Forecasters meeting in Boston Thursday morning are predicting slow to moderate economic growth in Massachusetts and the region in the coming months and years.
While the Massachusetts economy has been expanding since the summer of 2009 — the jobless rate here has fallen from 8.7 percent in December 2009 to 6.3 percent last month — the pace of growth has slowed and the state has regained only 81,500 of the 143,000 jobs lost in the recession, according to forecasters.
According to a presentation drafted for the New England Economic Project by Northeastern University economics professor Alan Clayton-Matthews, payroll employment is projected to grow 1.2 percent in 2012 and 1 percent in 2013, with 1.5 percent rates of growth estimated in 2014 and 2015. However, the state’s unemployment rate is expected to rise to 7 percent by mid-2013 because workers who had given up on finding jobs will be lured back into the market by the brighter prospects of finding employment.
While predicting a jobless rate of just over 5 percent by the end of 2016 and estimating the residential housing market in Massachusetts “may finally be at its bottom,” the Massachusetts forecast hinges on volatile macroeconomic factors such as post-election compromises in Washington on fiscal issues and U.S. economic demand offsetting the economic crisis in Europe and the slowing Chinese economy. The project’s regional forecast also identifies the “foreclosure wave at home” as a threat to economic growth.
Clayton-Matthews’ forecast predicts that growth in income and output in Massachusetts will follow the employment growth profile, with real Gross State Product growth averaging 2.5 percent over the five-year forecast period and nominal wage and salary growth averaging 5.8 percent over that same period.
However, economists planned Thursday to emphasize the importance of matching worker skills with the needs of growing employment sectors, saying the speed of the recovery depends on success in that area. In addition, the area’s aging workforce underscores the need for a new generation of skilled workers.
On the housing front, the Massachusetts forecast predicts sales and permits are expected to reach pre-recession levels in 2015, with prices rising at an average annual rate of nearly 3 percent between the end of 2013 and the end of 2016. But even with that growth, the median existing home price at the end of the five-year forecast period will still be 13 percent below its peak in 2005.
Forecasters report the national economy “continues to grow at a solid if less than exciting pace,” with gross domestic product growth estimated at 2.5 percent a year. That level of growth will be enough to expand national employment by 2 million jobs through the rest of 2012 and in 2013. The national forecast, offered by Moody’s Analytics chief economist Mark Zandi, says the jobs will bring the U.S. jobless rate below 8 percent by the end of 2012 and “closer to” 7 percent by the end of 2013.
Economic growth in New England will be only slightly more robust than nationally, averaging 2.8 percent a year through the end of 2016, with employment growth estimated at 1.3 percent per year. Those levels of growth, according to economists, are below what’s needed to significantly reduce unemployment in the region — pre-recession employment levels won’t be reached until 2015.
The fastest growing sectors this year in New England include high tech, professional and business services, and private education and health care services. Forecasters predicted growth in the number of biomedical engineers, market research analysts and marketing specialists, nurses, personal care aides, home health aides, physical therapists and post-secondary teachers.
This program aired on May 31, 2012. The audio for this program is not available.