Thu, May 26, 2011
Massachusetts Economy Recovering, But With Imbalances
The Massachusetts economy continues to strengthen faster than the nation as a whole, according to state economists.
A recent commentary from the Editorial Board of MassBenchmarks, a publication of the UMass Donahue Institute’s Economic and Public Policy Research arm, notes that the state’s unemployment rate in April was 7.8%, significantly better than the national average of 9.0%. A significant part of the commonwealth’s economy is concentrated in education, health care, and high technology, and these have played an important role in enabling the recovery. These economic sectors have bounced back from the Great Recession more quickly than others, and this have enabled a stronger recovery. Massachusetts has also benefitted from the fact that some of its exports are targeted at fast-growing economies like China and Inda.
The report also notes, with some caution, that the state’s economic strength is disproportionately concentrated in the metro Boston area. Elsewhere, the state’s “Gateway Cities,” like Fall River, New Bedford, Lawrence, and Springfield, have not bounced back as quickly as the rest of the country, with some of these areas experiencing unemployment rates of 10 – 20%.
The near-to-mid-term expectation is that economic growth will remain moderate in Greater Boston and less so elsewhere. The problem of economic growth in other parts of the state is a challenge that will require long-term investments in education and infrastructure.