Portland area fuels Maine's economy; A major portion of the state's economic base has shifted from rural to urban, an analysis finds.

More than $2 out of every $5 produced by the Maine economy was generated in the Portland region.

Likewise with income: Of every $5 earned in Maine, $2 comes from a Portland-area paycheck. And two of every five jobs is with a company in the region.

Portland's influence on the Maine economy is not just strong - it's stronger than most other similarly situated cities, according to an analysis being released today by the Portland Community Chamber.

''Looking Out for Portland and the Region'' indicates that Portland accounts for nearly 43 percent of the gross state product, about 44 percent of Maine's total personal income and about 42 percent of the jobs in the state. In each case, those figures on the area's impact on the state are more than three times the average of 33 other regions that the report uses as benchmarks to assess Portland's standing.

''You don't want to come across as (saying) 'We're so important,' but it's telling what this region means to the state's economy,'' said Godfrey Wood, chief executive officer of the Portland Regional Chamber. ''If we're not doing well, the state's going to have some problems as well.''

Wood said the 110-page analysis is intended to be a catalog of the region's assets and a portrait of its economy. But it will also be useful when chamber officials call on state legislators about issues that are important to businesses in the region - they can point out that something that has an impact on Portland-area businesses can ripple through to Presque Isle.

''I don't think it's as simple as taxes are too high and incomes are too low,'' Wood said, but ''there are very different things that should be done in this region than should be done in Aroostook County or Washington County.''

The report looked at dozens of economic and societal indicators for the Portland region - which, according to the Census Bureau, stretches from Freeport to Kennebunkport -æand compared them with the measures for regions and cities of similar size that are also primarily surrounded by rural areas. Some examples include Manchester, N.H., Burlington, Vt., Savannah, Ga., Boise, Idaho, and Santa Fe, N.M.

The report found that the region fares well in quality of life measures, such as a high concentration of recreational and cultural amenities, a low crime rate, higher incomes, less poverty and a greater proportion of residents with bachelor degrees than the average of the comparison regions and cities.

It also found an economy putting in a lackluster performance over the past five years and a region where taxes, the cost of housing and health care, and the overall cost of living are high.

Wood said the region's assets are impressive, but it lacks an ''identifier,'' such as Microsoft for the Seattle area or insurance companies for Hartford.

''We do tend to have a diverse, but I would call it shallow, business base here,'' he said.

To Charles Colgan, an economist and professor at the Muskie School of Public Service at the University of Southern Maine, the report shows an economy in transition, although many residents may not be aware that it has been changing.

''The general picture of Maine and its economy still rests on very rural, natural resource (-based) picture - which remains valid for much of Maine,'' Colgan said. ''But overall, the transfer to a more urban-related economy has been going on ... for the last 30 years, but it's not widely appreciated.''

Colgan said that reflects the national economy, where job growth has been in service-sector jobs such as retailing, information technology, health care and financial services. Since those sectors are growing nationally, that's where the greatest opportunity is for job growth in Maine, and those are industries that are usually concentrated in urban areas.

''It's not necessarily something that people are comfortable with, but they better get comfortable,'' he said.

''Much of our traditional manufacturing has been in the rural areas and those have been hardest-hit,'' said Laurie Lachance, a former state economist and now president and chief executive officer of the Maine Development Foundation. ''The ones that have been growing are in this (Portland) region.''

Lachance said Wood and other chamber officials would be smart to share the findings with those who shape policy in Maine. ''There certainly needs to be some recognition that you don't kill the goose that lays the golden eggs,'' she said.

However, Lachance said, the report shouldn't be used to justify steering most of the state's economic development resources to the Portland region - or away, based on the sense that the city and region don't need more help.

''We need to make sure that whatever choices we make don't somehow hobble'' the region, she said. ''That doesn't mean you just ignore the rest of the state, however.''

Lachance said some of Portland's regional strength is built on the infrastructure that businesses need, such as easy access to interstate highways, a busy airport and the state's biggest port. Growth also breeds growth to a certain extent: A business thinking of expanding into Maine is likely to look for a place where employees' spouses can easily find work, and that's the Portland region because jobs are more plentiful and diverse.

But, she said, businesses that are already here may look outside the Portland region for expansion. For instance, L.L. Bean is headquartered in Freeport, but some call centers are found in Bangor, Waterville and Oxford Hills, places where costs are lower and finding workers is less competitive.

Still, some businesses just need or want to be in or near the state's largest city, Lachance said, and ''all the incentives (to locate elsewhere) aren't going to help. We don't want to use our limited state resources to fight good business decisions.''

Wood said he worries that the state sometimes does just that, and he hopes the report will encourage officials to focus on getting a business to Maine, regardless of where it wants to go in the state.

''I've kind of heard stories of people looking to move to the state of Maine and wanting to be around Portland and people are encouraging them to go elsewhere,'' he said. ''One of the rules of sales is to sell people what they want to buy, not what you want them to buy.''

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com