Satya B. Mitra
Updated: December 23, 2024
Opinion
Viewpoint: Key factors will fuel 2025 economic growth
By Satya B. Mitra
Central Mass. is well positioned for economic growth in 2025. Macroeconomic factors, namely declining interest rates and a reduction in the growth rate of inflation, suggest the national economy will trend upward in 2025. President-elect Donald Trump has suggested possible tax reforms, such as lowering corporate tax rates and making the 2017 Tax Cuts and Jobs Act permanent, which should accelerate economic growth.
Central Mass. should benefit from or even exceed this projected national growth, due to key positive factors.
1. Affordable housing initiatives - Gov. Maura Healey and Housing Secretary Edward Augustus have emphasized affordable housing construction here. These projects will create jobs, expand the property tax base, attract new residents, and stimulate local spending.
2. Strong business community - Worcester’s business owners and organizations, such as the Worcester Regional Chamber of Commerce and the Worcester Business Development Corp., have played a vital role in economic development. For example, the Polar Park baseball stadium has become a catalyst for growth by attracting visitors and supporting local businesses. The business community has the foundation to handle any similar large-scale projects emerging in 2025.
3. Emergence of young entrepreneurs - Worcester’s attractive environment – with affordable housing, cultural opportunities, and education – encourages college graduates to remain in the area and launch businesses.
4. Biotech and pharmaceutical expansion - Worcester’s growth as a biotech and biomedical hub continues with developments like the Reactory, a 46-acre biomanufacturing park where companies like WuXi Biologics and Galaxy Life Sciences are being established. Worcester’s medical school, with its Nobel Prize-recognized research, adds further appeal for companies.
5. Increased college enrollment - Worcester’s reputation as a higher education hub will strengthen in 2025, boosted by initiatives like free community college tuition. More students mean more visitors, tuition revenue and spending in the local economy.
6. Workforce development - Efforts by the city, state, chamber, and local colleges to improve workforce training will provide skilled labor.
7. Population growth - Worcester’s population has surged due to increased housing, private investments, education, and medical research.
8. Infrastructure development - Worcester’s infrastructure has room to grow. With Massport under new leadership, expect a renewed focus on transportation options throughout Central Massachusetts.
9. Hospitality - The number of hotels in the city has not yet caught up to Worcester’s size (200,000+ residents and 35,000+ students). Expect our community leaders and city officials to work with developers and investors on hotel projects. More sophisticated hotels would attract conventions, trade shows, and tourists.
However, economic growth is not a certainty. On a national level, tariff programs are traditionally considered by economists as having a net negative impact on the economy. Trump’s immigration policies may have an impact on the availability of workers, creating challenges for businesses. Specific to Central Mass., the unemployment rate remains around 3.5%. Additionally, Worcester is committed to providing shelter for the unhoused and being a city warmly welcoming refugee populations. These are tremendous gestures by the city, showing what Worcester truly is, but with increasing homelessness and a rise in refugees due to global conflicts, additional economic resources will be needed to support these noble programs.
Despite these challenges, I predict a rising economy for Central Mass. in 2025. Economic indicators such as national GDP growth (2.8%) and Massachusetts GDP growth (2.4%) suggest stable growth. While not all projects will materialize immediately, many will begin or advance next year, setting the stage for growth.
Satya B. Mitra is president and CEO of The Guru Tax & Financial Services in Worcester. Please consult proper professional consultants before using any message or data given in the article, for your use. Satya B. Mitra is a registered representative. Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM. Insurance services offered through an Avantax affiliated insurance agency. The GuruTax and Financial Services, Inc.is not a registered broker dealer or registered investment advisory firm.
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