Slow Going For Bay State Economy—Tech A Small Bright Point
In the face of a declining housing market, the high costs of gasoline and heating oil, and fallout from the subprime mortgage debacle, third-quarter 2007 growth estimates for the Massachusetts economy have been revised downward, according to MassBenchmarks Current Economic Index figures released today. The outlook is for slower growth in the first half of 2008, although the press release about the data said the sluggishness could be partially mitigated by growing demand for the high-technology products and services in which the area excels.
The Bay State economy grew at an annual rate of just 3 percent in Q3, according to the revised data, down from the 3.6 percent rate originally predicted. By contrast, the U.S. gross domestic product (GDP) grew at a 4.9 percent rate, noted MassBenchmarks, which is published quarterly by the University of Massachusetts Donahue Institute in cooperation with the Federal Reserve Bank of Boston.
The forecast for the first half of 2008 was even gloomier, with the MassBenchmarks Leading Economic Index indicating that the state’s economy is expected to grow at an annualized rate of a fairly anemic 2.2 percent between November 2007 and next May. State economic growth has slowed since the first quarter of last year, when it achieved a 4 percent growth rate, the report said.
“On a positive note,” the press release continued, “there is growing national and worldwide demand for technology-based products and knowledge-based services that Massachusetts supplies. These include information processing equipment and software, pharmaceuticals, biotechnology, scientific research and development, consulting, engineering, and financial services.”