Worcester’s Economy Improved in First Quarter
Over the first three months of 2014 the greater Worcester economy picked up speed, however concerns remain with regard to the low number of new home construction permits and new business incorporations, according to the latest estimates of the Worcester Economic Index, which is released each quarter by Assumption College Economics Professor Thomas White, Ph.D.
During the first quarter, the Worcester Economic Index (WEI) increased at an annual rate of 3.9 percent, which is substantially higher than the fourth quarter of 2013, when the WEI increased at a revised 2 percent.
“Each of the components that make up the Worcester Economic Index moved in an encouraging direction over the past several months,” said Professor White. “On a seasonally adjusted basis, local employment is up, and the unemployment rate is coming down.”
The economy is expected to continue to grow at a relatively strong rate over the next three-to-six months. According to the report, the forecast growth of the WEI over the second and third quarters of 2014 is about 3.3 percent on an annual basis. This forecast is based on the past performance of the WEI as well as several leading indicators of the national economy such as consumer expectations, changes in the S&P 500 Index, the interest rate spread, and the Leading Credit Index.
Other local indicators of future economic prospects are mixed. The number of online help-wanted advertisements has continued to rise in recent months, and state-wide initial unemployment claims have been falling, which are both encouraging signs. Not all indicators are positive, however, as the number of residential building permits and new business incorporations have each fallen since the start of 2014.
“Local economic data can be quite volatile, so it is best to look at several indicators and not put too much stock in month-to-month variations of any single variable,” White explained. “Currently, the local leading indicators are neutral with regard to future growth.”
The next Worcester Economic Indicators report will be released in August.
IN THE NEWS
Worcester Business Journal, May 6, 2014: "Report: Worcester Economy to Grow 3.3% Through Summer"
MassLive.com/Springfield Republican, May 6, 2014: "Assumption College Report: Worcester Economy Has Grown 3.9 Percent in 2014"
- GoLocalWorcester.com, May 6, 2014: "Worcester's Economy Improved in First Quarter"
Michael Guilfoyle, Executive Director of Media Relations, Assumption College