December 24, 2018
Economic Forecast

Expect a healthy Central Mass. economy in 2019

Jerry Sargent, president of Citizens Bank for Massachusetts.

Central Massachusetts has progressed on many fronts this year. From a business perspective, regional leaders are watching key issues, with a reliable and efficient transportation system and regional economic growth topping the list. Other priorities include education, housing, and a skilled and trained workforce.

As 2018 draws to a close, it is important to recognize the strides made over the past year in technology, housing, green initiatives and city planning. For instance, Greater Worcester's restaurant scene continues to generate headlines, as new locales open up, with Boston chefs seeking to bring their expertise to the area. Other stories include the new development around the CitySquare project and, over the summer, 16 Central Massachusetts companies were included in Inc. 5000's list of the fastest growing companies in the country.

The Central Massachusetts business community has changed significantly over the past several years, and the momentum should continue. In 2019, the region can expect more investment, given its relative accessibility and lower cost of living, as well as the presence of nine colleges and universities alone producing a young and educated workforce.

Meanwhile, Worcester Polytechnic Institute, Clark University, the College of the Holy Cross and other higher education institutions continue to be key clean energy players in Worcester County. The UMass Medical School remains the commonwealth's only public medical school and was a top-ranked school by the U.S. World News & Report for primary care. Also on the education front: the state's funding formula for public schools remains controversial, especially for Gateway Cities, and Worcester will likely continue to lead the charge for an overhaul.

The recent election could benefit our region: Congressman Richard Neal (D-MA) is now poised to chair the powerful House Ways and Means committee. The passage of any infrastructure package, including connecting Springfield and Boston by rail, would go through him. And now Congressman Jim McGovern (D-MA) will likely chair the House Rules committee. Worcester – McGovern's hometown – would benefit from any Springfield route.

Central Massachusetts planners are generally in consensus regional car traffic is increasing, as the economy improves and more people migrate to the region. There are calls for infrastructure improvements to match the increased demands. Suffice to say: Transportation will be a major driver.

Likewise, regional commercial and residential properties are doing well. Worcester is booming right now for tech, biomedical and specialty manufacturing businesses. The Massachusetts Biomedical Initiatives incubator operates in 27 private laboratories with 76 percent of its participants succeeding, generating 576 jobs and contributing more than $760 million to the local economy. Biotech firms such as the New York-based Mustang Bio at the UMass Medicine Science Park and China-based WuXi Biologics at the newly created Worcester Biomanufacturing Park have planted flags in Central Massachusetts. And city officials have greenlit $2.6 billion in recent construction – new housing, retail and restaurant space.

Framingham-based TJX Cos. has kept growing while other retailers have shrunk or closed, defying the odds. Its success highlights the overall strengths of the Central Massachusetts business environment.

And, finally, this summer's highest profile news was the City of Worcester and Pawtucket Red Sox's agreement on a large-scale redevelopment project in the Canal District, requiring the city to borrow nearly $101 million. This has the potential to remake a significant portion of the local economy: A total of $240 million will be invested across 18 acres in the form of two hotels, 225 market-rate apartments, 65,000 square feet of retail/restaurants and a parking garage. (A second phase calls for 200,000 square feet of office and mixed-use development.)

With ballpark construction slated to begin in July – and anticipated completion in time for the start of the 2021 MiLB season – the WooSox will remain one of the region's top economic topics in 2019 and beyond.

Jerry Sargent is president of Citizens Bank for Massachusetts.


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