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After a slow patch, hiring likely to pick up

The Massachusetts economy has slowed in recent months, but economists expect it to regain momentum near the end of the year, spurring an uptick in hiring.

In recent months, federal budget cuts and a weakening global economy have weighed on job growth in the state. The unemployment rate rose to 7.2 percent in July, the highest level in nearly two years.

But rebounds in housing and consumer spending are expected to help bring the state through the soft patch, providing a boost to construction and consumer-related industries.

Construction employment grew 4 percent over the past year, more than three times faster than total state employment and faster than any other major sector, according to state data. Michael Goodman, a professor of public policy at UMass Dartmouth, said the strengthening housing market should further bolster construction hiring.


In July, sales of Massachusetts homes reached their highest level in seven years, according to Warren Group, which tracks real estate data. Single-family home sales jumped 18.5 percent from a year earlier.

“There is good reason to believe,” Goodman said, “that you can expect to see a response in construction to the housing market.”

The New England Economic Partnership, a nonprofit forecasting group, projects that construction will experience the strongest job growth over the next five years, increasing employment by more than 25 percent by the end of 2017.

“Construction was hit hardest in the recession,” said Alan Clayton-Matthews, a Northeastern University economics professor. “Over the coming years it will add the most jobs, and that will be restoring the jobs that essentially were lost in the recession.”

Other industries that drive the state’s economy are also projected to experience solid job growth. Employment in professional and business services is forecast to grow more than 13 percent over the next five years. Leisure and hospitality is projected to increase employment by nearly 12 percent.


Jobs in education and health services are expected to increase 9.5 percent.

Aaron Green, founder of the Professional Staffing Group, a Boston employment firm, said his company has seen a consistent stream of hires across several industries this year.

“It probably feels a little bit better than what the numbers are showing,” Green said.

But while hiring should pick up early next year, Goodman said the short-term outlook is less favorable. Goodman attributes this slowdown to a struggling economy in Europe, to which Massachusetts sends about 40 percent of its exports, and federal budget cuts for defense, research, and other programs important to the state.

“The housing market, the consumer spending are the sails,” Goodman said, “and the fiscal policy and the international struggles are the anchor dragging behind.”

Emily Overholt can be reached at emily.overholt@globe.com.