February 14, 2019

Economic risks on horizon, Boston Fed economist says

Photo/Grant Welker
Worcester Business Journal's Economic Forecast Forum on Thursday included a panel, moderated by Worcester Business Journal Editor Brad Kane at left, with Nichols College President Susan West Engelkemeyer; Federal Reserve Bank of Boston Executive Vice President and Senior Policy Advisor Jeff Fuhrer; Reliant Medical Group President and CEO Tarek Elsawy; and JLL Senior Vice President and Director of Research Julia Georgules.

A senior policy advisor at the Federal Reserve Bank of Boston said Thursday economic risks sit on the horizon, including slowing economies worldwide, even as signs of economic weakness at home have not yet materialized.

Jeff Fuhrer, an executive vice president and senior policy advisor at the Boston Fed, said at the Worcester Business Journal's Economic Forecast Forum the economic future remains very hard to predict.

"Economic forecasting is slightly worse than weather forecasting," Fuhrer said. "We have the same set of problems."

Economic signs remain mixed, Furher said. The stock market remains below its September high, but the economy added 340,000 jobs in January. Many forecasters predict slower economic growth this year than last, he said.

Fuhrer didn't warn against drastic economic effects of the recent government shutdown, tariffs or even the national debt. More worrisome, he said, might be what appears to be slower growth elsewhere, particularly China.

"The rest of the world seems to be slowing down, importantly China," he said.

Fuhrer was the keynote speaker for the WBJ's annual event, which also featured a panel with Reliant Medical Group President & CEO Tarek Elsawy, Nichols College President Susan West Engelkemeyer, and Julia Georgules, a senior vice president and director of research at the Boston real estate firm JLL.

Engelkemeyer described what she called a sobering time for colleges, with a predicted drop in high school graduates in the years ahead and many smaller schools struggling to survive. Nichols, she said, has been fighting against those trends. It has an all-time high for undergraduate enrollment and has launched two new graduate programs in the last few years.

Elsawy talked about the high rate of spending on health care — nearly 18 percent of GPD, he said — and called it a sign costs need to come down for consumers. Worcester-based Reliant, which has added a series of new outpatient centers across Central Massachusetts in the last few years, has prioritized keeping patient costs low, he said.

Critical is retaining top talent in Central Massachusetts at a time when many don't have to travel far for a better payday, Elsawy said, alluding to the Boston area.

Georgules, who researches the New England real estate market, gave encouragement to Worcester's real estate growth, describing the city as having the right mix of colleges and public infrastructure with attributes to attract people, like breweries or the upcoming move to the city by the Pawtucket Red Sox.

"There is a lot of good stuff happening here," she said.

Georgules encouraged more confidence that projects built in Worcester will attract new businesses and residents, even if economic data doesn't necessarily show viability yet.

"You can't wait for the numbers to tell you it's the right time to do something," she said. "You have to have the faith."

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