Don't Be Fooled; It's Still a Jungle Out There
Central Massachusetts businesses can take a little comfort in last month's report from MassBenchmarks that the gross state product - the output of goods and services in the commonwealth - grew at an annual rate of 3.9 percent during the third quarter of this year, more than one-and-a-half times the growth in the national gross domestic product.
While we’re clearly bucking the national trend, MassBenchmarks, published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston, doesn’t see anything as robust as 3.9 percent on the near horizon. In fact, MassBenchmarks predicts the state economy will grow at only a 2.7 percent rate the rest of this year and 2.9 percent in the first quarter of 2012.
So while we’re not out of the woods, at least conditions in our area are better than they are nationally, which is more than we can say compared with previous downturns. Yes, the employment situation improved during the quarter, and housing sales rose year over year. But consumer and business confidence is not robust enough for most companies to step up hiring, and better results in Massachusetts are not translating to the kind of confidence that gives hiring the kick it needs. In that arena, unfortunately, we mirror the rest of the nation. And the ongoing political catfight in Washington over the federal debt darkens the cloud of economic uncertainty hanging over businesses, especially those in the Bay State that depend on defense contracts or government funding for research. “Employers, like many other Americans, are increasingly doubtful of Washington’s ability to come to grips with our economic woes,” said Raymond G. Torto, who chairs the Board of Economic Advisors for Associated Industries of Massachusetts (AIM), a business advocacy group that cited a drop in its monthly measure of business confidence across the state in October.
That brings us to the overseas markets, where there seems to be more hope for growth. European leaders appear to be moving – slowly – toward easing a debt crisis that could become a real drag on the global economy. A European recession would hit Massachusetts particularly hard since 40 percent of the state’s exports go to that continent. On the other hand, new free trade agreements with South Korea, Colombia and Panama can reduce the costs of moving goods, and thus provide a kick to exports to those countries. Any sustained upward-pointing economic signs can give business hope, but the signs today remain inconsistent. Business needs a steady stream of positive — or at least not bad — economic news, and to see those signs stay up with some consistency before increased spending becomes a reality in their operations.
A Nudge For Downtown
Petula Clark extolled the virtues of going “Downtown” in her top 10 pop hit of the mid-1960s. Worcester could keep that in mind as it pushes forward with its revitalization projects. Last month’s survey by The Worcester Regional Research Bureau found a couple of troubling signs for the city’s downtown: a five-year drop in the office occupancy rate, and lots of vacant space (at least 10,000 square feet) in 21 of 44 buildings surveyed.
The bureau said the recession and a lack of investment in downtown buildings don’t help matters, but it cited a number of major projects downtown that could help bring in new tenants, namely the cancer center at St. Vincent’s Hospital and the new Gateway Park II research complex. And, the recent announcement by Commerce Bank that it was buying its long-time headquarters — the Slater Building — on Main Street is a sign of faith and future life for an area that can use it.
Downtown Worcester is in a state of transition. The demolition of the former Galleria Mall and construction of City Square are evidence of movement in the city. While cities across the nation have been largely stagnant on development the last three years, Worcester’s list of active projects, while slow-moving, are a sign that it will have some positive momentum in place when the economy finally builds some steam.
WBJ Web Partners
Most Recent
Most Recent
0 Comments