August 3, 2018

Worcester area economy grows by 2.5%

Photo/Grant Welker
The Worcester skyline. The area's economy grew by 2.5 percent in the second quarter: a slower rate than the national one but faster than the past year for this area.

The Worcester area economy grew by 2.5 percent in the second quarter, beating the pace of growth seen at any point in the region in the past year.

The data, released this week by Assumption College Professor of Economics Thomas White, shows a strengthening economy in and around Worcester, with improved employment numbers during the quarter.

Greater Worcester's economic growth still trailed the rest of the nation, which grew in the quarter by 4.1 percent, according to the Bureau of Labor Statistics. That was the strongest quarter since 2014.

Locally, the economy strengthened on the back of better employment and unemployment numbers, which help form the Worcester Economic Index as White measures it.

"Even after accounting for the usual upswing in employment at the start of the summer," White said in the report, "both the U.S. Bureau of Labor Statistics payroll and household surveys showed net increases in the number of jobs. And the strong labor market continues to bring new entrants into the labor force."

The biggest increases in jobs in Greater Worcester was in business services and construction, as well as manufacturing and health services. The financial, information and wholesale trade sectors contracted slightly.

Growth is expected to slow a bit, nationally and in Greater Worcester. The Worcester Economic Index is projected to slow from 2.5 percent to just 1.9 percent through the next six months.

"The leading indicators used in the forecast are not signaling much change moving forward. Credit market conditions, which seemed to have improved recently, and the momentum exhibited by the (Worcester Economic Index) itself are two components that are giving a bump to the forecast," White said. "The continued tightening of monetary policy by the Federal Reserve has reduced the interest rate spread, the only component currently having a negative impact on the forecast."

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