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Strong Economic Growth Predicted for Massachusetts in 2014

Monday, February 03, 2014

 

Massachusetts' economic growth outpaced the national economy by 70 percent in the fourth quarter of 2013, and the state's forecast for this year looks similarly rosy by one estimate.

The most recently released current economic index by the University of Massachusetts Donahue Institute is projecting a continuation of solid growth in the first half of 2014, with a 5 percent annual growth rate in the state's real gross domestic product in the first quarter and a 4.7 percent rate in the second quarter.

Last year's state GDP growth (5.5 percent in the fourth quarter) was spurred by gains in employment, income, and consumer spending. In the last quarter of the year, employment in the Commonwealth grew at a 3 percent annual rate (equaling 25,000 net new jobs) while wage and salary income grew at a 12.3 percent annual rate as estimated by withholding tax revenues.

What's driving the positive forecast ahead?

“It's hard to know in particular. I think it's the same forces here and in the nation, and we just had a good quarter,” said Alan Clayton-Matthews, a senior contributing editor at MassBenchmarks and an associate professor at the School of Public Policy and Urban Affairs at Northeastern University who sees economic improvement nationally and abroad this year.

“We've had four years of recovery (with) moderate job growth,” Clayton-Matthews said. “At the same time, stock markets are at the same levels (as before the recession) and home prices have been rising.”

That combination has lifted household wealth. “We're now in a stage of the economy where consumers are opening their wallets,” Clayton-Matthews said, allowing businesses to feel more bullish.

Difficulties remain with long-term unemployed, youth, and unskilled workers

But as the national conversation turns to the plight of the long-term unemployed — those out of work for six months or more — the situation remains similarly dire in Massachusetts. At 7 percent, the state's official unemployment is slightly above the national average. Throughout 2013, the average unemployment rate for persons under 25 years old was 15.8 percent; and for those with less than a high school education it was 20.1 percent.

Nationally, the “U6” unemployment rate — which includes part-time workers who would work full-time given the chance and jobless individuals who have simply stopped looking — was nearly twice the official rate throughout 2013.

“I think we're seeing the real unemployment rate and the U6 decline this year, but it's hard to say how quickly,” Clayton-Matthews said.

Should larger numbers of unemployed workers return to the job market, “we could see the unemployment rate go up and that would still mean a strengthening labor market.” Or, the improving economy could herald a big drop in unemployment figures, “but that doesn't mean the long-term unemployed are finding jobs,” he continued.

A jobs forecast last month by Moody's Analytics put the Bay State near the bottom nationally in predicted job growth this coming year. But Moody's also lists Massachusetts as just one of 10 states to be actively expanding following the recent recession, while the remainder are still listed as recovering.

Clayton-Matthews pointed to the state's “high-knowledge sectors” as a cause for the Commonwealth's better-than-average recovery.

State boasts high-knowledge and good infrastructure

Susan Houston, executive director of the Massachusetts Alliance for Economic Development, a statewide private partnership of business, industry, and government, said her organization had seen a marked increase in recent business interest.

“We have a special lens I think in looking at the economy, because we work with companies looking to expand or move into the state,” Houston said. One benchmark is the number of companies expressing an interest and contacting the alliance. “Just in January we had six companies come to us looking for an increase in space.”

Those companies expanding or moving into Massachusetts included Takeda Pharmaceuticals, which recently broke ground on a new 250,000-square-foot facility in Cambridge; Cohealo, a hospital equipment sharing service, that is moving its headquarters from Boca Raton, Fla. to Boston in March; robotics firm Hydroid which is building a new 40,000-square-foot facility in Pocasset; and Menck Windows which recently leased 75,000 square feet of manufacturing space in Chicopee.

“In what we've seen just for January, it's about a 10 percent uptick in the number of companies that have come to us. ... So time will tell,” Houston said.

She said positives marketed in the state included its diverse economic base, a highly trained and stable workforce, and the state's academic institutions. “And we can accommodate companies at different stages of growth, and different stages (of their business process) as well.”

“Massachusetts has one of the strongest recoveries in the nation, thanks to continued robust business investment and exports,” according to Moody's current assessment. “Job gains are in well-paying technology industries and education/health services. The state’s very high incomes and good credit quality are supporting consumer spending.”

In a metro by metro breakdown of the state, Boston and Cambridge are in expansion mode while the rest including Worcester are still listed as recovering.

The metropolitan Worcester area mirrors the national housing price trend, although last year's improvement occurred more slowly. Growth according to Moody's is modestly below the national rate, but strengths in the national market include an above-average share of high-tech employment, many colleges and universities and a strong concentration in healthcare, and low employment volatility.

 

Related Slideshow: Central MA Unemployment Rates #72 - #1

Here are the unemployment statistics for each town in Central Mass, ranked from least to most-

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#72

Harvard

Unemployment rate, August 2013: 4.4%

Unemployed: 140

Employed: 3,059

Total workforce: 3,199

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#71

Hopkinton

Unemployment rate, August 2013: 4.7%

Unemployed: 369

Employed: 7,523

Total workforce: 7,892

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#69 (Tie)

Berlin

Unemployment rate, August 2013: 4.9%

Unemployed: 79

Employed: 1,520

Total workforce: 1,599

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#69 (Tie)

Hopedale

Unemployment rate, August 2013: 4.9%

Unemployed: 159

Employed: 3,074

Total workforce: 3,233

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#67 (Tie)

Bolton

Unemployment rate, August 2013: 5.1%

Unemployed: 147

Employed: 2,733

Total workforce: 2,880

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#67 (Tie)

Southborough

Unemployment rate, August 2013: 5.1%

Unemployed: 257

Employed: 4,813

Total workforce: 5,070

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#66

Marlborough

Unemployment rate, August 2013: 5.5%

Unemployed: 1,283

Employed: 21,909

Total workforce: 23,192

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#65

Northborough

Unemployment rate, August 2013: 5.6%

Unemployed: 432

Employed: 7,259

Total workforce: 7,691

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#62 (Tie)

Mendon

Unemployment rate, August 2013: 5.7%

Unemployed: 196

Employed: 3,218

Total workforce: 3,414

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#62 (Tie)

Princeton

Unemployment rate, August 2013: 5.7%

Unemployed: 107

Employed: 1,764

Total workforce: 1,871

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#62 (Tie)

Topsfield

Unemployment rate, August 2013: 5.7%

Unemployed: 176

Employed: 2,910

Total workforce: 3,086

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#61

Boylston

Unemployment rate, August 2013: 5.8%

Unemployed: 134

Employed: 2,167

Total workforce: 2,301

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#58 (Tie)

Shrewsbury

Unemployment rate, August 2013: 5.9%

Unemployed: 1,084

Employed: 17,152

Total workforce: 18,236

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#58 (Tie)

Sterling

Unemployment rate, August 2013: 5.9%

Unemployed: 256

Employed: 4,112

Total workforce: 4,368

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#58 (Tie)

Westborough

Unemployment rate, August 2013: 5.9%

Unemployed: 525

Employed: 8,415

Total workforce: 8,940

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#56 (Tie)

Sturbridge

Unemployment rate, August 2013: 6.0%

Unemployed: 306

Employed: 4,763

Total workforce: 5,069

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#56 (Tie)

Upton

Unemployment rate, August 2013: 6.0%

Unemployed: 241

Employed: 3,752

Total workforce: 3,993

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#53 (Tie)

Douglas

Unemployment rate, August 2013: 6.1%

Unemployed: 290

Employed: 4,469

Total workforce: 4,759

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#53 (Tie)

Hudson

Unemployment rate, August 2013: 6.1%

Unemployed: 696

Employed: 10,740

Total workforce: 11,436

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#53 (Tie)

Milford

Unemployment rate, August 2013: 6.1%

Unemployed: 954

Employed: 14,670

Total workforce: 15,624

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#51 (Tie)

Oakham

Unemployment rate, August 2013: 6.3%

Unemployed: 65

Employed: 973

Total workforce: 1,038

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#51 (Tie)

Sutton

Unemployment rate, August 2013: 6.3%

Unemployed: 302

Employed: 4,500

Total workforce: 4,802

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#48 (Tie)

Holden

Unemployment rate, August 2013: 6.4%

Unemployed: 576

Employed: 8,430

Total workforce: 9,006

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#48 (Tie)

Paxton

Unemployment rate, August 2013: 6.4%

Unemployed: 158

Employed: 2,327

Total workforce: 2,485

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#48 (Tie)

Shirley

Unemployment rate, August 2013: 6.4%

Unemployed: 223

Employed: 3,269

Total workforce: 3,492

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#46 (Tie)

Ayer

Unemployment rate, August 2013: 6.5%

Unemployed: 283

Employed: 4,100

Total workforce: 4,383

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#46 (Tie)

Hardwick

Unemployment rate, August 2013: 6.5%

Unemployed: 94

Employed: 1,359

Total workforce: 1,453

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#45

Grafton

Unemployment rate, August 2013: 6.6%

Unemployed: 635

Employed: 9,043

Total workforce: 9,678

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#42 (Tie)

Hubbardston

Unemployment rate, August 2013: 6.7%

Unemployed: 163

Employed: 2,255

Total workforce: 2,418

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#42 (Tie)

Millbury

Unemployment rate, August 2013: 6.7%

Unemployed: 489

Employed: 6,787

Total workforce: 7,276

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#42 (Tie)

Petersham

Unemployment rate, August 2013: 6.7%

Unemployed: 43

Employed: 596

Total workforce: 639

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#40 (Tie)

Lancaster

Unemployment rate, August 2013: 6.8%

Unemployed: 240

Employed: 3,281

Total workforce: 3,521

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#40 (Tie)

Townsend

Unemployment rate, August 2013: 6.8%

Unemployed: 346

Employed: 4,738

Total workforce: 5,084

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#38 (Tie)

Charlton

Unemployment rate, August 2013: 7.0%

Unemployed: 491

Employed: 6,483

Total workforce: 6,974

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#38 (Tie)

Dudley

Unemployment rate, August 2013: 7.0%

Unemployed: 431

Employed: 5,696

Total workforce: 6,127

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#33 (Tie)

Auburn

Unemployment rate, August 2013: 7.1%

Unemployed: 613

Employed: 8,024

Total workforce: 8,637

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#33 (Tie)

East Brookfield

Unemployment rate, August 2013: 7.1%

Unemployed: 86

Employed: 1,129

Total workforce: 1,215

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#33 (Tie)

Holland

Unemployment rate, August 2013: 7.1%

Unemployed: 99

Employed: 1,291

Total workforce: 1,390

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#33 (Tie)

New Braintree

Unemployment rate, August 2013: 7.1%

Unemployed: 40

Employed: 524

Total workforce: 564

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#33 (Tie)

Rutland

Unemployment rate, August 2013: 7.1%

Unemployed: 313

Employed: 4,081

Total workforce: 4,394

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#32

Oxford

Unemployment rate, August 2013: 7.2%

Unemployed: 548

Employed: 7,032

Total workforce: 7,580

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#31

Uxbridge

Unemployment rate, August 2013: 7.3%

Unemployed: 536

Employed: 6,784

Total workforce: 7,320

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#30

Leicester

Unemployment rate, August 2013: 7.5%

Unemployed: 450

Employed: 5,565

Total workforce: 6,015

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#27 (Tie)

Ashburnham

Unemployment rate, August 2013: 7.6%

Unemployed: 236

Employed: 2,865

Total workforce: 3,101

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#27 (Tie)

Lunenburg

Unemployment rate, August 2013: 7.6%

Unemployed: 398

Employed: 4,850

Total workforce: 5,248

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#27 (Tie)

Northbridge

Unemployment rate, August 2013: 7.6%

Unemployed: 608

Employed: 7,383

Total workforce: 7,991

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#26

Spencer

Unemployment rate, August 2013: 7.7%

Unemployed: 492

Employed: 5,935

Total workforce: 6,427

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#24 (Tie)

Ware

Unemployment rate, August 2013: 7.9%

Unemployed: 394

Employed: 4,611

Total workforce: 5,005

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#24 (Tie)

West Boylston

Unemployment rate, August 2013: 7.9%

Unemployed: 259

Employed: 3,035

Total workforce: 3,294

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#21 (Tie)

Brimfield

Unemployment rate, August 2013: 8.0%

Unemployed: 152

Employed: 1,745

Total workforce: 1,897

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#21 (Tie)

Templeton

Unemployment rate, August 2013: 8.0%

Unemployed: 305

Employed: 3,520

Total workforce: 3,825

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#21 (Tie)

Westminster

Unemployment rate, August 2013: 8.0%

Unemployed: 297

Employed: 3,417

Total workforce: 3,714

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#19 (Tie)

North Brookfield

Unemployment rate, August 2013: 8.1%

Unemployed: 195

Employed: 2,224

Total workforce: 2,419

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#19 (Tie)

Palmer

Unemployment rate, August 2013: 8.1%

Unemployed: 508

Employed: 5,772

Total workforce: 6,280

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#18

Warren

Unemployment rate, August 2013: 8.4%

Unemployed: 209

Employed: 2,271

Total workforce: 2,480

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#17

West Brookfield

Unemployment rate, August 2013: 8.6%

Unemployed: 155

Employed: 1,652

Total workforce: 1,807

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#15 (Tie)

Royalston

Unemployment rate, August 2013: 8.7%

Unemployed: 52

Employed: 547

Total workforce: 599

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#15 (Tie)

Webster

Unemployment rate, August 2013: 8.7%

Unemployed: 723

Employed: 7,569

Total workforce: 8,292

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#13 (Tie)

Brookfield

Unemployment rate, August 2013: 8.8%

Unemployed: 163

Employed: 1,695

Total workforce: 1,858

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#13 (Tie)

Millville

Unemployment rate, August 2013: 8.8%

Unemployed: 158

Employed: 1,642

Total workforce: 1,800

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#11 (Tie)

Barre

Unemployment rate, August 2013: 8.9%

Unemployed: 244

Employed: 2,510

Total workforce: 2,754

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#11 (Tie)

Worcester

Unemployment rate, August 2013: 8.9%

Unemployed: 7,562

Employed: 77,653

Total workforce: 85,215

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#9 (Tie)

Ashby

Unemployment rate, August 2013: 9.0%

Unemployed: 149

Employed: 1,503

Total workforce: 1,652

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#9 (Tie)

Orange

Unemployment rate, August 2013: 9.0%

Unemployed: 332

Employed: 3,356

Total workforce: 3,688

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#7 (Tie)

Blackstone

Unemployment rate, August 2013: 9.2%

Unemployed: 488

Employed: 4,824

Total workforce: 5,312

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#7 (Tie)

Clinton

Unemployment rate, August 2013: 9.2%

Unemployed: 676

Employed: 6,652

Total workforce: 7,328

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#6

Winchendon

Unemployment rate, August 2013: 9.3%

Unemployed: 453

Employed: 4,407

Total workforce: 4,860

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#5

Leominster

Unemployment rate, August 2013: 9.6%

Unemployed: 1,937

Employed: 18,141

Total workforce: 20,078

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#3 (Tie)

Southbridge

Unemployment rate, August 2013: 9.9%

Unemployed: 787

Employed: 7,127

Total workforce: 7,914

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#3 (Tie)

Gardner

Unemployment rate, August 2013: 9.9%

Unemployed: 934

Employed: 8,514

Total workforce: 9,448

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#2

Fitchburg

Unemployment rate, August 2013: 10.0%

Unemployed: 1,829

Employed: 16,435

Total workforce: 7,914

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#1

Athol

Unemployment rate, August 2013: 10.5%

Unemployed: 543

Employed: 4,647

Total workforce: 5,190

 
 

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Comments:

Iron Mike Farquhar

Want our state's economy to rebound?

Simple! Put BOTH the legislature and Deval on furlough for the rest of the year!




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