Massachusetts Adds Jobs, but Unemployment Rate Rises

Posted by Andre Mayer on Jul 18, 2013 11:41:00 AM

Massachusetts added 2,800 jobs in June but the unemployment rate increased to 7.0 percent, according to preliminary estimates from the U.S. Bureau of Labor Statistics released today by the state's Executive Office of Labor and Workforce Development. May's job gain was revised upward from 3,500 to 6,700.

UnemploymentTotal employment continues to creep ahead, but gains are much slower than they were early in the year. This is in line with the indications provided by AIM's monthly Business Confidence Survey of employers, which shows lower expectations for new hiring based on prevailing economic uncertainties and concerns about the robustness of growth through the rest of 2013.

Over the year, these employment statistics – derived from the BLS's monthly survey of employers – report 40,300 additional jobs in the Commonwealth since last June – a respectable rate of growth that has brought total employment back above its pre-recession level.

The results of the BLS's survey of households are strikingly different, however. These are the numbers used to produce the unemployment rate, which has risen from 6.7 percent to 7.0 percent over the past year. While employers report 40,300 more employees compared to last June, the household survey finds only 3,600 more state residents with jobs; overall, employers report some 78,000 more employees than are found in the household survey. This discrepancy, attributable at least in part to people holding multiple part-time jobs, provides further evidence of lack of vigor in the labor market.

The state employment for June is consistent with the findings on the New England economic situation reported in the Federal Reserve's Beige Book, released yesterday: moderate growth, but generally stagnant hiring. More rapid growth must go hand in hand with more robust job creation.

Topics: Business Center, Massachusetts economy, Unemployment

Community College Funding to be Based upon Performance

Posted by Andre Mayer on Jul 12, 2013 3:14:00 PM

In a significant step towards making the Massachusetts public higher education more responsive to the workforce needs of employers, the Fiscal Year 2014 approved by the House and Senate and signed by Governor Deval Patrick today includes funding and language carrying forward reform of the state’s 15 community colleges.

Community collegesThe centerpiece is a $20 million performance-based funding component, allocated according to a new formula that measures each college's performance on a set of metrics that includes graduating students who have the skills needed by the key sectors of the Massachusetts economy. In addition, the budget restores $5 million to the Department of Higher Education for performance management initiatives at community colleges to promote higher completion rates, the adoption of common course numbering, and consolidation and coordination of administrative and procurement processes.

For Commissioner of Higher Education Richard Freeland, who persuaded the college presidents to support the initiative, the legislative action represents important progress towards realization of his vision, presented to AIM's Public Affairs Council last year, of a public higher education system that responds effectively to the Commonwealth's economic needs.

It is also a victory for the 18-month reform push of the Coalition FOR Community Colleges, in which AIM participates along with other business and civic organizations and number of employer members.

 "We remain more convinced than ever that our community colleges are a vital tool for the social and economic betterment of our Commonwealth, and now they have the funding, tools, and accountability measures to move forward," commented Mary Jo Meisner of The Boston Foundation, who coordinates the coalition.

AIM's view has been that improvements in funding strategy, more than adjustments to mission statements and governance structure, would drive needed change in the community college. We thank the Legislature and especially the conference committee, led by Ways & Means Chairmen Sen. Stephen Brewer and Rep. Brian Dempsey, for taking this important step.


Topics: Business Center, Education, Training

Employer Confidence Hits Another Summer Slump

Posted by Andre Mayer on Jul 2, 2013 9:14:00 AM

Here we go again.

AIM Business Confidence IndexConfidence among Massachusetts employers declined during June for the fourth consecutive year, dropping 3.2 points on the monthly Associated Industries of Massachusetts (AIM) Business Confidence Index. Slumping business confidence has apparently become as much a part of summer landscape in New England as beach days and the Red Sox.

The AIM Index declined to 48.9, moving below neutral on its 100-point scale and below its first-half average of 50.2. The only encouraging news is that the decline was far less severe than the 8.5-point drop in June, 2012.

Economists say it’s hard to identify a single explanation for this year’s summer slump.

"The recent downward revision of growth estimates for the earlier part of 2013 align with our survey's finding that many Massachusetts employers experienced a slowdown in the first half – 32 percent of respondents reported sales declines, compared to 29 percent with gains," said Raymond G. Torto, Global Chief Economist at CB Richard Ellis Group, Inc. and Chair of AIM's Board of Economic Advisors (BEA). 

"Weak conditions in Europe and political deadlock in Washington continue to be concerns, and there has been disturbing news from China, a major engine of global growth.  These, together with signals that the Federal Reserve may taper off its quantitative easing stimulus, cast a shadow over AIM's members and their outlook."    

Richard C. Lord, President and Chief Executive Officer of AIM, suggested that employers may be suffering from “recovery fatigue.”

“We keep hearing that the economy is on the mend, and we believe it, but for too many companies the recovery never seems to reach the point where it allows them to regain their own firm footing and move forward. Until they feel robust growth, employers will not commit themselves to the job creation necessary to put the Great Recession behind us," Lord said.

The loss of confidence during June was pervasive - all of the individual confidence readings that make up the overall BCI were off from May, though most were at or above their levels of a year before.  The smallest monthly loss (-0.8) and largest yearly gain (+3.0) belonged to the U.S. Index of national business conditions, at 43.6.

The Current Index, which assesses overall business conditions at the time of the survey, lost 2.3 points in June to 48.3, and the Future Index, measuring expectations for six months out, fell 4.1 to 49.5. The Company Index, reflecting survey respondents' assessments of conditions for their own operations, was down 4.2 points in June at 51.1, and the Sales Index lost 4.6 to 50.0.  

"The Employment Index held up better, shedding 1.2 points to 50.7, and unlike the other company-specific sub-indices it is up (+1.4) from last June," said BEA member Elliot Winer, Chief Economist, Northeast Economic Analysis Group LLC.

Over the past six months, 27 percent of respondents reported adding staff while 20 percent cut back, and for the period ahead 21 percent plan to add personnel and 15 percent foresee reductions.

"Employers remain very reluctant to add personnel," Winer noted. "To the degree that there has been employment growth in Massachusetts, it has been concentrated in the professional and business services sector where it is difficult to do more business without adding staff." 

Topics: Business Center, AIM Business Confidence Index, Massachusetts employers

Former President of Mexico Talks Trade with Massachusetts Employers

Posted by Kristen Rupert on Jun 28, 2013 11:21:00 AM

The former president of Mexico, Felipe Calderon, touted that nation as a strong and healthy economic partner for the U.S. in a recent meeting with 70 Massachusetts business executives.

CalderonMexico is the number two destination for all United States goods exports ($213 billion in 2012), outranked only by Canada.   Already a viable manufacturing alternative to China for US firms, Mexico has a skilled workforce and proximity to the U.S. that Calderon said often tip the scales against Asia’s rising wages and increased fuel costs.  President Barack Obama’s visit to Mexico last month signaled the importance of Mexico and its population of 110 million people as a strategic partner and neighbor.  

Mexico’s recent economic growth—GDP has increased steadily since 2010—was the centerpiece of Calderon’s recent remarks, delivered in Cambridge.

Calderon, who stepped down from the presidency in December, emphasized that significant investment opportunities exist in Mexico for Massachusetts companies in the clean energy, waste management, and water innovation sectors.  Improving access to clean water for Mexican citizens is a priority, and there is strong interest in increasing energy capacity from solar, wind and biomass, while decreasing dependence on fossil fuels.

These are likely areas of focus for a Massachusetts trade mission to Mexico now being planned for the fall.  The last Massachusetts trade mission to Mexico occurred in 1999, when then Lt. Governor Jane Swift led a delegation to Mexico City and Monterrey on behalf of Governor Paul Cellucci.

In a February 2013 New York Times op-ed, Tom Friedman predicted, “Mexico will become a more dominant economic power than China or India in this century.”  Even if wide of the mark, Friedman’s bet suggests that Mexico, with which the US shares the world’s busiest border, is rising in prominence and influence:

  • Mexico is Massachusetts’ sixth largest export commodities destination, behind Canada, the UK, Germany, China and Japan.
  • Massachusetts exports to Mexico have increased steadily over the past few years, totaling $1.6 billion in 2012.  Those exports are a bright spot in the Massachusetts trade numbers, as trade with Europe has decreased since 2011.
  • Massport has identified Mexico City as one of the top priority destinations for direct air service to and from Boston.
  • Mexico is committed to free trade, as exemplified by its forty-plus Free Trade Agreements (including NAFTA) with countries around the world. Tariffs have been further reduced over the past six years.
  • If you think your flat screen TV or Blackberry came from China, think again - Mexico is the largest exporter in the world of flat screen TV’s and Blackberrys, and is the fourth largest exporter of automobiles.
  • Fifty percent of Mexico’s population is under 30; interest among young people is strong in US and other foreign brands.
  • Production sharing between the US and Mexico benefits the US economy.  Under production sharing, the same components/parts may cross the border numerous times as the end product is being assembled.  Some experts estimate that imports to the US from Mexico are 40 percent made in the U.S.  This stimulates both economies and results in job creation in both countries. 
  • Although Brazil gets a lot of press as the big economic player in Latin America, Mexico’s economy grew faster than Brazil’s over the past two years, and Mexico is responsible for 60 percent of the exports to US from all of Latin America
  • Net immigration between the US and Mexico is at zero percent today, casting doubt upon the commonly-held belief that illegal border crossings from Mexico are the biggest news in the US-Mexico relationship. Now, it’s all about the economy.

Topics: International Trade, Business Center

Patrick Announces Manufacturing Partnership Academy

Posted by Andre Mayer on Jun 20, 2013 2:09:00 PM

Governor Deval Patrick today announced the creation of a first-in-the-nation Advanced Manufacturing Regional Partnership Academy to provide resources to improve the training of skilled workers for manufacturing jobs across the commonwealth.

Manufacturing“Advanced manufacturing is an area of critical focus, one that can help us put people to work now and prepare our workers for the jobs of the 21st century global economy,” the governor told some 500 industry professionals attending the Advanced Manufacturing Summit at Gillette Stadium in Foxboro.

“It is central to our strategy of investing today in order to create a stronger commonwealth for the next generation. Through the Advanced Manufacturing Regional Partnership Academy we are helping employers gain direct access to the talented workers that will strengthen their businesses.”

The Academy will collect and share best practices locally and nationally, creating models for education, training and workforce development efforts in support of advanced manufacturing that are appropriate to each of the state's regions. The Advanced Manufacturing Collaborative, which includes many AIM member companies, is working with MassDevelopment, the Executive Office of Labor and Workforce Development’s Commonwealth Corporation and the University of Massachusetts to build the Academy.

The state's resurgent manufacturing sector, facing a wave of retirements from its aging workforce, will require some 100,000 new skilled employees over the next decade.

“With great job and career options available to workers, particularly younger potential employees, our manufacturing industry is creating economic opportunity for everyone in Massachusetts,” said Greg Bialecki, Secretary of Housing and Economic Development.

“Through the Advanced Manufacturing Regional Partnership Academy we are creating better connections and potential success for both companies and employees.”

Workforce development was a major focus of the summit, which also offered sessions and workshops on supply-chain opportunities, domestics and international marketing, access to capital and technology, and other topics.

Governor Patrick told the summit that manufacturing continues to undergo a “quiet renaissance.”

“It’s time for that renaissance to be a lot less quiet,” he said.

Topics: Business Center, Manufacturing

Does Your Company have a Sales Culture?

Posted by Jack Derby on Jun 18, 2013 2:01:00 PM

(Jack Derby is a venture capitalist and  leader of the annual AIM/Derby Sales Management Boot Camp.)

I was sitting with the senior team at a company recently prepping for a sales and marketing planning meeting.

As we were going through topics, the newly promoted president commented that this business really wasn't that complicated, and that we just needed to do two things:

  1. Sales ManagementSell more new accounts
  2. Retain and expand existing customers

I realized that he's unnervingly correct. 

The work of sales really isn't that complicated, since it comes down to the basic meat and potatoes of hunting for new territory; farming the land that we already own; plus defining a dynamic sales culture of winning.

These tenets of sales success are basics, of course, as seen from the seller's side of the table.  The opportunity for us as salespeople is to turn these basic practices of hunting and farming into buying decisions. How? By focusing on selling the financial value that we create through our products and services. 

What makes the highly intertwined worlds of sales and marketing more exciting and more of an opportunity today than ever before is the fact that we can get to the value proposition discussion efficiently by adding formalized sales processes and technology tools that employ social media and highly targeted marketing.  As a result, we can create environments that optimize the selling process and enable our salespeople to become much more effective.  

But what about your company’s sales culture?

The CFO of the company I was meeting with offered several observations on culture:

  • We can do a lot better;
  • Let's make sure that everyone is totally engaged;
  • Ensure a culture of urgency and speed everywhere;
  • Create an increased commitment to support the entire team;
  • Give the sales team confidence in their skills, an objective that may require more training; and
  • No one in sales should be just parsley for the meal - sitting pretty on the sidelines.

Your culture question for the day...

If you had to list the top two - and just two - culture improvements that you would like to make in your sales organization for the second half of the year, what would they be?  
What would it take to make sure that everyone in the organization was focused on the company's objectives and that no one was just parsley and not an active part of the team's engagement for sales optimization?  A few ideas:

  • Bring the sales culture question up at your sales meeting next week;
  • Come to agreement on the need for taking your culture to the next level;
  • Take a half day in July, once the quarter has ended;
  • Agree on the specific tactics and tools that you're going to employ; 
  • Agree on the specific tools with which you plan to enable your salespeople;
  • Execute.  

It's no more difficult than that to get everyone totally engaged and living the culture that you want.  Do that for six months, and then do a culture check at your 2014 kickoff sales meeting.

Remember, it's your personal leadership that will define what you want your sales culture to be.

Learn More about the Sales Management Boot Camp, October 6-8

Topics: Business Center, Sales Management

Teachers Hold Key to Improving Computer Skills in Massachusetts

Posted by Andre Mayer on Jun 12, 2013 4:12:00 PM

Massachusetts' economic future depends on computing expertise, yet our schools are not teaching students these vital skills. On Wednesday morning, the Massachusetts Legislative Tech Hub Caucus, co-chaired by Senator Karen E. Spilka (D-Ashland) and Representative Kathi-Anne Reinstein (D-Revere), heard from the Massachusetts Computing Attainment Network (MassCAN), an industry-led coalition, about the dimensions of this problem, and its proposed solutions.

Computer ScienceSteve Vinter, Cambridge site manager for AIM-member Google, presented an overview of the issues. When we think of STEM (science, technology, engineering, mathematics), he pointed out, we should think first of computing, which will account for 71 percent of new STEM jobs. These jobs are of various kinds (hardware, software, IT services, network communications), are found in virtually every sector of the economy, and tend to pay well. Yet few high school students take the computer science Advanced Placement test, and college degrees awarded annually in the field fall far short of demand – unlike other subjects.

Massachusetts technology standards for public schools, Vinter noted, are the best in the country, but they address computer literacy, not computational thinking. MassCAN is pressing for statewide computing standards along with a curriculum that satisfies those standards; professional development programs to prepare teachers for teaching computing; and an informational campaign to make students, parents, and educators aware of the importance of computing.

We are already hearing objections. Resources and time are lacking, and we should blend computing into existing courses, says Education Commissioner Mitchell Chester. Let's avoid a top-down mandate and try pilot programs, suggests former education secretary Paul Reville.

These arguments, it seems to me, are theoretical rather than practical. First, let's be clear about the costs.  In education, the main cost is always personnel; hardware and software are small expenses compared to the retraining of teachers to teach and use technology. Second, if the state is imposing new mandates that do not include computing, then we can be pretty sure that computing will fall by the wayside – and this is true not only in the schools themselves, but in teacher preparation as well.

In fact, this would seem to be an ideal time for concerted, decisive action. We are in a period of demographic transition for our teaching workforce, with an opportunity to bring in large numbers of computer-savvy teachers. Hiring practices in schools and districts, and curricular decisions at teacher-training institutions, are important.

But the state, which sets standards for teacher certification, has a primary role as well. If we delay on computing standards for k-12 students, we will pay a price – but if we do not act now on expectations for their future teachers, we will miss our best chance for change.

Topics: Computer Science, Business Center, Education

Life Sciences Intern Challenge Leads to Significant Discoveries

Posted by Brian Gilmore on Jun 11, 2013 12:08:00 PM

Massachusetts graduate student Brian Dutra recently won first place at an international engineering competition for his research on acoustics in the bloodstream. Applications of his research include the detection of cancer cells in the bloodstream, filtering contaminants out of polluted water, and separating algae-based biofuels from biomass.

Molecular Structures.SmallDutra performed his groundbreaking research as an intern at a local company, FloDesign Sonics, in Wilbraham, Mass. He completed his internship through the Massachusetts Life Sciences Center’s (MLSC)Internship Challenge program.

The Challenge provides students and recent college graduates with hands-on work experience through paid internships at life sciences companies across the state.

AIM members like Albright Technologies of Leominster, Mass., have participated. Since 2010, Albright Technologies has hired seven interns subsidized by the MLSC.

“Since first participating in the Internship Challenge, we have permanently hired two of our interns as Project Managers," said Bob Waitt, President of Albright Technologies.

“All three of our engineers started at Albright as interns, two of them as part of the Massachusetts Life Sciences Internship Challenge. Their hard work and dedication has contributed to 31 percent growth since 2011,” Waitt said.

The MLSC’s Internship Challenge enables life sciences companies of 100 or fewer employees in Massachusetts, or 250 or fewer worldwide, to identify and hire interns interested in developing their careers in the life sciences industry. The MLSC maintains an online portal to help companies find qualified interns, and reimburses companies for their interns’ salaries, up to $7,200 per intern. Larger life sciences companies may source interns through the MLSC’s online portal, but are not eligible for reimbursement.

In addition to exposing local life sciences companies to top-rate talent, this program provides opportunities for students to immerse themselves in the pharmaceutical, biotechnology, medical device, diagnostics and bioinformatics industry sectors.

Since the program first launched in 2009, the MLSC has placed nearly 1,200 interns with 335 companies. Many of these interns have indicated that their MLSC internship helped them decide that they would like to pursue a career in the life sciences.

In 2012, the MLSC received federal grant funding to support the expansion of the Internship Challenge program. The MLSC will receive $800,000 over four years as part of a $5 million grant awarded to the City of Boston from the U.S. Department of Labor intended to grow and maintain the area’s life sciences workforce. The Internship Challenge is now serving as a model for the establishment of similar programs at the Massachusetts Clean Energy Center and the Massachusetts Technology Collaborative.

To learn more about the MLSC’s Internship Challenge program, click here.

Topics: Life Sciences, Business Center, Training

Four Years into Recovery, Why Don't Employers Feel Better?

Posted by Andre Mayer on Jun 7, 2013 11:16:00 AM

The "Great Recession" ended four years ago. The National Bureau of Economic Research tells us that the 18-month contraction – the longest since the Great Depression (1929-33, 43 months) – ended in June 2009 and has since given way to an ongoing expansion phase that has been less than convincing.

Stock indices have regained pre-recession levels, but real estate values have not. The country has recouped only about 70 percent of its lost jobs, and even in Massachusetts, where employment is all the way back, the unemployment rate remains high. Real personal income is not quite where it was. While aggregate corporate profits are at record highs, many companies are struggling.

AIM’s monthly Business Confidence Index traces the course of the recovery from the perspective of Massachusetts employers. The chart below shows monthly readings from February 2009, when the Index bottomed out at 33.3, through May 2013 when it stood at 52.1. (The Index, initiated in July 1991, is scored on a 100-point scale with 50 as neutral; 33.3 was its all-time low, while its peak was 68.5 in 1997-98.)

BCI Graph

The chart divides into two patterns.

From the bottom in early 2009 there is an almost unbroken 20-point upgrade to a clearly positive reading of 53.7 in June 2010. This was the period when the national economy turned the corner, and the financial system stabilized. It is also the span when the fiscal stimulus program was in full force – an effort that emerges as effective but inadequate (and indeed the severity of the downturn was not fully grasped at the time).

Since then, for almost three years we have a saw-tooth pattern, never exceeding 57.1 and falling below 50 on several occasions. The drops coincide with federal fiscal action or inaction: the end of stimulus, deadlock over the debt ceiling and the “fiscal cliff,” tax increases and spending cuts.

Why, even after three consecutive monthly gains, is the Business Confidence Index down 4.7 points from last May?

"Disappointment, unevenness, and uncertainty," suggests Raymond G. Torto, Global Chief Economist at CB Richard Ellis Group, Inc., the chair of AIM’s Board of Economic Advisors.

"Employers are disappointed that the recovery has been so slow, and has generated so little economic momentum. Its benefits have varied greatly by industry sector, geographic region, and firm size – there is considerable evidence that large companies have generally fared better than small ones. And beyond the direct business impact of tax increases and government spending cuts, there are persistent doubts about the effectiveness of policy leadership on economic affairs, domestically and internationally."

Growth, strong at the start of the year, weakened in recent months as fiscal drag – tax increases and government spending cuts – holds back a fairly vigorous private-sector economy. Massachusetts has outperformed the nation throughout this cycle in the statistics and in AIM’s Index but faces headwinds from poor conditions in major European export markets. Forecasts do, however, show growth picking up later in the year and into 2014-15.

The key question is whether the U.S. will achieve enough sustained growth to put our underutilized productive capacity back to work. Today’s May Employment Situation release from the Bureau of Labor Statistics puts the national unemployment rate at 7.6 percent, and the U-6 rate, which includes the unemployed, underemployed, and marginally attached/discouraged workers at 13.8 percent.

The evidence of a recovery is there, but too many people (and capital assets) are not participating. If we cannot achieve above-average expansion to bring us towards the pre-downturn trend line, the long-term cumulative impact of the Great Recession will be great indeed.

Topics: Business Center, AIM Business Confidence Index, Massachusetts economy

Bay State Manufacturers to Share Strategies for Success

Posted by Andre Mayer on Jun 5, 2013 3:48:00 PM

Nypro of Clinton and Custom Group of Woburn have created in-house programs to develop manufacturing skills – and opened them to other employers. Smaller firms like C&G Machine Tool of Granby also succeed by developing the skills of their employees.

ManufacturingAll of these companies and many others will their experiences in workforce development at the first statewide Advanced Manufacturing Summit on Thursday, June 20 at Gillette Stadium in Foxborough.

Airxchange of Rockland, with more than 30 years of experience manufacturing energy recovery ventilation components, knows about energy management. From different perspectives, so do Barrett Distribution, with a new $2 million photovoltaic system in its Franklin warehousing facility, and Blount Fine Food of Fall River, whose premium refrigerated and frozen products depend on reliable power at competitive cost. These AIM members will also be at Gillette Stadium.

Health Enterprises of North Attleboro hardly ranks among the major global pharmaceutical companies – yet it exports its innovative consumer healthcare products to more than 50 countries on six continents. How do they do it? They'll explain.

"Advanced manufacturing" is more than a buzzword – it's a reality, with many aspects. The all-day event on June 20, presented by the Massachusetts Advanced Manufacturing Collaborative and sponsored by MassDevelopment, will bring together hundreds of executives and managers from the manufacturing industry to share best practices, network, and discuss future opportunities and challenges.

The Summit will offer panels of large manufacturers focused on key customer groups – aeronautics, defense, life sciences, energy, electronics, industrial, and early-stage. Featured speakers include Governor Deval Patrick; Martin Meehan, Chancellor of the University of Massachusetts-Lowell; Timothy Murray, President of the Worcester Chamber of Commerce; and Martin Schmidt, Professor and Associate Provost at MIT, reporting on the forthcoming report on Production in the Innovation Economy.

The Summit runs from 7:45 a.m. to 4 p.m., followed by a networking reception. The registration fee is $50, which includes a continental breakfast and lunch. Further information and online registration is available at

Topics: Business Center, Manufacturing

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