Worcester Business Journal

wbjournal.com | December 23, 2024 | Worcester Business Journal 9 4. Biotech and pharmaceutical expansion - Worcester's growth as a biotech and biomedical hub continues with developments like the Reactory, a 46-acre biomanu- facturing park where companies like WuXi Biologics and Galaxy Life Sciences are being estab- lished. Worcester's medical school, with its Nobel Prize-recognized research, adds further appeal for companies. 5. Increased college enrollment - Worcester's reputa- tion as a higher education hub will strengthen in 2025, boosted by initiatives like free community college tui- tion. More students mean more visitors, tuition revenue and spending in the local economy. 6. Workforce development - Efforts by the city, state, chamber, and local colleges to improve workforce train- ing will provide skilled labor. 7. Population growth - Worcester's population has surged due to increased housing, private investments, education, and medical research. 8. Infrastructure development - Worcester's infra- structure has room to grow. With Massport under new leadership, expect a renewed focus on transportation options throughout Central Massachusetts. 9. Hospitality - e number of hotels in the city has not yet caught up to Worcester's size (200,000+ residents and 35,000+ students). Expect our community leaders and city officials to work with developers and investors on hotel projects. More sophisticated hotels would attract conventions, trade shows, and tourists. W ECONOMIC FORECAST 2025 BY MARSHALL SUGARMAN Special to WBJ W orcester, New England's second larg- est and fastest-growing major city, continues to benefit from a surge in both public and private investments. is growth is positively impact- ing residents and businesses across the city's diverse community. Over the past 10 years, Worcester has seen an impressive $4.5 billion in major development projects, according to the Worcester Regional Chamber of Commerce. Overall, Massachusetts' economy has been expand- ing at a rate below the national average, largely due to the impact of elevated interest rates on the technology, professional services, and other white-collar sectors, according to TD Economics, the research arm of TD Bank. On the other hand, the state's sizable healthcare sector has played a key role in stabilizing the economy, helping to keep it close to its potential growth rate. As financial conditions improve in the coming months, TD Economics anticipates the state's economy will stabilize, with growth projected at 2% in 2025. e labor market continues to be a challenge, however. In 2024, although New England's economy expanded steadily and employment rates showed signs Worcester's 2025 economic outlook: Brighter road ahead of improvement, the state never- theless experienced a rise in un- employment. is resulted from significant growth in the labor force, or those eligible to and ac- tively seeking work, which led to a higher unemployment rate as of late 2024. e unemployment rate is now at its highest level since early 2018, excluding the COVID pandemic. Data show recent signs of progress, but the number of open jobs has not fully kept pace with the rise in labor force participation, which has nearly returned to pre-pandemic levels. is trend is helping to alleviate some of the labor shortages in the state, but it means the unemployment rate is rising. Moving into 2025, the unemployment rate is expected to increase at a slower pace, averaging around 3.6% for the year. Business investment is likely to grow in 2025 as interest rates slowly decline. According to the Massa- chusetts Business Confidence Index from the Associ- ated Industries of Massachusetts, business sentiment is trending upward in Central Mass. once again. With manufacturing, life sciences, and higher education as major industries in the region, there is reason for this positive outlook. ese industries have benefitted from legislation and federal and state government investments and should continue to do so with the Mass Leads Act. Manufacturers are seeking credit for working capital and building expansions, while the in- creased presence of biotechnology and pharmaceutical companies should generate further investments. Smaller businesses will likely reap benefits from these investments. In 2024, the number and dollar amount of U.S. Small Business Administration loans in the state increased from 2023, a sign businesses are more willing to spend and expand. Lower interest rates will mean businesses with limited cash reserves may take on lines of credit or other loans as 2025 progresses. For individuals and families, the housing market ex- perienced lingering affordability challenges, which have been compounded by a shortage of available housing for purchase and for rent. In Worcester, the opening of the Polar Park baseball stadium has attracted other development, including the construction of several multifamily buildings. e opening of a new platform at Union Station this summer, which increased com- mutability, was more good news for residents. Infra- structure improvements such as this will continue to make Central Mass. a desirable place to live and work. While the New England economy showed steady expansion throughout 2024, several challenges remain, particularly in the labor market. However, Central Massachusetts' robust growth remains a bright spot. As financial conditions gradually loosen, expect the local economy to stabilize and grow at a slower, more sustainable pace in 2025 and beyond. Marshall Sugarman is commercial market president of Massachusetts for TD Bank, one of the 10 largest banks in the U.S. and the No. 2 lender of SBA loans in Mass. W Marshall Sugarman Satya B. Mitra Key factors will fuel 2025 economic growth BY SATYA B. MITRA Special to WBJ C entral Mass. is well positioned for econom- ic growth in 2025. Macroeconomic factors, namely declining interest rates and a reduction in the growth rate of inflation, suggest the national economy will trend upward in 2025. President-elect Donald Trump has sug- gested possible tax reforms, such as lowering corporate tax rates and making the 2017 Tax Cuts and Jobs Act permanent, which should accelerate economic growth. Central Mass. should benefit from or even exceed this projected national growth, due to key positive factors. 1. Affordable housing initiatives - Gov. Maura Healey and Housing Secretary Edward Augustus have em- phasized affordable housing construction here. ese projects will create jobs, expand the property tax base, attract new residents, and stimulate local spending. 2. Strong business community - Worcester's busi- ness owners and organizations, such as the Worcester Regional Chamber of Commerce and the Worcester Business Development Corp., have played a vital role in economic development. For example, the Polar Park baseball stadium has become a catalyst for growth by attracting visitors and supporting local businesses. e business community has the foundation to handle any similar large-scale projects emerging in 2025. 3. Emergence of young entrepreneurs - Worcester's attractive environment – with affordable housing, cul- tural opportunities, and education – encourages college graduates to remain in the area and launch businesses. However, economic growth is not a certainty. On a national level, tariff programs are traditionally con- sidered by economists as having a net negative impact on the economy. Trump's immigration policies may have an impact on the availability of workers, creating challenges for businesses. Specific to Central Mass., the unemployment rate remains around 3.5%. Additionally, Worcester is committed to providing shelter for the unhoused and being a city warmly welcoming refugee populations. ese are tremendous gestures by the city, showing what Worcester truly is, but with increasing homelessness and a rise in refugees due to global con- flicts, additional economic resources will be needed to support these noble programs. Despite these challenges, I predict a rising economy for Central Mass. in 2025. Economic indicators such as national GDP growth (2.8%) and Massachusetts GDP growth (2.4%) suggest stable growth. While not all projects will materialize immediately, many will begin or advance next year, setting the stage for growth. Satya B. Mitra is president and CEO of e Guru Tax & Financial Services in Worcester. Please consult proper professional consultants before using any message or data given in the article, for your use. Satya B. Mitra is a registered representative. Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM. Insurance services offered through an Avantax affiliated insurance agency. e GuruTax and Financial Services, Inc.is not a registered broker dealer or registered investment advisory firm.

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