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Andre Mayer

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Job Growth Accelerates Statewide

Posted by Andre Mayer on Mar 13, 2015 1:34:32 PM

Metropolitan areas across the state outpaced Greater Boston in employment growth during 2014, the Massachusetts Executive Office of Labor and Workforce Development reported Thursday. Barnstable (+3.6%), Leominster-Gardner (+2.7%), New Bedford (+2.5%), Pittsfield (2.5%), and Worcester (+2.2%) all saw higher rates of job creation than the aggregated Boston statistical area (1.9%); the only laggard was Springfield (+1.4%).  

A similar pattern prevailed among the divisions within Greater Boston. While the Boston-Cambridge-Newton core added jobs at a 1.8% rate, matched by Lowell-Billerica-Chelmsford, employment in the other seven divisions grew faster: Lawrence-Methuen and Lynn-Saugus-Marblehead, 3.3%; Peabody-Salem-Beverly, 2.7%; Brockton-Bridgewater-Easton, 2.5%; Haverhill-Newburyport-Amesbury and Taunton-Middlebourough-Norton, 2.3%; and Framingham, 2.1%.

Compared to most other states, Massachusetts added jobs quickly coming out of the Great Recession. The Boston area led the way, along with other tech- and services-heavy east- and west-coast cities. By 2014, however, solid employment growth had taken hold across the country – and across Massachusetts. 

(These figures, developed by the Bureau of Labor Statistics of the U.S. Department of Labor, reflect revised metropolitan area definitions based on commuting data from the 2010 census.)

Topics: Massachusetts economy, Jobs

Strong Employment Report May Signal Pressure on Wages

Posted by Andre Mayer on Mar 10, 2015 1:47:00 PM

Massachusetts added only 2,600 jobs in January but the unemployment rate dropped two-tenths of a point to 5.1 percent, a point below its level of last January, according to a preliminary report released today. The state unemployment rate is at its lowest level since May 2008.

Although the U.S. has seen consistently high levels of net job creation during the past year, the nation’s unemployment rate remains above the state’s: 5.7 percent in January and 5.5 percent in February.

Employment grew over the year in all sectors except Manufacturing (-1.0%). The largest gainers by percentage were Construction (+3.8%) and Information (+2.6%); by jobs added, Education and Health Services (+16,800) and Professional, Scientific and Business Services (+12,800) led the way.

Total employment in Massachusetts is at an all-time high, and the unemployment rate is at a level last seen before the Great Recession (although the economy was weakening in May 2008). Alternative measures of unemployment counting involuntary, part-time and discouraged workers are likewise at or near pre-recession levels.

The major remaining “deficits” are overall workforce participation, partly attributable to aging, and wages, which have had weak growth at best. The signs point to labor shortages ahead, and upward pressure on pay – especially in a state like Massachusetts with relatively slow population growth.

State reports will “catch up” with the national data next week, when we will see a Massachusetts report for February incorporating annual revisions. The revisions will show somewhat lower job growth (60,700 versus 68,000) and lower monthly unemployment rates in 2014 compared to initial reports. The household survey, the basis of the unemployment rate, shows a gain of 97,800 jobs on the year.

The federal Bureau of Labor Statistics develops the national and state data; the Massachusetts report is released by the state’s Executive Office of Labor and Workforce Development.

Topics: Massachusetts economy, Jobs, Unemployment

Snow Can't Chill Employer Confidence

Posted by Andre Mayer on Mar 3, 2015 9:00:00 AM

Epic snow and cold did little to chill the optimism of Massachusetts employers as business confidence surged in February for a sixth consecutive month.

BCI.February.2015The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 1.7 points to 59.8 on a 100-point scale - a total gain of 9.8 points since the same month in 2014. The increase reflects growing employer bullishness about the state and national economies, as well as their own growth and hiring plans.

“A year ago the Index was at an even 50, which is neutral on our scale,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Since then, employers have concluded that economic growth, though uneven, is well established and sustainable. As a result, the Index is at its highest level since October 2006 (59.9), before the Great Recession, and is approaching 60 – a reading we have not seen in 10 years (62.3 in February 2005).”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

Analysts say the confidence numbers foreshadow accelerating economic growth in 2015. Employer confidence about conditions six months from now rose two full points to 62.1 in February, while readings of sales and employment activity also increased.

“For the previous six months, employers who report adding staff outnumber those with decreases by about two-to-one (31% - 16%), but for the next period the ratio is better than four-to-one (37% - 8%),” said Michael A. Tyler, CFA, Chief Investment Officer, Eastern Bank Wealth Management, a BEA member.

“A determination to bring on additional personnel is in itself a very strong indication of employer confidence.”  

The sub-index for national conditions, a laggard through the recovery, is now well above 50, at its best level since August 2007, before the recession. The indicator of state conditions is just below 60, at its highest point since December 2000, before the prior downturn.

“Massachusetts employers believe that business conditions are generally good, and will continue to improve,” said Fred Breimyer, regional economist at the FDIC.

“Their optimism, though certainly restrained by the experience of severe recession, is now firmly established, and amply supported by trends in the economy.”   

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Economy At Risk If Education Does Not Keep Pace

Posted by Andre Mayer on Feb 6, 2015 11:36:07 AM

One of the key recommendations contained in AIM’s new Blueprint for the Next Century economic plan is for government and business to develop the best system in the world for educating and training workers with the skills needed to allow Massachusetts companies to succeed in a rapidly changing global economy.

BlueprintNextCenturyBut that goal remains at risk because our education system is not keeping pace with the demands of our economy. Experts estimate that almost three quarters of all jobs in Massachusetts will require postsecondary training by the year 2020 - sobering news as we confront a shortfall of 55,000-65,000 graduates from the public higher education system over the next decade.

A shrinking college-age population and growing proportions of low-income and minority people mean that the need for educated workers can be met only by raising college completion rates, closing achievement gaps, and attracting students from underserved populations. Funding is of course an issue: Massachusetts’ per-student appropriations for higher education are 40 percent of those of the top 10 states, and the commonwealth ranks forty-sixth in need-based state financial aid.

Employers struggling to find qualified workers understand that outcomes in higher education depend upon the effectiveness of early education and primary and secondary schools. The most important immediate step to strength K-12 education in Massachusetts is completion of the transition to the Common Core curriculum and Partnership for Assessment of Readiness for College and Career (PARCC) assessment program, to which Massachusetts committed itself as long ago as 2010.

These initiatives are cooperative undertakings by participating states, with Massachusetts in a leading role. Far from backing off the MCAS program implemented by Massachusetts in the 1990’s, they include comparable or superior standards in a much more useful form. Whereas MCAS culminates in what is basically and eighth-grade-level test (though administered in the tenth grade), the new system will have much more bearing on student preparation for college and the workplace. And economies of scale in the multi-state approach will permit a more student-centered assessment process that supports targeted assistance rather than placing hurdles in the way.

We support the efforts of the Massachusetts Business Alliance for Education, which commissioned a team of international experts to conduct a review of education in Massachusetts using the world’s best systems as the benchmark, and to outline steps to keep our system globally competitive. Education is not business, we know, but in education as in business, “the best” is not something you are, but something you do. To be and stay the best we must measure ourselves against the best, and foster a culture of continuous improvement and innovation.

Employer Confidence in State Hits 14-Year High

Posted by Andre Mayer on Feb 3, 2015 9:41:29 AM

Employers are more confident about the Massachusetts economy than they have been in 14 years.

BCI.January2015The Associated Industries of Massachusetts Business Confidence Index released this morning found that employer confidence in the Bay State economy surged 3.2 points to 59.3 during January on a 100-point scale. Overall business confidence rose for the fifth consecutive month, to 58.1, while the U.S. Index of business conditions nationally rose 4.0 points at 54.1.

“These are landmark figures,” said Katherine A. Kiel, Professor of Economics at the College of the Holy Cross and a member of the AIM Board of Economic Advisors.

“The national indicator is at a level not seen since before the Great Recession, in August 2007; and its state counterpart had not been this high since before the previous recession, in December 2000. Business confidence in Massachusetts conditions, like total statewide employment, did not fully recover from that earlier downturn before the next one hit.”

Richard C. Lord, AIM’s President and CEO, added, “Our members rate conditions within the commonwealth better than they have been in 14 years.”

Lord noted that the January Business Confidence Index survey included a question asking employers how they saw Massachusetts as a place to do business in 2015.

“Forty-two percent of respondents chose ‘the best’ or ‘very good,’ while only 8 percent went with ‘below par.’ It’s a credit to our business community, our work force, and our political leadership that employer perceptions are so positive,” he said.

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a 100-point scale on which 50 is neutral, the Index attained a historical high of 68.5 in 1997 and 1998; its all-time low was 33.3 in February 2009. 

Economists say rising confidence leads to economic growth.

“When the Federal Reserve notes strong job growth and solid expansion, as it did in its assessment last week, it’s important to recognize that businesses are creating those jobs because they are feeling confident about the future,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

The cheers for the economy were not, however, without reservation.

The Current Index, tracking employers’ assessment of existing business conditions, edged off one-tenth to 56.1, while the Future Index, measuring expectations for the next six months, added 1.7 to 60.1.

The three sub-indices related to survey respondents’ own operations all weakened in January. The Company Index, which assesses the situations of their own operations, was down a point to 59.1; the Sales Index shed six-tenths to 60.7; and the Employment Index fell 2.8 to 53.9.

“The sales and employment numbers are off for the second consecutive month,” noted Michael Goodman, Associate Professor of Public Policy, Executive Director of the Public Policy Center at UMass Dartmouth, and a BEA member.

“However, respondents expect both sales and hiring to increase in the next six months. Over the past six months, respondents reporting adding new staff have outnumbered those reporting layoffs 29 percent to 22 percent, while expectations for the next six months are much stronger with 33 percent reporting plans to hire and 11 percent expecting staffing reductions.”  

Topics: AIM Business Confidence Index, Massachusetts economy

Employer Confidence Highest Since 2007

Posted by Andre Mayer on Jan 6, 2015 9:52:35 AM

Massachusetts employers are more confident about the economy than at any time since before the Great Recession.

BCI.December.2014It is a confidence that may reflect a recovery that has finally gained enough momentum to tighten a labor market that has remained slack since the economy bottomed out in 2009.

The Associated Industries of Massachusetts Business Confidence Index (BCI) released this morning ended 2014 at 57.3, 7.1 points above last December’s level and its highest point since before the recession in July 2007.

“Fundamentals are looking much better – unemployment is down and job creation is running strong nationally and in Massachusetts, which shows up in rising consumer confidence; the federal deficit and the trade deficit are shrinking; and of course the stock market has done well,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Despite significant areas of weakness in the global economy, Massachusetts employers have ample cause to be optimistic.”  

Analysts say that optimism and a strengthening underlying economy may finally make the recovery feel like a recovery in 2015.

“For the second half of 2014, twice as many employers report increasing their staff (34 percent) as cutting jobs (17 percent); and expectations are likewise positive for the first half of 2015 (33 percent – 9 percent),” said Alan Clayton-Matthews, professor at the School of Public Policy and Urban Affairs at Northeastern University, a BEA member.

“This is in line with what we have been seeing in state employment reports, and raises the question of how quickly the Massachusetts labor market may tighten in the year ahead.”  

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The Massachusetts Index, assessing business conditions within the commonwealth, added a point on the month to 56.1, and the U.S. Index of national business conditions was up four-tenths to 50.1. The Current Index, which assesses overall business conditions at the time of the survey, was up 1.2 points to 56.2, while the Future Index, measuring expectations for six months out, shed a tenth to 58.4. The annual gains were 7.6 and 6.8 respectively.

Employers in the manufacturing sector were somewhat less positive (55.5, +0.2) than other employers (59.4, -0.1) as some companies continue to struggle with a changing economic landscape.

“For some employers the recession is in the past, while others are finding success elusive in a changed environment,”  Paul Bolger, President, Massachusetts Capital Resource Company.

Topics: AIM Business Confidence Index, Massachusetts economy

Employers Expect Happy New Year

Posted by Andre Mayer on Dec 2, 2014 9:19:20 AM

Improving economic fundamentals and the prospect of successful divided government in Massachusetts have left Bay State employers feeling merry about 2015.

BCI.November.2014The Associated Industries of Massachusetts Business Confidence Index rose 1.9 points in November to 56.8, leaving it with a gain of 6.6 for the year. More important, however, was the fact the employer sentiment about the next six months soared 4.3 points to 58.5, while confidence among executives in the condition of their own companies rose 2.8 points to 59.7.

“Survey respondents look forward to better conditions by next spring, in line with most economic forecasts,” said Fred Breimyer, regional economist at the FDIC.

“It is surprising that problems in the global economy – recession or near-recession in Europe and Japan, and slowing growth in China – are not enough to put a damper on these expectations.”

Elliot Winer, Chief Economist, Northeast Economic Analysis Group LLC, said gains in the Employment Index and Sales Index for November point to sustained job growth next year.

“Respondents reporting staff additions over past six months outnumber those recording cuts by almost two-to-one (31 percent-17 percent), and the expected ratio in the coming six months is better than three-to-one (32 percent-10 percent),” Winer said.

The November BCI ended just shy of the Index’s post-recession high of 57.1 reached in April 2012.

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a 100-point scale on which 50 is neutral, the Index attained a historical high of 68.5 in 1997 and 1998; its all-time low was 33.3 in February 2009. 

Employers continue to be more optimistic about the Massachusetts economy than the national - the U.S. Index of business conditions nationally was off nine-tenths at 49.7, while the Massachusetts Index of conditions within the commonwealth gained 1.8 points to 55.1. Analysts say that gap reflects the view of employers that Governor-Elect Charlie Baker and Democratic legislative leaders will work across party lines far more smoothly that the two parties in Washington.

“There is little indication of concern about having a governor of one party and a legislature controlled by the other,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“On a special survey question, 54 percent of respondents replied that they expect divided government to work better on Beacon Hill than in Washington, and another 28 percent thought it could be productive at both levels.”

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Employment Growth Not Limited to Boston

Posted by Andre Mayer on Nov 26, 2014 11:55:30 AM

Is employment growth in Massachusetts limited to the Boston area?

Not according to regional data from the Massachusetts Executive Office of Labor and Workforce Development. Over the period October 2013 – October 2014, employment in the Boston Metropolitan Statistical Area (MSA) increased a bit less than the statewide figure (3.9 percent versus 4.0 percent), and the unemployment rate declined a hair less (25 percent versus 26 percent) as well.

Job growth in the state’s other seven MSAs ranged from 3.4 percent in Fall River to 4.7 percent in the Worcester area; the highest rates were in the two largest areas, Worcester and Springfield (4.4 percent). Unemployment rate declines ranged from 23 percent in Springfield to 29 percent in Leominster-Fitchburg-Gardner. Barnstable, New Bedford, and Pittsfield fell in the middle on both measures, close to Boston and to the state averages.

The Boston MSA, covering eastern Massachusetts except for the south coast, Cape and islands, accounts for 74 percent of the state’s employment. Trends within that MSA are generally similar to those prevailing statewide, although the Lawrence-Chelmsford division recorded a lower rate of job growth (2.9 percent) and higher unemployment (8 percent, down from 11 percent last year.)

These regional figures, by the way, are prepared using a different methodology than the more widely noted state employment and unemployment reports. They show a seasonally unadjusted state unemployment rate for October of 5.1 percent, compared to the adjusted rate of 6.0 percent; and net annual job growth of 130,000 rather than 52,600.

If Greater Boston, by size alone, is the economic locomotive of the commonwealth, we can say that at this point it is pulling the train rather than pulling away. We are seeing job creation from Cape Cod to the Berkshires, and unemployment rates approaching (what we think of as) normal in most regions.  

Topics: Massachusetts economy, Unemployment

Employers Add 1,200 Jobs in October

Posted by Andre Mayer on Nov 20, 2014 1:45:27 PM

Massachusetts added 1,200 jobs in October, according to preliminary estimates from the federal Bureau of Labor Statistics released today by the state’s Executive Office of Labor and Workforce Development (detailed chart here). The unemployment rate remained unchanged at 6.0 percent, slightly above the national rate of 5.8 percent.

The October report for Massachusetts is notably weaker than the strong national report released two weeks ago. Together, they support a conclusion that the state’s economy is currently growing somewhat more slowly than the nation’s, but that a longer perspective shows Massachusetts keeping pace.  

Over the past year, Massachusetts has gained a net of 52,600 jobs, and the unemployment rate has declined by 1.2 percent. The annual figures are more indicative of trends than the monthly results, which tend to fluctuate. With the October report, we are finally free of the effects of the Market Basket imbroglio, in which thousands of employees were temporarily out of work – an event large enough to produce discernable ripples even in the national data.

Sectors with the largest year-over-year job gains include Education and Health Services (+16,000), Professional, Scientific and Business Services (+14,500), and Information (+7,900 – a 9.1 percent increase). Manufacturing basically held its own, shading off by 700 jobs, or 0.3%.

The figures cited above, except for the unemployment rate, derive from a survey of employers. The household survey shows considerably stronger job creation – a gain of 16,400 for the month and 100,600 for the year. The same pattern appears in the national data.

 

Topics: Massachusetts economy, Unemployment

Employer Confidence Rises As Companies Brighten View of National Economy

Posted by Andre Mayer on Nov 3, 2014 9:00:14 AM

The Associated Industries of Massachusetts Business Confidence Index posted its sixth increase in eight months during October as a brightening view of the national economy helped the index add half a point to 54.9.

BCI.October.2014“The Index is up 8.2 points from last October, which was the month of the federal government shutdown,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“In that context, it is encouraging to see our U.S. Index of national conditions back above 50, up from below 40, and predominantly positive assessments of the business climate from all categories of Massachusetts employers.”   

Torto noted, however, that employers foresee a slight weakening of conditions in the six months ahead.

“There may be some uneasiness about the upcoming elections and the long-expected end of quantitative easing by the Federal Reserve,” he said, “along with concern about the state of the global economy, characterized by fitful growth in the U.S., slowing expansion in China, and Europe on the edge of recession. These generally fall under the heading of uncertainties rather than threats, although Europe’s condition is especially important to Massachusetts because of extensive ties of trade and direct investment.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral. A reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The Massachusetts Index, assessing business conditions within the commonwealth, added 2.6 points on the month to 53.3, and the U.S. Index of national business conditions was up 3.6 to 50.6.

“The U.S. Index reached 50 for only the second time since 2007,” remarked BEA member Michael A. Tyler, CFA, Chief Investment Officer, Eastern Bank Wealth Management, adding that “larger companies were more likely to rate business conditions in Massachusetts better than those prevailing nationally.” Compared to last October, the state indicator was up 8.8 points while its national counterpart gained 12.8 points.

The Current Index, which assesses overall business conditions at the time of the survey, was up 1.8 points at 55.7, while the Future Index, measuring expectations for six months out, shed seven-tenths to 54.2. The annual gains were 9.5 and 6.4 respectively.

“These results indicate a moderate level of satisfaction – short of outright enthusiasm – about current conditions, coupled with a degree of caution about the future course of the economy,” Tyler noted. “Business sentiment has found a firm footing since the series of fiscal crises that peaked a year ago.”  

All three of the sub-indices bearing on survey respondents’ own operations shaded off in October. The Company Index, reflecting overall business conditions, was off 1.1 points to 56.9, the Sales Index lost 1.7 to 57.6, and the Employment Index shed seven-tenths to 54.4.

“Declines in these company-specific indicators may be seen as signs of rising uncertainty,” said Sara L. Johnson, Senior Research Director of Global Economics at IHS Global Insight, a BEA member. “While companies of all sizes were generally positive, large employers were much more confident than small ones about their own situations.”

Confidence was slightly higher in the manufacturing sector (55.2, +4.1) than among other employers (54.7, -3.7), and higher outside Greater Boston (58.2, +5.4) than outside the metropolitan area (53.5, -1.8).

“Manufacturers were more positive about national conditions, and about their own companies’ positions, than other respondents,” Johnson noted.

“Caution about the immediate future was evident in hiring expectations,” she said; only 16% of employers foresaw additional staffing in the coming six months, compared to 33% who added personnel in the prior six months. Staff reductions were at 13% for both periods.  

BCI.October.2014

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

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