NH economist outlines workforce, housing and childcare constraints on state growth

Phil Sletten, research director at the New Hampshire Fiscal Policy Institute, told the Milford Planning Board on March 18 that New Hampshire's economy faces persistent labor-force constraints driven by demographics, housing costs and childcare affordability.

"Jobs are a key part," Sletten said, describing the state's employment mix and the shift that made health care and social assistance the largest employment sector in recent years. He said manufacturing, accommodation and food service, retail trade and local government are other sizable parts of the state's job base.

Sletten framed several data points for the board: New Hampshire's population is about 1.4 million; the labor-force line he showed centers near 770,000 residents when surveyed as employed or seeking work; and almost one-third of the labor force is older than 54. "So when we reach traditional retirement age, that the labor-force participation rate statistically drops," he said, adding that roughly 200,000 residents will reach traditional retirement ages in the next decade.

The presentation highlighted specific nonemployment reasons captured in recent federal surveys. Using the American Community Survey and the Census Bureau's Household Pulse Survey, Sletten said roughly 29% of the state's population is not in the labor force; among categorized reasons, about 58,000 report illness or disability as the reason, and about 17,300 cite caring for a child not in school or childcare. "That suggests that a lack of access to childcare . . . is a labor-force constraint," he said.

Sletten presented Childcare Aware of America's estimates for sticker costs of care: nearly $32,000 a year for center-based care for a preschooler and an infant, about $17,000 a year for center-based infant care and about $16,000 for a toddler. He noted the state has expanded some subsidies in the current budget but said the published sticker price remains a barrier for many households.

On housing, Sletten showed median home-sale price trends and rental costs. Statewide median home sale prices rose roughly 71% from 2019 to 2024; Hillsborough County was about 67% over the same period. Median two-bedroom rents increased roughly 36% in the most recent year of data he cited, with vacancy rates well below a balanced 5% threshold. "This is a severe constraint in terms of people's ability to buy a house and move here," he said.

Sletten also described population drivers: since 2010 slightly more than half of population growth came from net international migration, with domestic migration making up most of the remainder. He said births minus deaths switched to a negative in about 2016'17, meaning natural increase is no longer contributing to population growth.

Board members asked questions during and after the presentation about which employment categories include public school employees (Sletten said those fall under local government), whether international migration is concentrated in Manchester and Nashua (he said county-level data show Hillsborough County growth is driven primarily by international migration), and how to monitor future traffic or development impacts tied to parcels in town (Sletten deferred to local staff for planning enforcement questions).

Sletten urged the planning board to consult interactive maps and reports available from NHFPI and cited state agencies and national data sources he used. He distributed a sign-up sheet and a QR code for his newsletters and resources.

Why it matters: Planning boards, housing officials and economic-development groups use the state-level constraints Sletten stressed'particularly housing affordability and lack of childcare'when forecasting municipal services, evaluating zoning changes or planning infrastructure that supports workforce growth.

Sletten's slides, he said, are available on the town's Planning Board web page under the March 18 meeting packet.