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Experts see economy on rebound, but challenges ahead


By Jack Minch


LEOMINSTER — While the economy is improving on the local and national levels, 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 the Nashoba Valley Chamber of Commerce and Greater Gardner Chamber of Commerce to organize the annual economic forecast breakfast at DoubleTree by Hilton.

“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 consumer and business confidence, panelists said.

“The good news is in a lot of respects the economy is going well both in Massachusetts and nationally,” said UMass Dartmouth Associate Professor Michael Goodman, who chairs the university’s public policy department.

Fidelity commissioned a direct survey by Princeton Research Associates of 200 businesses and 200 consumers in Massachusetts that found most consumers believe the economy will be somewhat better in the next year, said Fidelity Bank President John Merrill.

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.

The number of consumers who list employment as their biggest concern fell from 32 percent in 2013 to 24 percent this year. Those concerned 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 have trouble 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 has not healed, said Federal Reserve Bank of Boston Executive Vice President and Senior Policy Advisor Jeffrey Fuhrer.

Companies are still resistant to invest in overhead costs because they learned during the 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 household wealth is improving, as is the country’s relationship with trade partners, such as Japan.

“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, meanwhile, is falling, but “is not back to normal yet,” said Fuhrer.

Fuhrer noted that the longer workers are unemployed the less chance they have of finding work. Goodman agreed that long unemployment is difficult professionally.

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.

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.

“The housing market isn’t bouncing back the way it should,” she said.

Follow Jack Minch on Twitter @JackMinch.