Mass. economy speeds up, jobs coming, says forecast
The Massachusetts economy is recovering at a quickening pace that will lead to more hiring over the next several months, setting the stage for an expansion that could create more then 200,000 jobs over the next five years, according to an economic forecast released today.
The forecast, presented at the New England Economic Partnership's semi-annual conference in Boston, projects a much stronger rebound for Massachusetts than those that followed the two previous recessions. The state should regain all the jobs lost in the recent recession by mid-2013, about four years after it ended.
After the downturn of the early '90s, it took the state more than six years to return to the pre-recession employment peak. The state never regained all the jobs lost in the technology bust that began in 2001.
"The state's recovery appears to be firmly on track," the forecast said. "Payroll employment should grow robustly in the second and third quarters, boosted by the hiring for the 2010 Census."
The forecast is somewhat brighter than one released six months ago. The New England Economic Partnership, a nonprofit analysis group, prepares and presents forecasts for the region and the six New England states twice a year.
The new forecast, prepared by Northeastern University economics professor Alan Clayton-Matthews, estimates that Massachusetts emerged from the recession in August, a few months earlier than projected last year. It has picked up momentum in recent months, adding nearly 12,000 jobs in first quarter while income and consumer spending grew strongly.
Still, with more than 300,000 unemployed residents and new workers entering the labor force, the state's unemployment rate, 9.2 percent in April, is expected to come down slowly. The forecast projects the jobless rate will remain above 9 percent into 2011.
The forecast also projects the rebound in home sales and prices will slow or pause with the expiration of federal tax credits for homebuyers at the end of April. The housing market might still see slightly higher sales this year, compared to 2009, but prices might dip during the rest of 2010.
Overall, the recession appears to have been milder here than for the nation as a whole. The recession here lasted about 16 months, compared to 20 months for the nation as a whole, according to the forecast. Massachusetts entered the recession in April 2008, about four months after national recession began.
The state lost about 5 percent of its jobs, compared to 6 percent nationally. The state's unemployment rate has also remained lower, hitting a recent peak of 9.5 percent, compared to 10.1 percent nationally.