Massachusetts economy continuing recovery

BOSTON – Second-quarter data shows that Massachusetts’ economy is bouncing back from a first quarter “temporary reversal of fortune.”
Michael Goodman and Robert Nakosteen wrote in “The Massachusetts Economy in a Time of Transition,” included in the latest edition of the MassBenchmarks Bulletin, a local economy journal, that the economy grew 4.9 percent in the second quarter, following a revised decline of 0.3 percent in the first quarter. That compares with growth of 4.2 percent by the nation in the second quarter.
“There is every indication that the Massachusetts economy is continuing its recovery that is now entering its sixth year. The Commonwealth continues to economically outperform the nation in a number of important respects even if the benefits of that growth premium remain concentrated in the dynamic Greater Boston regional economy,” they wrote.

The MassBenchmarks Current Economic Index estimated that the Massachusetts economy grew during 2013 by 4.1 percent, compared with 2.3 percent experienced nationally.

They wrote that despite the surge in economic activity, negative impacts of federal budget cuts and a slowdown in business investment and international trade will continue to slow its pace.

They wrote that state employment is at historically high levels. Since October 2009, when the state began adding employment following the recession, 240,800 jobs have been created, an increase of 7.6 percent. Between January and September, an estimated 42,200 jobs were created in Massachusetts.
Education and health services have had the largest job gains since October 2009, with more than 72,800 jobs added, followed by professional and business services, with 70,300 jobs added.
Double-digit gains were registered in leisure and hospitality; trade, transportation and utilities, and construction. Both manufacturing and financial activities had employment declines over this period, though of a small magnitude.
The state’s unemployment rate is now slightly higher than the U.S. rate. In September 2014 state unemployment was estimated to be 6.2 percent, compared with the national rate of 5.7 percent.

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International exports, a key driver of economic growth, represent approximately 12 percent of the Massachusetts economy. Exports grew by 10 percent between July 2013 and June 2014.
The report notes that there are a number of important decisions are coming up, including the election of a new governor, and votes on whether or not to develop casinos and index the gas tax to inflation.

“These are important decisions that will have a major impact on state policies and fiscal capacity,” Goodman and Nakosteen wrote. “Thus, in both political and economic terms, the Commonwealth finds itself at a crossroads. However the Massachusetts electorate decides to proceed, it is clear that the next generation of the Bay State’s elected officials and its business and labor leaders will continue to face daunting challenges presented by the striking imbalances between those Massachusetts communities that are again thriving and those that have been largely left behind.”

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