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Massachusetts Economic Growth and Challenges January 30, 2020 Mark Melnik Ph.D., Director, Economic & Public Policy Research Group UMass Donahue Institute

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Page 1: Massachusetts Economic Growth and Challenges

Massachusetts Economic Growth and Challenges

January 30, 2020

Mark Melnik Ph.D.,

Director, Economic & Public Policy Research Group

UMass Donahue Institute

Page 2: Massachusetts Economic Growth and Challenges

Massachusetts’ Economic Growth since the Recession

2

• MA has experienced prolonged economic growth since the end of the recession.

• What is driving economic growth in the state?

o Cutting-edge, Knowledge-based Industries (e.g., tech, life sciences, etc.)

o Research & Development

o Educated Workforce

o Foreign-born Labor

• MA economic success is not felt the same by everyone

• Spotlight on the South Shore region

• Current issues facing Massachusetts

Page 3: Massachusetts Economic Growth and Challenges

3

Population Growth across the United States

UMass Donahue Institute. Source: Cumulative Estimates of the Resident Population Change for the United States, Regions,

States, and Puerto Rico: April 1, 2010 to July 1, 2019 (NST-EST2019-02). U.S. Census Bureau, Population Division. Release Date:

December 30, 2019.

Cumulative Percent Population Change, April 1, 2010 to July 1, 2019 by U.S. State

Page 4: Massachusetts Economic Growth and Challenges

4

Natural Increase

International Migration

Domestic Migration

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

Natural Increase International Migration Domestic Migration

Estimated Components of Population Change

Page 5: Massachusetts Economic Growth and Challenges

5

Massachusetts is a leader in job growth in the Northeast.

Change in Employment by State, 2010-2018

Source: U.S. Bureau of Labor Statistics, Current Employment Statistics; UMDI analysis.

Page 6: Massachusetts Economic Growth and Challenges

6

Unemployment rate is heading to historic lowMonthly Unemployment Rates in Massachusetts and the United States, January 2000-August 2019,

Seasonally adjusted

Source: Massachusetts Executive Office of Labor and Workforce Development, Local Area Unemployment Statistics

0%

2%

4%

6%

8%

10%

12%

Un

em

plo

yme

nt

Rat

e

Massachusetts United States

Page 7: Massachusetts Economic Growth and Challenges

7

Unemployment rate is heading to historic lowMonthly Unemployment Rates in Massachusetts and the United States, January 2000-October 2019,

Not seasonally adjusted

Source: Massachusetts Executive Office of Labor and Workforce Development, Local Area Unemployment Statistics

0%

2%

4%

6%

8%

10%

12%

Un

em

plo

yme

nt

Rat

e

South Shore WDA

Massachusetts

United States

Page 8: Massachusetts Economic Growth and Challenges

8

Massachusetts and U.S. Industry Mix, 2018

Sources: Massachusetts Executive Office of Labor and Workforce Development, ES-202; U.S. Bureau of Labor Statistics,

Quarterly Census of Employment and Wages. UMDI analysis.

Note: All Other includes: Utilities; Agriculture, Forestry, Fishing, & Hunting; Mining, Quarrying, and Oil & Gas Extraction;

and Unclassified industries.

14.9%

8.7%

10.8%

6.4%

9.5%

8.7%

6.4%

4.1%

5.1%

5.1%

4.0%

3.1%

4.2%

2.0%

1.6%

1.9%

1.6%

2.0%

18.1%

10.1%

9.9%

9.2%

8.7%

6.8%

5.2%

4.8%

4.7%

3.8%

3.5%

3.4%

3.1%

2.7%

2.1%

1.9%

1.3%

0.7%

-20% -15% -10% -5% 0% 5% 10% 15% 20%

Health Care and Social Assistance

Educational Services

Retail Trade

Professional and Technical Services

Accommodation and Food Services

Manufacturing

Administrative and Waste Services

Finance and Insurance

Construction

Public Administration

Wholesale Trade

Other Services, Except Public Administration

Transportation and Warehousing

Information

Management of Companies and Enterprises

Arts, Entertainment, and Recreation

Real Estate and Rental and Leasing

All Other

Massachusetts United States

Page 9: Massachusetts Economic Growth and Challenges

9

Massachusetts and South Shore Industry Mix, 2018

Sources: Massachusetts Executive Office of Labor and Workforce Development, ES-202. UMDI analysis.

Note: All Other includes: Utilities; Agriculture, Forestry, Fishing, & Hunting; Mining, Quarrying, and Oil & Gas Extraction;

and Unclassified industries. South Shore is the South Shore Workforce Development Area (WDA).

17.7%

8.1%

13.0%

5.2%

10.0%

4.2%

4.6%

8.1%

6.9%

3.3%

3.4%

4.0%

2.0%

2.4%

2.4%

2.3%

1.6%

0.7%

18.1%

10.1%

9.9%

9.2%

8.7%

6.8%

5.2%

4.8%

4.7%

3.8%

3.5%

3.4%

3.1%

2.7%

2.1%

1.9%

1.3%

0.7%

-20% -15% -10% -5% 0% 5% 10% 15% 20%

Health Care and Social Assistance

Educational Services

Retail Trade

Professional and Technical Services

Accommodation and Food Services

Manufacturing

Administrative and Waste Services

Finance and Insurance

Construction

Public Administration

Wholesale Trade

Other Services, Except Public Administration

Transportation and Warehousing

Information

Management of Companies and Enterprises

Arts, Entertainment, and Recreation

Real Estate and Rental and Leasing

All Other

Massachusetts South Shore

Page 10: Massachusetts Economic Growth and Challenges

10

NIH Research and Development

Sources: U.S. Department of Health and Human Services, National Institutes of Health (NIH) Research Portfolio Online

Reporting Tools (RePORT), NIH Awards by Location & Organization, accessed 10/15/2019; UMDI analysis.

Top 5 State Leaders in NIH Funding (in $2018), 1998-2019

Page 11: Massachusetts Economic Growth and Challenges

11

NIH Research and Development Per Capita

Sources: U.S. Department of Health and Human Services, National Institutes of Health (NIH) Research Portfolio Online

Reporting Tools (RePORT), NIH Awards by Location & Organization, accessed 10/15/2019; U.S. Bureau of Economic Activity

(BEA), Regional Data GDP & Personal Income, SA1 Personal Income Summary, UMDI analysis.

Top 5 State Leaders in per capita NIH Funding (in $2018), 1998-2019

Page 12: Massachusetts Economic Growth and Challenges

12

Entrepreneurship: Growth in Venture Capital

Source: PricewaterhouseCoopers, https://www.pwc.com/us/en/industries/technology/moneytree.html

Massachusetts Venture Capital Funding, 2010-2019 by Quarter

Page 13: Massachusetts Economic Growth and Challenges

13

Logan Airport Passenger Volumes Surging

Source: U.S. Department of Transportation, Federal Aviation Administration Air Carrier Activity Information System (ACAIS),

Passenger Boarding (Enplanements) and All-Cargo Data for U.S. Airports; Retrieved from Wikipedia;

https://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/. Years represent full calendar years (CYs).

Overall Passenger Volume in Logan International Compared to Airports of Similar Size, 2010-2018

Page 14: Massachusetts Economic Growth and Challenges

14

Job growth has slowed statewide.

Annual Average Employment in Massachusetts by NAICS Supersector, 1990-2018

Source: U.S. Bureau of Labor Statistics (BLS), *Includes Mining & Natural Resources, Construction, Information, and Other

Services

Page 15: Massachusetts Economic Growth and Challenges

15

The economy slowed in the fall but things have since

seemed to stabilize. AIM Business Confidence Index, December 2018-December 2019

Source: U.S. Bureau of Labor Statistics (BLS), *Includes Mining & Natural Resources, Construction, Information, and Other

Services

60.461.4

62.1 62.4

60.2 60.861.8 61.5 61.2

62.4 62.7 62.6 63.6

40

45

50

55

60

65

Page 16: Massachusetts Economic Growth and Challenges

16

Canada, China, and Mexico are our top trading partners

for exports and imports.

$10.5

$7.9

$6.0

$4.1

$3.6

$3.0

$2.8

$2.3

$1.9

$1.8

$19.0

$0 $5 $10 $15 $20

Canada

China

Mexico

Germany

Japan

Ireland

United Kingdom

Switzerland

Italy

Republic of Korea

All Other

$Billions

Massachusetts’ 2018 Top Trading Partners (in $2018)

Source: WISERTrade; UMDI analysis

Page 17: Massachusetts Economic Growth and Challenges

The state is performing well overall…

17

but these impacts are not felt evenly.

Page 18: Massachusetts Economic Growth and Challenges

18

Part Time for Economic Reasons

Number of Part Time for Economic Reasons, Massachusetts (Thousands of Persons)

Source: U.S. Bureau of Labor Statistics, Current Population Survey; Dr. Alan Clayton-Matthews’ analysis

Page 19: Massachusetts Economic Growth and Challenges

19

Unemployment by Educational Attainment

Population in Massachusetts 25 Years and over, 2010-2017

Source: U.S. Census Bureau, American Community Survey, 2017 1-Year Estimates; UMDI analysis

Page 20: Massachusetts Economic Growth and Challenges

20

Massachusetts Population Growth, 2010-2018

Source: UMDI mapping analysis, U.S. Census Bureau, Population Division, April 1, 2010 to July 1, 2018, Annual Estimates of

the Resident Population

State: 5.1%State: 5.1%

Page 21: Massachusetts Economic Growth and Challenges

21

Source: UMDI mapping analysis, Bureau of Labor Statistics (BLS), 2010 to 2018 Quarterly Census of Employment and Wages

(QCEW)

Massachusetts Employment Growth, 2010-2018

State: 12.5%State: 13.9%

Page 22: Massachusetts Economic Growth and Challenges

The share of households that were cost burdened

increased between 1999 and 2010, and remained elevated

among renter households through 2017.

Source: U.S. Census Bureau, Decennial Census (1999) and American Community Survey, 5-year estimates

(2013–2017)

Page 23: Massachusetts Economic Growth and Challenges

23

Home Sale Prices by Region

$0

$100,000

$200,000

$300,000

$400,000

$500,000

200

0

200

2

200

4

200

6

200

8

201

0

201

2

201

4

201

6

ESSEX MIDDLESEXNORFOLK SUFFOLK

$0

$100,000

$200,000

$300,000

$400,000

$500,000

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

BRISTOL PLYMOUTH

BARNSTABLE WORCESTER

$0

$100,000

$200,000

$300,000

$400,000

$500,000

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

BERKSHIRE FRANKLINHAMPDEN HAMPSHIRE

Eastern Mass Southeast and Central Mass Western Mass

Source: 2000-2017 Massachusetts Association of Realtors (MAR)

Page 24: Massachusetts Economic Growth and Challenges

Spotlight on the South Shore Region

24

Page 25: Massachusetts Economic Growth and Challenges

25

South Shore and Other Major Regions

Page 26: Massachusetts Economic Growth and Challenges

21%

34%

30%

15%

Greater Boston (2020)

22%

27%33%

18%

Massachusetts (2020)0-19 20-39 40-64 65+

26

South Shore at a Glance

22%

24%35%

19%

South Shore (2020)

• 8.6% of MA

Population

• 6.5% of Jobs in

MA

• 11% of Finance

Jobs in MA

• 9.4% of

Construction

Jobs in MA

• 3.5% UER in

January 2019

Page 27: Massachusetts Economic Growth and Challenges

27

South Shore Inflow-Outflow Analysis, 2017

Source: U.S. Census Bureau, On the Map. Note: South Shore is the South Shore Workforce Investment Area (WIA)

INFLOW121,099

Employed in South Shore, Live Outside

105,233

Employed and Live in South Shore

OUTFLOW183,970

Live in South Shore, Employed Outside

Top 10 Work Destinations

for North Central Residents

MunicipalityShare of

Workers

Boston 25.0%

Quincy 6.7%

Braintree 3.7%

Weymouth 3.3%

Cambridge 2.5%

Brockton 2.1%

Plymouth 1.3%

Newton 1.2%

Waltham 1.1%

Milton 1.0%

Page 28: Massachusetts Economic Growth and Challenges

(30,000.00) (20,000.00) (10,000.00) - 10,000.00 20,000.00 30,000.00

00 through 04 Years

05 through 09 Years

10 through 14 Years

15 through 19 Years

20 through 24 Years

25 through 29 Years

30 through 34 Years

35 through 39 Years

40 through 44 Years

45 through 49 Years

50 through 54 Years

55 through 59 Years

60 through 64 Years

65 through 69 Years

70 through 74 Years

75 through 79 Years

80 through 84 Years

85 Years Plus

South Shore Population 2040

28

South Shore Population in 2010 Compared to Projected

Population in 2040

Source: UMass Donahue Institute Population Projections

(30,000.00) (20,000.00) (10,000.00) - 10,000.00 20,000.00 30,000.00

00 through 04 Years

05 through 09 Years

10 through 14 Years

15 through 19 Years

20 through 24 Years

25 through 29 Years

30 through 34 Years

35 through 39 Years

40 through 44 Years

45 through 49 Years

50 through 54 Years

55 through 59 Years

60 through 64 Years

65 through 69 Years

70 through 74 Years

75 through 79 Years

80 through 84 Years

85 Years Plus

South Shore Population 2010

Male Female

Page 29: Massachusetts Economic Growth and Challenges

Current Issues Facing Massachusetts

• Housing affordability

• Aging population & attracting and retaining young workers

• Investment in public education and infrastructure

• Transportation reliability and rising congestion

• Business confidence in the state—tariffs, trade, uncertainty of

federal policy

• Geographic and social equity of economic opportunity

29

Page 30: Massachusetts Economic Growth and Challenges

30

Mark Melnik, Ph.D.

Director of Economic & Public Policy Research

UMass Donahue Institute

One Beacon Street, Floor 31

Boston, MA 02108

(617) 287-3988

[email protected]

www.donahue.umassp.edu

Thank you!

UMass Donahue UMass Donahue Institute

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