Report: Mass. labor force growth aiding outlook
Massachusetts has the fastest growing population among northeastern states, according to a report released Tuesday that called that development "striking" and a contributing factor to a growing labor force and optimism about the state's economic prospects.
The MassBenchmarks report, summarizing the recent sentiments of area economists, attributed the growing population and labor force to international immigration and a "lower level of domestic net outmigration than has been experienced in recent recoveries."
MassBenchmarks co-editor Michael Goodman, director of the Public Policy Center at UMass Dartmouth, said that compared to previous post-recession periods, fewer people have moved out of Massachusetts. There's been a simultaneous increase in international immigration.
"It's definitely been a boost to our growth," Goodman told the News Service. "It's certainly a good sign."
According to the population estimates program at the UMass Donahue Institute, Massachusetts is growing twice as fast as the Northeast region on average, and faster than any other Northeast state, based on data for the year ending July 1, 2013. An institute official said a fresh batch of annual population data is due out later this month.
"While Massachusetts shows a reasonable rate of natural increase compared to other Northeastern states, its total positive migration - specifically the large number of international in-migrants offsetting a relatively small number of domestic out-migrants - explains why the state leads the region in growth," institute officials wrote in a summary of the most recently available population data.
Among other reasons for optimism about the state's economic track, experts noted state gross product growth has "kept pace with strong national growth for the past two quarters," and said consumers have more money and businesses face lower costs because of falling oil and gas prices. One MassBenchmarks editorial board member estimated that half a percentage point might be added to the national economic growth rate this year because of lower oil prices.
Massachusetts software, information technology and staffing services sectors are "doing well," according to MassBenchmarks, while wages are rising "modestly" and the state is getting a lift from the national economic expansion marked by the addition of more than 300,000 jobs in October and upward revisions of job growth in August and September.
Among the challenges identified by economists were rising winter electricity prices, low levels of housing production, "squeezed" federal expenditures, and "significantly constrained" state infrastructure spending in the wake of last month's repeal by voters of the 2013 law indexing the gas tax to inflation.
After a "weak" first quarter, the Massachusetts economy is experiencing "solid economic growth," board members concluded after meeting earlier this month.
"While there continue to be serious concerns about the geographically and financially imbalanced nature of this recovery, the MassBenchmarks Editorial Board is as optimistic as it has been in some time and expects the state's economic expansion to continue for the foreseeable future," according to MassBenchmarks, which is published by the Donahue Institute with help from the Federal Reserve Bank of Boston.
The report contrasts with House Speaker Robert DeLeo's assessment of things on Monday, when he told reporters the state faced "difficult fiscal times."
Gov. Deval Patrick last month opened up this year's $36.5 billion annual budget to make spending cuts and asked legislative leaders to approve additional budget-balancing measures.
The budget calls for a 5.6 percent increase in spending, and DeLeo said Monday he'll wait until after Governor-elect Charlie Baker takes office on Jan. 8 to tackle the budget gap remaining after Patrick's nearly $200 million in unilateral spending cuts.
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