Maine's generally poor soil, short growing season, and remoteness from industrial and commercial centers have long militated against development and population growth. Lumbering, shipbuilding, and textile production have all enjoyed booms in the past, but changes in technology and competition from other states have always undercut the state's economic position.
In the 1980s, however, Maine successfully transformed a major portion of its economy into trade, service, and finance industries, the greatest growth occurring in and around Portland. Picturesque coastal and island resorts and the promise of tranquil outdoor life hold a strong appeal for tourists, recreational and seasonal visitors, and, increasingly, retirees, and tourism is an important contributor to the state's economy.
Many of Maine's traditional economic activities have experienced difficult times in recent years. Fishing, the state's earliest industry, has declined considerably, although lobsters are still caught in abundance. Lumbering—the first sawmill in America was built in 1623 on the Piscataqua River—dominated industry and the export trade from the days when the white pines provided masts for the British navy, but with the big trees largely exhausted, Maine loggers now produce chiefly pulp for papermaking. The proximity of harbors to forests early encouraged shipbuilding, which reached its peak in the 19th cent. With the disappearance of wooden ships and the related timber trade, commercial activity slackened. Portland, the largest port, now operates far below its substantial capacity, handling chiefly oil for the pipeline to Montreal. Bath Iron Works, which builds warships, remains the state's largest single-site employer.
Manufacturing is still the largest sector in the state's economy. Maine is a leading producer of paper and wood products, which are the most valuable of all manufactures in the state. Food products and transportation equipment are also important, but production of leather goods (especially shoes) has declined. The mineral wealth of the state is considerable. Many varieties of granite, including some superior ornamental types, have been used for construction throughout the nation. Sand and gravel, zinc, and peat are found in addition to stone. However, much of Maine's abundant natural and industrial resources remain undeveloped.
Agriculture has always struggled with adverse soil and climatic conditions. Since the opening of richer farmlands in the West, Maine has tended to concentrate on dairying, poultry raising and egg production, and market gardening for the region. The growing of potatoes, particularly in Aroostook County, was stimulated by the completion of the Aroostook RR in 1894. Blueberries, hay, and apples are other chief crops, and aquaculture is growing in importance.
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