Massachusetts has seen an financial slowdown since 2020, with the skilled, scientific, and technical providers sector arduous hit all through the state, in line with a brand new Pioneer Institute report launched Thursday.
“Massachusetts’ flagging leadership in the professional, scientific, and technical sectors is clear and troubling,” mentioned Aidan Enright, Pioneer analysis affiliate and writer of the report. “It is the engine of Massachusetts’ innovation economy. Continued inaction on longstanding barriers to growth, like housing and taxes, leaves the state less able to compete for talent and investment —and even more vulnerable to new federal policy pressures.”
The report, titled “Massachusetts at Risk: GSP Growth Slows Relative to Competitor States,” reveals that although Massachusetts stays one of many “most economically productive states in the nation,” however the development of the state’s Gross State Product (GSP) has slowed “significantly” over the previous 5 years.
Researchers drew on knowledge from the U.S. Bureau of Financial Evaluation and Census Bureau.
Massachusetts’s personal sector per capita actual GSP grew by 12.5% from 2020 t0 2024, the report said, lagging behind the nationwide common of 13.3% for the interval.
Between 1998 and 2019, the state had the fourth-highest development price within the nation, Pioneer Institute analysis discovered. Comparatively, Massachusetts ranked twenty eighth within the financial development metric between 2020 to 2024.
Regardless of the slowdown, Massachusetts nonetheless holds the second-highest actual GSP per capita within the nation at almost $90,000 in 2024 “thanks to its concentration of advanced industries and world-class elite educational institutions,” the report said, behind solely New York.
This slowdown “appears different” from earlier lags, the institute argued.
“Unlike previous downturns, today’s challenges are structural: weak private sector job growth (among the slowest in the country), a severe housing affordability crisis, anemic rates of new development activity and slow permitting, an aging labor force, and sustained net outmigration—particularly among younger and higher-income residents,” the report states.
Comparable “high-cost states” like Connecticut, Illinois and New York additionally confirmed slowdowns within the 2020 to 2024 interval, although California did outpace the nationwide common at 14.8%, the Pioneer Institute said.
Different states cited confirmed greater actual GSP development, together with Florida 26% and Texas at 22.3%, over the identical interval.
“The Trump administration’s actions on NIH grants and tariffs will create a significant drag on Massachusetts’ growth,” mentioned Jim Stergios, govt director of the Pioneer Institute. “But it’s our own policies that are driving up housing costs and pushing residents and employers out.”
The report cited threats on the federal stage like jeopardized medical analysis funding and exports and “stymied investment from high interest rates and economic uncertainty.”
Massachusetts’s skilled, scientific, and technical providers sector grew on a 24.8% per capita foundation from 2020 to 2024, the report said. However the state was outpaced once more in states like Texas, 36.7%, Florida 36.9%, North Carolina 38.2%, and Washington 45%.
The state’s share of the nationwide GDP within the sector declined total by 6% throughout the interval, the Pioneer Institute mentioned.
Pioneer’s launch Thursday cited their Could report on personal employment development, which ranked Massachusetts third worst within the nation for personal sector job creation since 2020.
