Providence: Economy

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Major Industries and Commercial Activity

Providence is a major industrial, commercial, medical, and financial center for New England with an economy based on manufacturing and service enterprises. The city is a major supplier of jewelry and silverware to the United States and Europe. Providence is home to four multibillion-dollar financial concerns and many smaller ones. Tourism and conventions are emerging industries. As the capital of Rhode Island, Providence supports a number of government-related jobs.

Items and goods produced: jewelry, silverware, and related products; electrical equipment, textiles, transportation equipment, fabricated metals, rubber and plastic goods, supplies for the Department of Defense and federal government, machinery, instruments, primary metals

Incentive Programs—New and Existing Companies

The Rhode Island Economic Development Corporation (RIEDC) serves as a one-stop clearing house for a variety of financing plans and financing agencies to assist enterprises in all phases of economic development. RIEDC is making it easier, faster and more efficient for businesses to access such tools as: financing, permitting and job training assistance; real estate and site location analysis; export and government contract assistance; enterprise zone counseling; information on economic issues and tax incentives; and creative problem-solving.

Local programs

The support services of the Providence Department of Planning and Development include research and feasibility studies; site planning and design review; help in obtaining low-cost financing and other incentives, through federal, state, city and private programs. The Providence Economic Development Corporation administers the Providence Economic Development corporation Revolving Loan Program, with a choice of rates pegged below the prime rate of interest for a period of 10 years. The Providence Neighborhood Business District Program oversees infrastructure improvements; it also offers market research and planning services for new and existing businesses, and grants for related improvements.

State programs

Rhode Island provides a corporate income tax rate reduction for those firms increasing employment. Manufacturers and traded service firms paying above average wages or investing significantly in work training are able to take a ten percent credit on purchased or leased equipment. Businesses may also take a significant credit for expenses for approved job training programs. The Jobs Development Act permanently reduced companies' corporate income tax rate. Companies with 100 employees or more receive a quarter-point reduction for every 50 full-time jobs created. Companies with fewer than 100 employees will receive a quarter-point reduction for every 10 jobs created during a three-year period

Rhode Island offers tax credits for investment, new employment, interest, and donations made in areas designated as Enterprise Zones. Two of those zones are situated in the city of Providence. Many enterprise zone benefits extend to those who develop any of the state's designated historic industrial mill structures or historic preservation areas. Other sectors which have special tax incentives are the financial services, telecommunications, and insurance industries.

Job training programs

Rhode Island has job training tax credits equal to half of a company's training expenditure, and job training grants that can be customized to the company's needs. There are also tax credits for apprenticeship programs and adult education classes. Providence/Cranston Job Training, through netWORKri centers helps disadvantaged workers find jobs, provides job search skills and job training, and has a summer youth employment program.

Development Projects

Capital Center, the downtown area of Providence, is experiencing a residential building boom, with $1.8 billion in projects either under construction or in the planning stages as of 2005. A new $80 million addition to the Westin hotel broke ground in 2005, consisting of a 31-story tower with 200 hotel rooms and 100 luxury condominiums. The Hotel Dolce Villa boutique hotel—formerly a jewelry manufacturing company—opened in 2005 after a $2 million make-over. Currently under construction is GTECH Holding Corporation's new 12-story headquarters in Capital Center, downtown Providence, the first new corporate office building to be constructed there since 1988. Waterplace, also begun in 2005, is a $100 million, two-tower condominium project, and will be one of the tallest buildings in Waterplace Park. Capitol Cove, a project also in Capital Center, will consist of 255 high-end apartments in two towers. In 2005, Roger Williams University put its Providence branch up for sale for the booming redevelopment market.

Economic Development Information: Rhode Island Economic Development Corporation, One West Exchange Street, Providence, RI 02903; telephone (401)222-2601; fax (401)222-2102. Greater Providence Chamber of Commerce, 30 Exchange Terrace, Providence, RI 02903, telephone: (401)521-5000; fax (401)751-2434, email chamber@provchamber.com. City of Providence Department of Planning and Development, 400 Westminster St., Providence, RI 02903; telephone (401)351-4300; email planning@ids.net

Commercial Shipping

Excellent transportation facilities, including the Port of Providence, New England's second largest deepwater port and a Foreign Trade Zone, make Providence a major industrial center. The principal waterborne commodities handled at the port are petroleum products, cement, scrap metal, lumber, automobiles, and conventional and containerized general cargo. Theodore Francis Green State Airport, with a new 323,000-square-foot, multilevel terminal, has 15 gates and has incorporated a cargo development facility. Direct trucking service is available to every state, Mexico and most of Canada on a multimillion-dollar highway system. Daily rail service to Rhode Island industrial sites is provided by the Providence & Worcester Railroad, which allows access to the entire United States and Canadian rail systems.

Labor Force and Employment Outlook

Rhode Island boasts the highest number of trained workers per square mile in the country. The labor force is described as mature, skilled in diverse areas, educated, efficient, and offering high productivity at reasonable wage levels. The fastest-growing occupational groups are professional and technical workers in new and varied industries; opportunities are expanding in the service and financial sectors, as well as in hospitality. Providence looks forward to continued expansion of technological fields.

The following is a summary of data regarding the Providence metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 581,300

Number of workers employed in . . . natural resources and mining: 300

construction: 25,600

manufacturing: 75,700

trade, transportation and utilities: 102,700

information: 11,700

financial activities: 37,200

professional and business services: 60,900

educational and health services: 106,900

leisure and hospitality: 58,900

other services: 26,500

government: 74,900

Average hourly earnings of production workers employed in manufacturing: $13.37 (2004)

Unemployment rate: 4.3% (May 2005)

Cost of Living

The following is a summary of data regarding several key cost of living factors in the Providence area.

2004 (3rd Quarter) ACCRA Average House Price: $472,818

2004 (3rd Quarter) ACCRA Cost of Living Index: 127.7 (U.S. average = 100.0)

State income tax rate: 3.75% to 9.9%, applied only to the Federal Adjusted Gross Income, minus deductions

State sales tax rate: 7%

Local income tax rate: None

Local sales tax rate: None

Property tax rate: $29.65 per $1,000 of assessed valuation for residential properties, $37.00 for commercial properties.

Economic Information: Rhode Island Economic Development Corporation, One West Exchange St., Providence, RI 02903; telephone (401)222-2601; fax (401)222-2102