Slow Going For Bay State Economy—Tech A Small Bright Point

In the face of a declining housing market, the high costs of gasoline and heating oil, and fallout from the subprime mortgage debacle, third-quarter 2007 growth estimates for the Massachusetts economy have been revised downward, according to MassBenchmarks Current Economic Index figures released today. The outlook is for slower growth in the first half of 2008, although the press release about the data said the sluggishness could be partially mitigated by growing demand for the high-technology products and services in which the area excels.

The Bay State economy grew at an annual rate of just 3 percent in Q3, according to the revised data, down from the 3.6 percent rate originally predicted. By contrast, the U.S. gross domestic product (GDP) grew at a 4.9 percent rate, noted MassBenchmarks, which is published quarterly by the University of Massachusetts Donahue Institute in cooperation with the Federal Reserve Bank of Boston.

The forecast for the first half of 2008 was even gloomier, with the MassBenchmarks Leading Economic Index indicating that the state’s economy is expected to grow at an annualized rate of a fairly anemic 2.2 percent between November 2007 and next May. State economic growth has slowed since the first quarter of last year, when it achieved a 4 percent growth rate, the report said.

“On a positive note,” the press release continued, “there is growing national and worldwide demand for technology-based products and knowledge-based services that Massachusetts supplies. These include information processing equipment and software, pharmaceuticals, biotechnology, scientific research and development, consulting, engineering, and financial services.”

Author: Robert Buderi

Bob is Xconomy's founder and chairman. He is one of the country's foremost journalists covering business and technology. As a noted author and magazine editor, he is a sought-after commentator on innovation and global competitiveness. Before taking his most recent position as a research fellow in MIT's Center for International Studies, Bob served as Editor in Chief of MIT's Technology Review, then a 10-times-a-year publication with a circulation of 315,000. Bob led the magazine to numerous editorial and design awards and oversaw its expansion into three foreign editions, electronic newsletters, and highly successful conferences. As BusinessWeek's technology editor, he shared in the 1992 National Magazine Award for The Quality Imperative. Bob is the author of four books about technology and innovation. Naval Innovation for the 21st Century (2013) is a post-Cold War account of the Office of Naval Research. Guanxi (2006) focuses on Microsoft's Beijing research lab as a metaphor for global competitiveness. Engines of Tomorrow (2000) describes the evolution of corporate research. The Invention That Changed the World (1996) covered a secret lab at MIT during WWII. Bob served on the Council on Competitiveness-sponsored National Innovation Initiative and is an advisor to the Draper Prize Nominating Committee. He has been a regular guest of CNBC's Strategy Session and has spoken about innovation at many venues, including the Business Council, Amazon, eBay, Google, IBM, and Microsoft.