By seemingly each measure, the Massachusetts economic system will probably proceed to keep up its sluggish tempo for the foreseeable future, dropping floor to not solely its neighbors, but in addition competitor states throughout the nation.
Our state stays caught in an intractable enterprise loop brought on by its excessive value of residing, a flat labor market, risky state tax revenues, a decline in inhabitants progress, and restrictive federal insurance policies associated to commerce, analysis, and immigration.
That’s the view of coverage consultants in academia and Beacon Hill.
No surprise that in keeping with the Related Industries of Massachusetts’ latest month-to-month Enterprise Confidence Index, sentiment amongst Bay State employers remained in pessimistic territory by September, the identical place it’s been caught since March.
Michael Goodman, a professor of public coverage on the College of Massachusetts Dartmouth, mentioned he doesn’t anticipate Massachusetts to maneuver right into a recession over the approaching 12 months, however as a substitute will stay caught in a “sluggish progress, larger value setting.”
The state’s unemployment charge in August remained at 4.8% — in comparison with the 4.3% nationwide share — for the fourth straight month, in keeping with the Government Workplace of Labor and Workforce Growth. Employment was steady, however job progress had slowed, in keeping with the workplace.
Mike Lynch, an affiliate director for U.S. financial service at S&P World Market Intelligence, mentioned labor market challenges will stay within the native skilled, scientific, and expertise providers industries.
These points will conspire with a “sharp deceleration” in inhabitants and labor drive progress, constricting the obtainable expertise pool for employers, he mentioned.
However these broad-brush assumptions don’t element to what diploma our state economic system has deteriorated.
The Massachusetts Alternative Alliance reported in September that in keeping with complete new information by the primary quarter of 2025, the Bay State’s personal sector employment has dropped even additional since 2024, remaining far beneath pre-COVID ranges.
The brand new Bureau of Labor Statistics information paint a bleak image for Massachusetts. Not solely are whole private-sector job developments nonetheless beneath pre-COVID ranges, Massachusetts jobs have additional declined by the primary quarter of 2025.
In comparison with pre-COVID ranges in January 2020, Massachusetts has had web losses of practically 37,000 private-sector jobs 5 years later, representing 1.2% of whole personal employment.
In the meantime, Connecticut, Maine, New Hampshire, and Rhode Island have all seen web job positive aspects since 2020.
Extra regarding, key competitor states resembling Florida and North Carolina have soared previous Massachusetts, with each seeing double or triple the speed of New England’s personal sector job progress over the past 5 years.
And a current CNBC report famous {that a} rising physique of information reveals that current faculty grads, feeling the brunt of the weakening labor market, are having a uniquely tough time making an attempt to clinch their first full-time jobs.
It’s the identical inhabitants that’s more likely to flee Massachusetts for extra inexpensive places with higher job prospects, like North Carolina and Florida.
Plainly put, Massachusetts wants to attract a brand new, inventive blueprint that capitalizes on the one true ace up its sleeve — mental capital.
Engaging and retaining companies that depend on that mind energy will give Massachusetts a combating probability to reverse its fortunes.
Sentinel and Enterprise
Initially Revealed:
