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Evan Horowitz | Quick Study

Mass. economy is envy of the Northeast

Once again, Massachusetts has proved to be the envy of all New England and a top economic performer across the Northeast.

New data from the Bureau of Economic Analysis show that the state’s gross domestic product grew 2 percent in 2015, not as fast as you might hope during an economic recovery but far better than the region as a whole.

To find a state with similar economic strength, you’d have to travel to Delaware, and to find a faster-growing peer, you’d need to go as far south as North Carolina or west to Illinois.

It’s true that compared to far-flung parts of the country, Massachusetts’ growth looks rather middling. The US average for 2015 was actually slightly higher, at 2.4 percent, and several states along the Pacific Coast hit growth rates above 4 percent. But the mere fact that Massachusetts is leading its region still counts as good economic news.

What’s the secret to Massachusetts’ economic strength? In large part it seems to be about smarts — a longstanding advantage helped by the fact that we have the best-educated workforce in the country. Last year, the biggest contributors to Massachusetts’ economic success were industries like “professional, scientific, and technical services” and “information.”


The fact that the Bay State’s real estate sector also played a big role is perhaps a less positive sign. While it’s nice that people have money to invest in housing, the Great Recession showed how dangerous an overheated real estate market can be.

As to why the rest of New England isn’t keeping up, one reason was a regional falloff in manufacturing. But the weakness extends far beyond that sector, leaving Maine, Vermont, and Connecticut among the slowest-growing states in the entire country.

At the very bottom are the states knocked back by the collapse of oil prices, resource-dependent places like Alaska and North Dakota. In fact, between 2014 and 2015, North Dakota dropped from the fastest-growing state to the fastest-shrinking one.


For Massachusetts, the big question is how long the state can keep it up. We’ve been a leading economic force in the Northeast since the recession, but we’re also entering our 10th year with a substantial budget deficit. Unless we can fill that hole, it’ll be hard to make the kinds of long-term investments in schools and public transit that are vital to ensuring that Massachusetts will remain in the economic vanguard for decades to come.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at Follow him on Twitter @GlobeHorowitz