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Hiring should continue in Mass., albeit at a slower pace

By Erin Ailworth
Globe Staff / January 22, 2012
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If 2011 is any indication, the Massachusetts economy will continue to improve this year, slowly creating jobs, lowering unemployment, and increasing opportunities for job hunters.

The state experienced a broad recovery last year as employers added nearly 41,000 jobs - the most since 2006 - and the unemployment rate fell by 1.5 percentage points to its lowest level in three years.

That means Massachusetts is fairly well positioned for 2012, said Brian Bethune, an Amherst College economics professor, especially if key industries keep hiring. The professional, scientific, and business services sector - which includes a variety of technology and research firms - led the state’s job growth in 2011, adding nearly 16,000 jobs.

“All these little pieces add up,’’ Bethune said. “They all add to an economy that’s percolating. It’s not really dramatic, but we’ll take it.’’

Since the recession ended more than two years ago, the state’s economy has recovered somewhat faster than the nation as a whole, driven by its tech sector and global demand for software, equipment, and other technology products. The state’s unemployment rate, 6.8 percent, is far below the national average of 8.5 percent.

A quarterly survey of more than 100 local companies by Professional Staffing Group showed that more employers expect to expand this year - 25 percent said they’d be hiring, up from 18 percent the previous quarter.

“We’re seeing strong hiring taking place in health care and technology companies,’’ said Aaron Green, the agency’s president.

Green said his company is seeing some demand for workers from financial services firms and colleges and universities.

“They’re definitely hiring,’’ he said, “but it’s not gangbusters.’’

Alan Clayton-Matthews, an economics professor at Northeastern University, said he expects the professional business services, education and health services, and information sectors to lead job gains this year. An improving national economy could also provide a boost to hiring here, since many Massachusetts firms sell in national markets.

The US economy added 200,000 jobs in December, and first-time claims for unemployment benefits recently fell to their lowest level since April 2008.

But the state and national economies also face risks that could damage their recoveries. Chief among them are the national debt crisis in Europe and a potential recession there. Europe is a major market for Massachusetts technology and pharmaceutical firms, accounting for about 40 percent of the state’s exports.

A recession in Europe, Clayton-Matthews said, could cut economic growth here significantly. “The question is how much exports might decline from Europe,’’ he said.

Elliot Winer, an economic consultant in Sudbury, said the state’s economy has a “long way to go’’ before it fully recovers. Massachusetts has only regained about half of the roughly 140,000 jobs it lost during the downturn.

“Things always look optimistic when you’re moving in the right direction, but that can be misleading,’’ Winer said. “There’s still a lot of apprehension on the part of companies hiring people.’’

Recent statistics illustrate that apprehension. Massachusetts employers cut more than 6,000 jobs in December, after adding just 300 in November, according to the Executive Office of Labor and Workforce Development. Job growth in the state slowed significantly in the second half of 2011 as information technology and other firms cut back on hiring, economists said.

Michael Goodman, a professor of public policy at the University of Massachusetts Dartmouth, said he is “uneasily optimistic’’ about the economy’s chances.

Aside from the situation in Europe, Goodman said possible federal cuts to science and research funding, as well as to the defense budget, could hurt the state’s innovation economy.

“We disproportionately benefit when times are good for science and innovation,’’ he said. Cuts to federal programs that help support them are “going to weigh on the leaders of our major research universities, our defense contractors.’’

Erin Ailworth can be reached at eailworth@globe.com. Follow her on Twitter @ailworth.

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