MA growth double that of Nation

[palindrome]

Mass. economy grows 3.4%, twice US rate

By Robert Gavin, Globe Staff | October 28, 2006

The Massachusetts economy, boosted by demand for technology products, grew twice as fast as the national economy in the third quarter, according to figures released yesterday by the US Department of Commerce and the University of Massachusetts.
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It was the second consecutive quarter that Massachusetts has outpaced the United States, and the first time since the end of the tech boom in 2001 that the state's economy has grown significantly faster than the nation's.

The state's economy expanded at an estimated 3.4 percent annual rate in the three-month period ended Sept. 30, compared with 1.6 percent nationally, UMass said. In the previous quarter, the state economy grew at a 3.6 percent annual rate, compared with 2.6 percent nationally.

The UMass report indicates a turnaround for the state economy, which in recent years has significantly lagged the national expansion. Massachusetts is now matching the nation's rate of job growth, while the state's broader economy has posted three consecutive quarters of solid economic growth above 3 percent.

"The state has experienced the strongest growth since the recession, lifted by worldwide demand for its technology and science-based products," said Alan Clayton-Matthews, the UMass-Boston professor who did the analysis.

The economic role reversal captured in the UMass report is the result of the industry mix in Massachusetts. Unlike the national economy, driven by consumer spending, Massachusetts, with its high concentration of firms that sell goods and services to other companies, depends heavily on business spending.

The national economy gained momentum in the past few years as job growth, low interest rates, and rising housing values spurred consumer spending. But more recently, rising gasoline prices, higher interest rates, and weakening housing markets have dampened consumer spending and economic growth.

Yesterday, for example, the Commerce Department reported that the nation's third-quarter economic growth rate was the weakest in more than three years, slowed by a 17 percent plunge in residential housing investment.

Meanwhile, business spending nationally rose at 8.6 percent, accelerating from 4.4 percent in the previous quarter. Corporations, now enjoying three years of double-digit profit growth, are spending at a healthy clip. Business spending on technology rose 6.4 percent in the third quarter.

"What we're seeing is the reverse of our last recession, when consumer spending went up, business spending went way down, and the Massachusetts economy got hammered, " said Andre Mayer, senior vice president of research at Associated Industries of Massachusetts. "Now, we're seeing some strength, and it's looking like a decent year."

But Massachusetts will not prosper long if the national economy weakens further. If consumers stop buying, consumer-products companies stop their robust spending on goods and services produced by Massachusetts firms. EMC Corp., for example, the state's biggest technology company, has had 13 consecutive quarters of revenue growth in excess of 10 percent. And Raytheon Co., the giant Waltham defense contractor, recently reported that its third-quarter profit rose 41 percent from the same period a year ago.

"We've had very favorable conditions, but we're heading into a headwind," said Jim Klocke, executive vice president at the Greater Boston Chamber of Commerce. "The biggest question is what happens to the national economy over the next year."

For the time being, however, the Massachusetts economy is enjoying its best year since the recovery began three years ago. While Massachusetts still has 145,000 fewer jobs than at the pre-recession peak in February 2001, job growth has accelerated. The state has added more than 30,000 jobs in the past year, matching the national job growth rate of about 1 percent. In the previous year, jobs in Massachusetts grew at less than half the national rate.

Moreover, said Clayton-Matthews, the job growth is in high-paying sectors, such as technology, biotechnology, and financial services. Manufacturing employment also has stabilized, boosted by record exports of technology, scientific products, and other products.

As a result, the state is enjoying strong wage growth, helping offset rising energy prices and a weakening housing market, said Clayton-Matthews . Based on an analysis of withholding taxes collected by the state, per-worker wages rose 4.7 percent over the past year, twice the rate of inflation for that period.

With the recent decline in energy prices, Clayton-Matthews projects the state economy will slow only slightly over the next six months, to a 3.3 percent annual rate.

Robert Gavin can be reached at rgavin@globe.com.

http://www.boston.com/business/globe/articles/2006/10/28/mass_economy_grows_34_twice_us_rate/

 

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Report: Mass. economy surging
The Massachusetts economy accelerated in the first three months of the year, growing at its fastest rate since the recovery began in 2003 and nearly quadrupling the national rate of economic growth, the University of Massachusetts reported.

The state economy grew at annual 4.7 percent rate, UMass said, while the US Commerce Department reported that national economy expanded at a sluggish 1.3 percent rate.

Driving the Massachusetts economy is global demand for the state's technolgy and biopharmaceutical products, UMass analysts said. Through February, the most recent data available, exports of pharmaceutical products rose 23 percent from a year earlier, while those of industrial machinery jumped 28 percent, according to the World Institute for Strategic Research, a nonprofit research group at Holyoke Community College.

This demand has helped fuel solid job growth, particularly in technology and bioscience sectors, UMass analysts said. Job growth accelerated to average 5,000 jobs a month in the first quarter, compared to an average of about 3,000 per month last year.

All told the state added 15,000 jobs in the first quarter, while the unemployment rate fell to 4.4 percent in March, from 5.2 percent at the end of 2006 and 4.8 percent from a year earlier, according to the state Executive Office of Labor and Workforce Development. The US jobless rate was 4.4 percent in March.

UMass analyzes a variety of data, including employment, tax collections, and stock performance of local companies, to estimate the state's economic growth. UMass analysts cautioned that rising consumer prices and the weak housing market still pose risks to the expansion.

?Expected continued softness in the housing market may dampen consumer spending and in doing so weaken economic growth in the Commonwealth," said Alan Clayton-Matthews, a public policy professor at UMass-Boston. "In addition, the possibility of rising inflation and a rise in interest rates could further weigh on the state?s near-term growth prospects.?
(By Robert Gavin, Globe staff)


http://www.boston.com/business/ticker/2007/04/report_mass_eco.html

 

[Waldorf]

A new Massachusetts Miracle?

 

[palindrome]

Guess not....

Report: NE economy to lag through 2011

New England's economic gains will continue to trail the nation's growth over the next four-and-a-half years, and the region's housing prices will keep declining through early next year, a regional economic forecast organization predicted today.

The New England Economic Partnership said New Hampshire and Connecticut are the only states in the region expected to exceed the nation by certain measures of economic performance during a forecast period running through 2011.

New Hampshire's economy is expected to have the region's strongest economy, with the value of the state's goods and services keeping pace with the nation's gross product growth rate, and job growth forecast to slightly exceed the nation's. Connecticut is expected to exceed the national growth rate for personal income.

The other four New England states will slightly lag the nation by most economic measures through 2011, according to the latest twice-a-year forecast prepared for the economic organization's spring conference in Boston today.

The value of New England's products and services is expected to post growth averaging 2.6% per year during a forecast period through 2011, compared with the 2.9% growth rate forecast for the nation, according to the forecast by a panel of economists.

Growth in total employment is expected to average 0.9% per year in New England, below the national average of 1.2%. Regional per capita income is forecast at 2.3% per year, compared with the nation's 2.5%.

Those trends are in line with economic data from recent years that have shown New England lagging the nation, and trailing far behind fast-growing regions such as the South and Southwest. After eight consecutive quarters of declines beginning during a recession in 2001, the number of jobs in New England finally began to increase in the second quarter of 2003.

The housing slump that began to ripple across much of the nation's housing market last year has hit especially hard in New England, and isn't expected to go away soon.

The forecast organization said it expects median housing prices in New England to decline through the second quarter of next year, with the steepest price declines expected in the final three quarters of this year. A slow recovery is expected beginning in mid-2008, but the region's housing prices aren't expected to return to their historic pre-slump peak until the middle of 2010.

By the time the slump ends, New England's median housing prices are expected to drop 12% from their pre-slump peak, bigger than the more than 8% decline forecast for the nation by Moody's Economy.com, an economic forecasting company.

"The housing price decline in the region is significant, but the decline is not expected to be as pronounced as the decline in the last housing recession in the late 1980s and early 1990s," said Ross Gittell, the organization's forecast manager and a professor at the University of New Hampshire.

Michael Goodman, the forecast organization's president and a University of Massachusetts economist, said efforts to make New England's housing more affordable shouldn't cease just because prices have declined.

"Housing production across much of New England is not expected to be adequate to meet demand in the years to come, and this market correction we are experiencing will make it even more difficult for developers," Goodman said. "This underscores the need for the development of prudent state policies to develop more affordable housing in New England."

The New England Economic Partnership is a 36-year-old nonprofit forecast organization with members from private industry, government and academia. (AP)

http://www.boston.com/business/ticker/2007/05/report_ne_econo.html


Contrarian to the first 2 articles. :?