Mass. Sees Largest Fall in National Business Ranking
Tuesday, July 17, 2012
The news outlet ranks states each year based on several key factors, including access to capital, workforce, cost of doing business, economy, education, quality of life, technology and innovation, business friendliness, and cost of living.
The Commonwealth did well in previous years, earning a top five stop two years ago and remaining highly ranked last year. This year, however, was not as kind as the state's ranking fell drastically.
Compared to last year, the most drastic difference was seen in the economy and business friendliness categories, which went from 15 to 21 and 15 to 29, respectively.
The state’s workforce grade also slipped one spot, as did quality of life. The cost of business, a crucial factor, also fell to 49th place, with only Hawaii having a worse figure.
Technology and innovation also dropped to seventh place.
While these figures were all bad news for Mass, Governor Deval Patrick said that the state is doing the best it can to keep business in Massachusetts.
“Over the last several years, Massachusetts has cut corporate taxes and burdensome regulations, reduced health care and energy costs and continued record investments in education, innovation and infrastructure,” Patrick said.
The governor cited the state’s lower than average unemployment rate – a rate which is lower than many of the states listed in CNBC’s top ten – as well as six straight months of job growth.
While many figures dropped for the state, access to capital was one of two figures to increase and rose from the 2nd spot in the nation to the first. Massachusetts leads the country in giving its businesses a fighting chance.
“These rankings confirmed our strengths in access to capital, education and technology and innovation,” Gov. Patrick said. “We will build off of them and continue to advance our proven growth strategy until the Commonwealth’s economic recovery is complete.”
While the state’s education ranking remained high and rose from last year’s spot of 4th, Mass received the highest ranking for education in 2010 and 2009.
Other figures that the site listed as influential included the state’s per capita GDP, which sits at $52, 915. Massachusetts is home to eleven S&P companies. Gasoline taxes and fees are at 23.5 cents. The state also has a stable bond rating at Aa1 and high average SAT scores: 1549/2400. The Commonwealth’s high education rating is also attributable to its high number of degree granting institutions, of which it has 124.
A journal of the state’s economy, MassBenchmarks, says that while the state has made significant recoveries after the recession, in the last year “the Massachusetts economy experienced a significant slowdown.”
According to the report, overall, national gross domestic product grew by 1.6 percent in 2011, whereas the state grew by 1.8 percent. While the state’s unemployment rate remained well below the national rate, employment grew very slowly.
The state’s housing market has proven to be somewhat stabilized, but the report says the state’s growth is “lackluster.”
MassBenchmarks says that this slow growth is national: “This growth slowdown has been taking place in a national and global setting that is fraught with risks, virtually all of them on the downside. domestically, the federal government budget is under great pressure.”
“We estimate that job losses resulting from the currently mandated federal budget cuts will reach better than 52,000 over the ten years beginning in 2013,” the report reads. “The pattern of these job losses strikes at the heart of the state’s innovation economy. In addition to the 13,000+ government and military job losses, the two largest private sector employment cuts are estimated to be in Professional and technical services, with a loss of nearly 10,000…”
CNBC posited that the state’s downturn in last year’s report was partially due to former Massachusetts governor, Mitt Romney.
To this end, President and CEO of the Worcester Regional Chamber of Commerce, Dick Kennedy said, “Things are continuing to plague us are the costs of doing business. We’re in the middle of the pack which surprised me. I think some are catching up and catching on.”
While Kennedy said that Romney was a business minded, he added, “The sand is shifting, but we’ll still continue to see the issues we always do. There’s no benefit to a sitting government that doesn’t encourage additional work.”
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