other smaller pharmaceutical companies in the area. This expansion of the pharmaceutical industry in the Providence area will foster the diversity of the industrial base and create needed higher-paying jobs. Single-family construction in the Providence area was on a generally upward trend during the 1990s, peaking with approximately 3,000 homes issued building permits in 1999. In 2000 and 2001 single-family permit activity averaged 2,775 homes annually. During the first 9 months of 2002 permits were issued for 1,778 homes. Because the Providence metropolitan area comprises approximately 91 percent of the population of Rhode Island, statewide sales and price data illustrate the current market trends. At approximately 2,500 units during the second quarter of 2002, sales remained nearly flat compared with the same period in 2001. However, the median sales price increased significantly to $184,000. Sales of condominium units for the second quarter declined approximately 7 percent to approximately 350 units, but the median sales price increased to $147,900 compared with the second quarter of 2001. Condominium demand has been so strong that several new developments are being planned. This is a significant turnaround from the overbuilt condominium market during the late 1980s and early 1990s. Supply is still not meeting demand in the area; however, the sluggish economy should contribute to holding down price increases through the end of the year. The rental market is very strong and stable. During the recent economic downturn vacancy rates have increased slightly; however, the rise was primarily at the higher end of the market. This segment of the market, characterized by newer, well-managed, competitive properties, has a vacancy rate of approximately 3 percent or less. During the late 1990s the Providence economy was prospering with strong job growth, increased demand, and few new additions to the inventory. These tight market conditions created tremendous pressure on rents. Although job growth has slowed, rental demand is still strong. The lower end of the market has very few vacancies and very tight conditions. Developers are responding to the tight market conditions and demand at the higher rent levels. For example, in 2001 a 330-unit multifamily development broke ground near the new Providence Place Mall. Proposed rents are estimated to average close to $2,000 monthly. Another development in the planning stages proposes more than 800 units of apartments and condominiums in 7 buildings in the Capital Center area. The apartments would rent for $1,800 to $3,000, and the condominiums would be priced at an average of $600,000. The $200 million project would be one of the largest residential developments in the city of Providence.

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