By Jack Minch
LEOMINSTER -- The economic forecast is improving everywhere, from the local to the national levels, but there are a number of challenges still facing North Central Massachusetts, including a stubbornly high unemployment rate, a panel of experts said Wednesday.
The North Central Massachusetts Chamber of Commerce teamed with Nashoba Valley Chamber of Commerce and Greater Gardner Chamber of Commerce to organize the annual economic forecast breakfast at DoubleTree by Hilton.
The panel included Federal Reserve Bank of Boston Executive Vice President and Senior Police Advisor Jeffrey Fuhrer; Great Wolf Lodge of New England General Manager Phillip E. Cunningham Sr.; Fidelity Bank President John Merrill; and UMass Dartmouth Associate Professor and Chairman of the Public Policy Department Michael Goodman.
Fidelity Bank Chairman and CEO Ed Manzi served as emcee.
"We think it's important to bring you information you can use to make decisions," said North Central Massachusetts Chamber President David McKeehan.
Many factors go into determining economic outlook including Inflation, unemployment rates, availability of labor, the housing market and wage growth; as well as perception of consumers and business leaders, panelists said.
"The good news is in a lot of respects the economy is going well both in Massachusetts and nationally," Goodman said.
Fidelity commissioned a direct survey by Princeton Research Associates of 200 businesses and 200 consumers in North Central Massachusetts and the rest of the state that learned most consumers believe the economy will be somewhat better in the next year, Merrill said.
Overall, there's a favorable outlook for North Central Massachusetts and the state, he said.
Residents feel better about their jobs and personal finances; and businesses feel better about their economic opportunities, Merrill said.
Consumer concerns are shifting from employment to energy costs, he said.
Unemployment is still a big concern but the number of consumers who list employment as their biggest concern fell from 32 percent in 2013 to 24 percent this year but the concern about energy and fuel costs has risen from 10 percent to 22 percent during the same period.
Business leaders surveyed said they want to hire more workers but are concerned about finding people with the necessary skills, according to the survey.
A mismatch of worker skills to business needs is a sign that the labor market hasn't healed, Fuhrer said.
Companies are still resistant to invest in overhead costs because they learned during the Great Recession they can make do with fewer workers and less capital investment, Merrill said.
About 8 percent of area business executives said they believe the outlook for business is "much better" but about 46 percent see the outlook for their own companies as "much better," Merrill said.
The biggest perceived challenge for businesses in the survey was corporate and personal taxes followed by the availability of skilled labor.
"It's great that we have that demand but we have to match that demand with supply," Merrill said.
Fuhrer said there is improving household wealth and improvement among national trade partners including Japan, while the drag created by fiscal policies, including issues with the debt ceiling, created by the country's fiscal policies is declining.
"The bottom line is things are OK," Fuhrer said.
The biggest problem with the economy is the low inflation rate, Fuhrer said. Inflation for food and energy are well below the 2 percent rate that the federal reserve wants them at, he said.
The improving real estate market which is returning values to homes is making consumers feel better about spending, he said.
The rate of foreclosures is falling, Fuhrer said.
"It's not back to normal yet," he said.
Fuhrer noted that the longer workers are unemployed the less chance they have of finding work and the labor market's health depends on
Good man agreed that long unemployment is difficult professionally.
"The longer this goes on, the harder it is for those folks to find their way back to the labor market," Goodman said.
The state unemployment recovery is uneven, Goodman said.
The jobless rate for workers under 25 years old was 15.8 percent in 2013 and for those with less than a high school education the unemployment rate was 20.1 percent, he said.
Goodman also said the unemployment rates climb the farther you travel from Boston.
Declining populations are a challenge for developing necessary workforce in the region, Goodman said.
The state's population is aging and declining so it must rely on migration of workers from other regions, he said.
"This is not new for Massachusetts or New England," Goodman said. "We have always relied on migration from other areas."
Before the recession, household debt was averaging about 14 percent but when the economy fell and workers were unsure of their futures they started paying off their bills, Good man said.
That change in behavior slowed the economic growth.
Consumers who spent much of the Great Recession paying off their debts are again spending, Good man said.
The panel discussion was well received by the business community.
"I thought it was very informative and set the stage for the economic environment," said Arlene Betteridge, vice president for Community Health Connections.
The crowd of over 200 people showed the strong interest in the business community, said David Duncan, a vice president for HealthAlliance Hospital.
"They gave all the business owners a pretty good recipe to improve," said David Duncan, a vice president for HealthAlliance Hospital.
Leominster City Councilor Claire Freda, who is a real estate appraiser, said she is concerned by the job market in manufacturing and the housing market.
"In my industry I'm seeing it, the housing market isn't bouncing back the way it should," she said.