Strong Economic Growth Predicted for Massachusetts in 2014
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Monday, February 03, 2014
Zeke Wright, GoLocalWorcester Contributor
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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