Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Scale of Economy Improves in MABOSTON-The state has outperformed the US in early 2007, says a new report. That appears to be a good but perhaps temporary trend. Joe ClementsBOSTON-The Massachusetts economy is again taking a different path than the rest of the country, according to a study issued this week by Jones Lang LaSalle. These statewide improvements come as national GDP growth rate cooled to just 0.7% in the first quarter. But the good news for Massachusetts might be only a temporary trend, and the report warns of inherent difficulties that could ultimately derail recent gains enjoyed by Massachusetts.

If the US continues downward, construction and real estate sectors could be adversely affected, says JLL, whereas it notes MassBenchmark’s Current Economic Index puts the state’s economic growth rate at 4.7% during Q1. The report further indicates that 5,000 jobs were added in the first quarter, well above the pace of 3,000 for that same period in 2006. There was a jump of nearly 30,000 jobs between Q1 ’06 and Q1 ’07, according to JLL, which considers the first three months of the year to be the best quarter in Massachusetts since the start of 2003.

“Greater Boston has reason to be optimistic for the rest of 2007 after a highly productive first quarter,” says the overview, further indicating that the state’s housing market has bucked the national slowdown. While there were more than 2,000 petitions to foreclose issued in Massachusetts in March, double that from March 2006, the penetration of subprime lenders here is 18.2%, compared to the US average of 20.1% and the alarming rates of 27.6% in Rhode Island, 25.7% in California and 23.9% in Nevada, based on the amount of money lent to purchase homes. Q1 ’07 single-family home sales were up 13.8% versus Q1 2006, says JLL, while condo sales rose a surprising 15.4%.

The overall economic stability of the state is underscored by a record $24 billion of goods and services exported from Massachusetts last year, a majority of it technology-related. Final figures were not provided, but Q1 2007 is expected to exceed that record pace, says JLL.

The employment gains are particularly encouraging given that there is a re-emergence of core industries critical to demand for commercial real estate, says JLL, which cites education and healthcare services as leading the pack during the past year in Massachusetts. From Q1 2006 through the end of Q1 2007, education and health services registered a 3.0% increase in job growth. The professional and business-services category was second at 2.6%, followed by leisure and hospitality at 1.9%.

“The area will continue to see growth from companies that demand access to its highly educated labor force and intellectual capital such as wealth management or biotechnology,” says JLL. On the down side, even though housing should remain a buyer’s market, above-average home costs and a higher cost of doing business may limit population accretion and the state’s labor force, according to the report. Massachusetts had a 4.0% unemployment rate in the first quarter compared to 4.7% nationally. Continued economic growth is expected, says JLL, but it will be “restrained by high costs” long term, and should again track slower than the US over time.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.