As 2013 begins, new economic forecasts for both the New England region and Massachusetts show continued slow growth and point to external influences as the reason, according to the New England Economic Partnership. Like the broader U.S. economy, New England economies are affected by the influence of the weak European economy and sovereign debt crisis, as well as domestic fiscal policy decisions.
In the first half of 2012, Massachusetts recovered at a quicker pace than the nation as a whole, and then growth slowed significantly in the third quarter of last year. Nonetheless, in terms of economic recovery since the depth of the recent recession, Massachusetts is second only to Vermont leading the recovery in the region.
Looking ahead, the Massachusetts economy is expected to slowly improve to grow at a more moderate pace in 2013, and then expand robustly in 2014 and 2015. Overall employment is expected to expand at an average of 1.4 percent over the next several years. However, certain sectors are going to grow substantially faster than the overall rate.
In the future, Massachusetts’ job mix will look significantly different from the state’s economic picture prior to the recession.
Among other things, this is due to changes in the demand for goods and services, as well as technological change. For example, it is expected there will be nearly 15 percent more jobs in education and health services in 2016 than there were in 2008. Conversely, there will likely be more than 7 percent fewer construction jobs. Like many states in the region, Massachusetts expects growth in professional and business services, along with leisure and hospitality to lead the way in job creation over the next couple of years.
Going forward, one of the particular challenges facing Massachusetts is its relatively high reliance on Europe as an export destination. State merchandise exports continue on a downward track, even as the broader U.S. export performance is improving.