July 16, 2020
Services sector accounted for 15% of PPP loans in Central Mass.
Photo | Grant Welker
The Guaranty Building in downtown Worcester
By Grant Welker
The Central Massachusetts services sector, a broad industry ranging from lawyers to graphic design, brought in more federal Paycheck Protection Program loans related to the coronavirus pandemic than any other, according to federal data.
The services industry attracted more than 2,600 loans — which can become forgivable if they're used to maintain employment — or nearly 15% of all loans that came into the region.
Health care and social assistance, the area's largest industry by number of employees, received just over 10% of local loans. Manufacturing, the biggest industry by gross domestic product, brought in just under 7%, according to a Worcester Business Journal review of U.S. Small Business Administration data.
The services industry also includes certified public accountants, building inspection services, computer programming, research and development, advertising and public relations, among others. Although it's a broad industry, it isn't one of the biggest in the Worcester metropolitan area, according to government workforce data.
The services sector didn't get quite as large a share nationally, according to a review of federal data by The Wall Street Journal. The Journal found health care and social assistance to have won the largest share of loans at 12.9%, narrowly edging out services at 12.7% and construction at 12.4%.
What may likely account for the difference is how large area healthcare and education employers are, among others.
The aid program was generally limited to businesses with 500 or fewer employees, leaving out Central Massachusetts giants in those industries including UMass Memorial Health Care, Fallon Health, Saint Vincent Hospital, and Worcester Polytechnic Institute, each of which has more than 500 employees, according to the Massachusetts Executive Office of Labor and Workforce Development. Some major manufacturing employers are also too large, including IPG Photonics, Saint-Gobain, Tyco SimplexGrinnell and L.S. Starrett.
Accommodation and food services, a sector including restaurant and hotel workers, claimed by far the most jobs retained in Central Massachusetts thanks to the PPP funding, with more than 25,000. That sector has also seen among the highest unemployment claims across the state since the pandemic began.
Following the accommodation and food services sector, Administrative services, agriculture, arts and entertainment, and construction easily led all other industries in the most amount of jobs claimed to be saved because of the federal funds. The reporting is inexact, though. In the case of more than 1,400 recipients, for example, no jobs were claimed to have been retained. In other cases, employers leave that indicator blank.
The U.S. Bureau of Labor Statistics groups industries differently, but the office's latest report for May shows other industries as having lost more jobs in the past few months.
Employment in the Worcester metropolitan area — which doesn't include most MetroWest communities but does include Connecticut's Windham County — has been hardest hit in leisure and hospitality, which has lost more than 16,000 since March, or nearly two-thirds of its workforce, according to the Bureau of Labor Statistics. Education and health services lost more than 11,000 jobs, or 16%.
Professional and business services, on the other hand, has lost 900 jobs, or 3%, in that time. About 100 financial activities jobs have been lost, or less than 1%. Total nonfarm employment in the Worcester metro area rebounded slightly in May from April but remains down by 38,800 workers, or 13%, from March.
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