Economists: State Economic Outlook is Positive, But 'Issues That Merit Concern'

The economy in Massachusetts "looks to be in good condition although there are a number of issues that merit concern," announced economists in its second quarter assessment published on MassBenchmarks at the UMass Donahue Institute. 

With a slower than expected first quarter, which the board attributes to a severe winter, the report says that state and national employment continues to grow with "state wages and salaries rising at a healthy clip." The editorial board also indicates that sales tax revenues are increasing, and that households are spending more money. 

As critically important trading partners for Massachusetts, these local economists say that while overall global growth is weak, Europe and China are projected to climb above seven percent in the coming year. 

Concerns, according to economists contributing to the MassBenchmarks report, include stalls in the rebounding of single-family construction, and a slowed housing recovery. Business investment, too, they said "remains weak." 

"Although the negative impact of 'fiscal drag' is moderating," said the release, "it does appear to be having an impact on the Commonwealth's vaunted "innovation economy" and is likely part of the reason why state employment in research and development sectors has been stagnant of late. All these factors serve to slow, though not reverse, the state's economic expansion."

Longterm unemployment remains high, and household formation is sitting below the long-term average. 

Read the board's full report here.