The Bay State’s economy will grow slowly this year before bouncing back in 2014, while the state’s unemployment rate is poised to fall to 5.2 percent by the last quarter of 2017, according to an economic forecast released today by the New England Economic Partnership.
Massachusetts payroll employment is expected to grow 1 percent this year, 1.6 percent in 2014 and will average 2.2 percent in 2015 in response to pent-up consumer demand that will help the pace of growth return to “normal” levels in 2016. This growth will then slow further as baby boomers retire, said Northeastern University economist Alan Clayton-Matthews.
Despite fiscal austerity resulting from payroll tax increases and federal budget cuts, robust stock and housing markets have helped contribute to increased consumer demand, Clayton-Matthews said. The improved housing market will also spur fast gains in construction over the next five years, according to the forecast.