November 6, 2018

Worcester area economy grew at 4.1% annualized rate

Photo/Grant Welker
Construction of the Trolley Yard commercial plaza in Worcester. The area's economy grew in the third quarter by the most in at least five years.

The Greater Worcester economy grew by a 4.1-percent annualized rate in the third quarter, its highest in at least five years, according to an Assumption College report Tuesday.

The Worcester Economic Index, which Assumption economics professor Thomas White releases, estimates local economic activity based on recent Worcester-area employment and unemployment data.

"The September numbers are particularly interesting," White said. "Normally, employment estimates fall in September from seasonal factors, but preliminary estimates from the Bureau of Labor Statistics household survey show employment actually rising during the month. This is a sign of a healthy labor market."

The most promising statistic may be new business incorporations, which White said increased nearly 10 percent since the third quarter of 2017. Local employment was also up year-to-year by 3 percent. The Worcester metropolitan area's unemployment rate for September was 3.4 percent.

The strong quarter was the best since at least the third quarter of 2013, White's report shows. He predicted strong but slightly slower growth in the next six months at 3.1 percent annualized growth.

"The strong forecast is due more to the momentum from recent economic growth than to positive leading indicators," White said. "Credit market conditions continue to give a boost to the forecast, but the recent slump in stock prices, along with continued tightening of monetary policy is preventing the forecast from being even more optimistic."

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