Alan Clayton-Matthews Forecasts Unemployment and Job Growth

Economists see more slow growth in Mass.

By Priyanka Dayal McCluskey | Worcester Telegram | May 22, 2013

Forecasters expect more slow growth for the Massachusetts economy in the year ahead as the state struggles through federal spending cuts and tax increases.

Payroll employment is expected to grow 1 percent in 2013, increasing to 1.6 percent next year and 2.2 percent the year after that. “Normal” job growth won’t return until 2016.

A forecast from Alan Clayton-Matthews, economist at Northeastern University, predicts the state unemployment rate to drop gradually to 5.2 percent by the end of 2017. The state unemployment rate was 6.4 percent in April. In Worcester County, the rate is higher.

“Growth in both the state and the nation is being restrained by fiscal policy, due to the Social Security tax increase and sequestration spending cuts,” Mr. Clayton-Matthews said. “If it were not for a resurging private demand, these fiscal brakes might have sent the economy back into a recession. As it is, they are instead delaying, by a few quarters, the acceleration in growth usually associated with this phase of the business cycle.”

Within New England, Massachusetts and Vermont are growing more strongly than other states, especially Rhode Island and Maine. Economists for the New England Economic Partnership said Wednesday that vulnerabilities in the European economy are still affecting New England. The local housing market, meanwhile, appears to be on the upswing, they said.

Mr. Clayton-Matthews also addressed the workforce shortage facing the manufacturing sector. As many as 100,000 manufacturing jobs are expected to open up in Massachusetts over the next 10 years. “Will the state’s education system have the capacity and the quality programs needed to supply the future workforce?” he asked.

Looking ahead, he said, employment in construction, professional and business services, leisure and hospitality, information, and education and health services will grow faster than overall employment.

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