City, News

Greater Boston GDP declining, report finds

The Boston metropolitan area experienced a decrease in its rate of economic growth in 2013, though Greater Boston’s economy still outstripped New England’s 15 metropolitan areas, a Tuesday report found.

The report by the U.S. Bureau of Economic Analysis found that Greater Boston, which includes the neighboring cities of Cambridge and Newton and part of southeastern New Hampshire, saw an increase in real gross domestic product of 1.6 percent in 2013, down from 2.5 percent in 2012.

“Gross domestic product takes into account sources of economic action,” said BEA spokesman Thomas Dail. “…At a growth rate of 1.6 percent in 2014, it is in the middle of the pack compared to other areas in the nation.”

Gross domestic product represents the total monetary value of all goods and services produced in an area, and includes investments, private and public consumption, among other economic factors.

In the New England region overall, the average growth in GDP was 1.3 percent, compared to 1.8 percent for the entire nation, a Tuesday BEA press release stated.

Despite its slight decline in GDP growth rate, the Boston metro area remains close to average for economic growth across the nation, Dail said.

“In terms of larger growth in 2013, the biggest factor would be professional business and service, which was offset by negations in transportation and information systems,” he said.

Real estate, rental and leasing information were large factors that contributed to the growth in the Boston metropolitan area, the BEA’s release stated.

Nicholas Martin, a spokesman for the Boston Redevelopment Authority, said large, comprehensive reports such as the BEA’s run the risk of misrepresenting progress within individual cities.

“From a construction perspective, I don’t know of a time in recent history where we’ve seen more building activity than we have now in Boston,” Martin said in an email. “If you talk to developers and those in the real estate community, they’ll likely reinforce the notion that Boston is growing, not declining, economically. We’re on pace to approve a significantly higher amount of development this year.”

Randall Ellis, a professor of economics at Boston University, said the BEA analysis may not entirely account for the economic strength and development in the state.

“Unemployment in Massachusetts is below the national average,” he said. “Housing prices are up, which is a signal that people are eager to move here.”

Regional GDP growth may also be below the national average due to declines in defense spending, Ellis said.

Several residents said although the data may not be entirely representative of Boston, they are still confident in the city’s economic activity.

Dan Norton, 44, of Brighton, said he was surprised to learn Boston’s GDP had not increased in the last year.

“Downtown is packed with restaurants and bars and other areas [indicate] a lot of wealth,” he said. “A small decrease seems within a reasonable margin of error.”

Zahra Suleiman,30, of Boston, who has returned to BU to finish her education, said the slight fluctuation in GDP still merits some concern for the economy.

“This region has the potential to come up with new ideas and ways of fixing the fundamental problems of our economy,” she said. “Unless we find a revolutionary new way of doing things, we’ll keep on going in the same direction.”

Boston will continue to thrive due to its innovation and universities, Suleiman said.

“With so many colleges in the area, the city has got its own sub-life [with] local stores and startups,” she said. “It’s an attractive area, and people are still coming. Boston will do a little better than other areas, but the same trends in the economy still apply.”

Comments are closed.