Massachusetts on track for growth

BOSTON – Massachusetts is on track to experience solid growth for the balance of 2014 and through the first quarter of 2015, but “serious challenges remain,” according to the MassBenchmarks editorial board.

The board, in its Benchmarks Bulletin, a local economy journal, wrote that since Massachusetts’ recovery began in summer 2009, employment and economic activity have grown steadily. It also said that consumer spending as measured by state sales tax receipts has been positive in recent quarters.

Another positive: the state’s innovation economy, which is composed of high-technology and knowledge-intensive industries, continues to drive growth, fueled in part by strategic public investments and the commonwealth’s highly educated labor force.

But challenges including high long-term unemployment and job growth concentrated in the Boston region remain.

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“The benefits of this growth have yet to be felt in many areas, especially urban communities commonly referred to as the Gateway Cities. A number of these communities continue to experience difficult economic conditions, including unemployment rates approaching double-digits, stagnant incomes and significant fiscal challenges,” the board wrote.

“Notwithstanding these continued regional imbalances, the economic outlook for the state remains positive. But there continue to be significant risks to the downside. Most notably, the Middle East and Eastern Europe continue to be highly volatile and constitute major sources of geopolitical and economic risk. The Eurozone economy has yet to fully recover and its near-term prospects are not good. And the Chinese economy is growing more slowly than in recent history. All of these developments are exerting downward pressure on global growth and represent serious risks to the global, national and Massachusetts economy,” it continued.

Another concern is Massachusetts’ recent export performance, as exports have not grown as fast as those of the nation as a whole, the board stated.

“The board remains cautiously optimistic about the near-term future of the state economy. The consensus view is that barring unforeseen developments, the Massachusetts economy has enough momentum to continue on a moderate growth track for the foreseeable future,” the board stated.

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