Massachusetts has recovered from the recession of 2008 at a faster rate compared to the rest of the country, but that advantage will soon disappear, a Wednesday report from the New England Economic Partnership suggests.
The Commonwealth does not rely heavily on manufacturing sectors and other industries directly related to the recession. However, overall growth in the economy and a dip in the unemployment rate has led to a smaller margin between Massachusetts and the rest of the United States, according to the NEEP 2013 Economic Outlook Forecast.
“We didn’t fare as badly in this recession as the nation,” said Alan Clayton-Matthews, member of NEEP and economics professor at Northeastern University. “The housing sector was not as big in Massachusetts. We didn’t have anywhere near as much real estate … [but] 7.1 [percent unemployment in Massachusetts] is bad news. The unemployment rate is high. It [Massachusetts] lost its advantage relative to the national economy.”
The overall difference between U.S. and Massachusetts growth will diminish, but improvement will still continue, according to the report.
The unemployment rate for Massachusetts should fall from 7.2 percent to 5.2 percent by August 2017, and overall productivity in the Commonwealth, which increased by 13.7 percent in 2012, should continue to increase, according to the report.
The reason the Commonwealth has been able to stay ahead of the nation up until recent months has been the particular economic sectors it focuses on, said Randall Ellis, professor of economics at Boston University.
“Massachusetts was certainly hurt, and New England as well, but not as badly as much of the rest of the country because we rely less on manufacturing,” he said. “We have education and research, and medical care is our primary industry, which were [all] less sensitive to the downturn … [but] we have not fully recovered.”
Among the indicators that suggest a slow recovery is the unemployment rate, which is normally lower than the national average in Massachusetts. As of August, unemployment reached 7.2 percent, equal to the national rate for the same period of time. However, Clayton-Matthews said this could indicate future progress.
“The reason that [it] is not all bad news is because the rise in labor does indicate that the self-confidence among households … is increasing, and now they are willing to go back into the labor force and begin looking for work again,” he said. “In prior months, there was not even the confidence to come back and look for a job.”
While improvement in most sectors is projected, there is still much progress to be made in order to come back from the damage the recession did, Ellis said.
“This last recession was very deep and severe, and it fundamentally changed some markets, so it is taking longer to recover,” he said. “Some people question whether the U.S. will ever recover fully from these kind of changes in world markets.”
Even though they said they noticed growth, several residents said government at a state and national level has been inadequate in restarting economic growth.
“The economy and the creation of jobs, basically the lack of creation of jobs, affected me since I graduated high school,” said Nick Accardo, 31, resident of Chinatown. “I was able to get a job right out of high school, but ever since 2001, it has been really tough. The economy has gone down the [expletive].”
Leah Artwick, resident of Boston, said there is still room for growth.
“They [government officials] have been handling it as well as they could have [done],” she said. “Hopefully they will get it together soon, but for right now, they are not doing that great a job.”
Daniel Wolf, 27, resident of Allston, said he has not seen as much growth in the area, but he was grateful the Commonwealth has been able to stay above other parts of the nation
“Massachusetts’ decline in the economy has been less than in many other places,” he said. “We have a long way to go, but I don’t think we are affected as greatly as some of the other states.”