December 25, 2017
Economic Forecast 2018

WBJ readers expect mild economic growth in 2018

The Worcester Railers' inaugural season, which started Oct. 14, points to the optimism of the Central Massachusetts business community, as President Michael Myers and the rest of the team believe the economy has grown to the point to support professional hockey, even though two other teams have tried and failed in the last two decades.

The motto of the Central Massachusetts business community might as well be, "Cautiously optimistic."

Dating back to 2012 in Worcester Business Journal's annual Economic Forecast survey of its readership, the most popular answer to the question, "How will the economy fare next year compared to this year?" has always been "Improve slightly."

This year, 50 percent of respondents picked that answer (which is the lowest it has been since 2012, when it was also 50 percent), but the number of people who ventured a little further out in their predictions and said the economy would "Improve significantly" rose to 15 percent, which is the highest portion of the vote that response has ever gotten.

"Cautiously optimistic" could, of course, be the mantra of the entire U.S. economy since the end of the Great Recession. While certain industries and geographies have grown faster than others, the country as a whole hasn't experienced an undisputed boom in its business output, wages, employment or profits.

That cautious optimism extends to what WBJ readers plan to do with their own companies in 2018, as the Great Recession taught us an economic downturn can force businesses to claw back gains and expansions made in good times.

Despite 85 percent of WBJ readers saying the economy is in better condition today than it was last year and 65 percent saying it will improve either slightly or significantly in 2018, only

• 40 percent said they would hire new staff next year;

• 49 percent have expansion plans for 2018;

• 19 percent plan to raise capital in 2018; and

• 28 percent will make an investment in property, plant or equipment next year.

Even though WBJ readers had trepidations about making significant investments in their companies, the majority expect positive years for their businesses: 76 percent say revenue will increase over 2017 and 73 percent expect profits to improve. On the flip side, only 13 percent expected revenue to drop while only 9 percent expect profits to drop.

Sure, WBJ readers may be cautious, but they see the economy moving in the right direction. That's not a bad motto to have.

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