Good news and bad news.
Good news first.
A top fiscal watchdog says Massachusetts’ economy is wicked strong.
The state’s wage and salary annual growth in recent years have outpaced the national average.
Wages in almost every Massachusetts industry outperform the United States as a whole.
Massachusetts’ per capita gross domestic product, a measure of its total economic output, is the highest of any state in the nation.
And in 2016, nearly half of people 25 and older here had a bachelor’s degree, way ahead of the country’s average rate.
Also: Massachusetts “has become an attractive place to live and work,” Moody’s Investors Service says in a new report.
Now, bad news.
Moody’s, a top bond-rating agency, says the state’s “debt and pension liabilities are among the highest in the nation.”
Massachusetts has been able to keep pace paying off those debts because of the good economy. But Moody’s forecasts economic growth could get sluggish.
“A slowdown may be on the horizon,” it says in a new report.
An aging workforce, for one.
The state’s number of 25- to 54-year-olds has declined by 4.5 percent since 2000, according to Moody’s. That’s a “striking contrast” with the country as a whole, which saw a 4 percent growth rate of that cohort over the same period.
Traditionally, a key attribute of a healthy economy is working-age people earning money, spending their money, and having a chunk of it flow to taxes, Moody’s Genevieve Nolan said in a telephone interview. Older people, sometimes on fixed incomes, tend to spend less money and consume more resources such as health care. When the balance is off, it can hamper economic growth.
If the economy slows down, “It may put the state in a position of having to make difficult budgetary decisions to accommodate its elevated fixed costs while maintaining adequate service delivery and balancing annual budgets,” Moody’s said in the report.
State Representative Jeffrey Sánchez, a Boston Democrat and the House’s top budget-writer, said Massachusetts has a high debt load “because we make strong investments in infrastructure, such as transportation, education, and housing.”
He said that over the long run, those investments, along with fiscal prudence, strengthen the economy.
In other words, he argues, there’s more good news to come.Joshua Miller can be reached at email@example.com.