BOSTON—While noting that Massachusetts is experiencing job growth it has not seen since the 1990s, the region's demographics as well as outside influences will put a damper on employment growth in the years to come.

Alan Clayton Matthews, an economist with Northeastern University, says that the aging of the population in the Commonwealth, along with a weakening of the world economy “could be a damper on things in the short run.”

Matthews, who released his forecast on the Massachusetts economy through 2018 at a Federal Reserve Bank of Boston conference earlier this month, tells Globest.com that despite his prediction of lower job growth rates going forward, “Massachusetts is experiencing a burst of economic growth reminiscent of the 1990s.”

In his report for the New England Economic Partnership, he notes that in the previous 12 months that ended in August, the number of payroll jobs in the state increased by 90,200, which calculates out to a 2.6% job growth rate. Since the bottom of the job market back in October 2009, Massachusetts' payroll employment has risen at an impressive 1.7% average annual clip.

He predicts job growth will peak this year at 2.0% and gradually decline to 1.8% in 2016, 1.4% in 2017 and fell below 1% to 0.7% in 2018. He predicts the unemployment rate, which was at 4.7% at the end of August, will fall to an average of 4.1% in 2018.

“The fastest growing super sectors in terms of job growth are expected to be business and professional services, construction and education and health, which are expected to grow at average annual rates of 3.6%, 2.7% and 2.1% respectively,” he states in his “Massachusetts Economic Outlook Report.” He adds that information, leisure and hospitality and finance sectors should produce annual job growth rates of 1.8%, 1.7% and 1.2% respectively. Sectors that will likely lag in terms of overall employment include government, manufacturing, trade, transportation and utilities.

Matthews charges that the state of Massachusetts' infrastructure could have a major influence on future economic growth. He says that more investment needs to be made in mass transit and in the Commonwealth's roads and bridges both within regions and the transportation network connecting regions.

He says the need for increased infrastructure investment is nothing new in Massachusetts, but Matthews notes, “If we fix those problems it could only help growth.” He says that access to mass transit is especially important to Millennials, who have been flocking to the Greater Boston area. “Anything we can use to attract young professionals will help mitigate this demographic problem of aging Baby Boomers," Matthews says.

He adds that transportation enhancements are needed to also allow easier worker commutation from areas where manufacturing has declined to prospering gateway cities where the jobs are.

Matthews predicts the housing market will remain strong, but not turn hot. He expects price appreciation of approximately 3% each year through 2018 and housing permit growth of about 10% for the same period.