Massachusetts Economic Growth and Challenges · 2020. 1. 21. · • MA has experienced prolonged...
Transcript of Massachusetts Economic Growth and Challenges · 2020. 1. 21. · • MA has experienced prolonged...
Massachusetts Economic Growth and Challenges
January 21, 2020
Mark Melnik Ph.D., Director, Economic & Public Policy Research Group
UMass Donahue Institute
Massachusetts’ Economic Growth since the Recession
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• 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
• The economy is showing some mixed signs heading in to 2020
• MA economic success is not felt the same by everyone
• Spotlight on the Cape Cod Economy and Maritime Economy
• Current issues facing Massachusetts
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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
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Natural Increase
International Migration
Domestic Migration
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Natural Increase International Migration Domestic Migration
Estimated Components of Population Change
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Massachusetts Population Change, with and without Immigrants
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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.
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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
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Massachusetts 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%
0.20 0.15 0.10 0.05 0.00 0.05 0.10 0.15 0.20
Health Care and Social AssistanceEducational Services
Retail TradeProfessional and Technical ServicesAccommodation and Food Services
ManufacturingAdministrative and Waste Services
Finance and InsuranceConstruction
Public AdministrationWholesale Trade
Other Services, Except Public AdministrationTransportation and Warehousing
InformationManagement of Companies and Enterprises
Arts, Entertainment, and RecreationReal Estate and Rental and Leasing
All Other
Massachusetts United States
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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), 1998-2018
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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), 1998-2018
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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
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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
CanadaChina
MexicoGermany
JapanIreland
United KingdomSwitzerland
ItalyRepublic of Korea
All Other
$Billions
Massachusetts’ 2018 Top Trading Partners (in $2018)
Source: WISERTrade; UMDI analysis
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The economy slowed in the fall but things have since seemed to stabilize. AIM Business Confidence Index, December 2018-December 2019
60.461.4 62.1 62.4
60.2 60.8 61.8 61.5 61.262.4 62.7 62.6 63.6
40
45
50
55
60
65
Dec-18
Jan-1
9
Feb-19
Mar-19
Apr-19
May-19
Jun-1
9Ju
l-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
The state is performing well overall…
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but these impacts are not felt evenly.
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Part Time for Economic ReasonsNumber of Part Time for Economic Reasons, Massachusetts (Thousands of Persons)
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Unemployment by Educational AttainmentPopulation in Massachusetts 25 Years and over, 2010-2017
Source: U.S. Census Bureau, American Community Survey, 2017 1-Year Estimates; UMDI analysis
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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%
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Greater Boston is driving the state’s population growth.
Source: U.S. Census Bureau; UMDI analysis. Note: Greater Boston is the sum of Suffolk and Middlesex counties.
Population Growth Index, 2010-2018 (2010=1.00)
Greater Boston,1.09
Rest of MA, 1.04
United States, 1.06
0.98
1.00
1.02
1.04
1.06
1.08
1.10
2010 2011 2012 2013 2014 2015 2016 2017 2018
Popu
latio
n G
row
th In
dex,
201
0=1
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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%
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Greater Boston is also driving the state’s job growth.
Source: U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of Employment and Wages; UMDI analysis. Note: Greater Boston is Suffolk and Middlesex counties.
Employment Growth Index, 2010-2018 (2010=1.00)
Spotlight on the Cape Cod Economy and Maritime Economy
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Barnstable County Compared to the StateBarnstableCounty
Massachusetts
Bachelor’s Degree or Higher
41.7% 43.4%
Foreign Born 9.4% 17.4%
Median Age 53.8 39.5
MedianHousehold Income
$68,902 $79,835
Source: U.S. Census Bureau, American Community Survey
Barnstable, 7.6%
MA, 10.0%
0%
2%
4%
6%
8%
10%
12%
% Below Poverty Level
BarnstableCounty
Massachusetts
Owner-Occupied Dwellings 81.9% 61.8%
Children Living in Household 15% 25.9%
Vacant Housing for seasonal use 90% 45%
The median age of Barnstableresidents is 14 years greater thanthe rest of Massachusetts
Seasonal housing in Barnstable County is twice the rest of the state
Barnstable,11.2%
MA, 28.4%
0%
5%
10%
15%
20%
25%
30%
% Non-White
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Home Sale Prices by Region
$0
$100,000
$200,000
$300,000
$400,000
$500,000
2000
2002
2004
2006
2008
2010
2012
2014
2016
ESSEX MIDDLESEXNORFOLK SUFFOLK
$0
$100,000
$200,000
$300,000
$400,000
$500,000
2000
2002
2004
2006
2008
2010
2012
2014
2016
BRISTOL PLYMOUTHBARNSTABLE WORCESTER
$0
$100,000
$200,000
$300,000
$400,000
$500,000
2000
2002
2004
2006
2008
2010
2012
2014
2016
BERKSHIRE FRANKLINHAMPDEN HAMPSHIRE
Eastern Mass Southeast and Central Mass Western Mass
Source: 2000-2017 Massachusetts Association of Realtors (MAR)
Barnstable County
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Barnstable County Population in 2010 Compared to Projected Population in 2040
(10,000.00) (5 ,000.00) - 5,000.00 10,000.00
Barnstable County Population 2040
Source: UMass Donahue Institute Population Projections
(15,000) (10,000) (5 ,000) - 5,000 10,000
00 through 04 Years05 through 09 Years10 through 14 Years15 through 19 Years20 through 24 Years25 through 29 Years30 through 34 Years35 through 39 Years40 through 44 Years45 through 49 Years50 through 54 Years55 through 59 Years60 through 64 Years65 through 69 Years70 through 74 Years75 through 79 Years80 through 84 Years
85 Years Plus
Barnstable County Population 2010Male Female
(300,000.00) (200,000.00) (100,000.00) - 100,000.00 200,000.00 300,000.00
MA Population 2040
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Projected Population in 2040, Barnstable County and the State
(10,000.00) (8 ,000.00) (6 ,000.00) (4 ,000.00) (2 ,000.00) - 2,000.00 4,000.00 6,000.00 8,000.00
00 through 04 Years05 through 09 Years10 through 14 Years15 through 19 Years20 through 24 Years25 through 29 Years30 through 34 Years35 through 39 Years40 through 44 Years45 through 49 Years50 through 54 Years55 through 59 Years60 through 64 Years65 through 69 Years70 through 74 Years75 through 79 Years80 through 84 Years
85 Years Plus
Barnstable County Population 2040Male Female
Source: UMass Donahue Institute Population Projections
0%2%4%6%8%
10%12%14%16%18%20%
Accom
modati
on an
d Foo
d Serv
ices
Health
Care
and S
ocial
Ass
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Retail T
rade
Constr
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Educa
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Admini
strati
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Profes
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Tech
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Service
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Arts, E
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Rec
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Trans
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Finan
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uranc
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Manufa
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Inform
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Wholes
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All Othe
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Shar
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Tot
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Cape & Islands WDAMassachusetts
Source: Massachusetts Executive Office of Labor and Workforce Development, ES-202; UMDI analysis.Note: “WDA” indicates “workforce development area”. “All Other Industries” include Real Estate, Rental and Leasing; Utilities; Management of Companies and Enterprises; Agriculture, Forestry, Fishing, and Hunting; Mining, Quarrying, and Oil and Gas Extraction, Government, and Other Services.
Cape & Islands WDA and Massachusetts, 2018
Cape Cod Industry Mix, 2018
Source: UMass Dartmouth Public Policy Center, “Navigating the Global Economy: A Comprehensive Analysis of the Massachusetts Maritime Economy”, https://www.mass.gov/files/documents/2018/01/24/Maritime_Economy.pdf
Massachusetts Maritime Economy, 2015
The Commonwealth’s Maritime Economy has a substantial impact on the overall economy.
Source: UMass Dartmouth Public Policy Center, “Navigating the Global Economy: A Comprehensive Analysis of the Massachusetts Maritime Economy”, https://www.mass.gov/files/documents/2018/01/24/Maritime_Economy.pdf
Distribution of Maritime Economy Businesses, 2015
Maritime Economy businesses are concentrated along all of the Commonwealth’s coastal areas.
The Economic Case for Municipal Wastewater Treatment1. Septic systems put wastewater treatment responsibility and compliance on
the owner
2. Septic systems are expensive to upgrade/repair/replace
3. Lack of sewerage forces businesses to operate their own septic systems or treatment plants
4. Wastewater treatment enables reuse of vacant/underutilized properties and more compact/dense downtown areas
5. Enables homeowners to expand, allowing families to stay invested in local communities
6. Provides viable wastewater treatment options for residential properties on lots too small for modern systems
7. Prevents the need for expensive and unsightly raised septic systems
8. Attracts property and business owners who want to live/operate a business in the area but do not want to be in the wastewater treatment business
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What are the options?
1. The Costs of Doing Nothing (The Do-Nothing Alternative)
o Considerations: Negative impacts on property values, tourism revenues, local investment in communities; political, regulatory and legal costs
2. Go It Alone: Building an entire wastewater treatment system for just one town
o Considerations: The town has the greatest control over the wastewater system but that means that the town is responsible for the entire cost of building the system.
3. Multi-Town Effort
o Considerations: A regionalized system takes advantage of economies of scale, spreads the costs amongst multiple municipalities and reduces the individual costs vs. going it alone. This means that the town has less control over the wastewater system.
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Summary of 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
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Mark Melnik, Ph.D.
Director of Economic & Public Policy Research GroupUMass Donahue Institute
One Beacon Street, Floor 31Boston, MA 02108
(617) 287-3988
www.donahue.umassp.edu
Thank you!
UMass Donahue UMass Donahue Institute
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