Boston's Economic Growth: Trend Or Blip?

Published September 9, 2010

Some of the most important news about Boston’s economy comes in the form of something very boring: the so-called beige book.

The Beige BookThink of it like a Zagat guide for the economy that’s updated eight times a year. The Federal Reserve System‘s 12 regional banks — one of which is headquartered in Boston — all survey businesses in their regions and compile the responses. It’s less about numbers and more about “How’s business?”

Ten of those banks reported very slow growth this time. But it’s a different story for the other two — Boston and Cleveland. (As WBUR’s Curt Nickisch noted on Twitter: “Good things come to Cleveland after LeBron leaves.”)

Here are highlights of the Boston Fed’s findings, which cover all of New England:

  • Retail sales are mixed. Stores are either seeing decreases or very slight increases.
  • Back-to-school sales were modest.
  • Travel and tourism are stronger than expected.
  • Nearly all manufacturing firms surveyed report favorable results for the second quarter.
  • Software and IT showed strong growth.

Our go-to expert, Alan Clayton-Matthews, talked with Morning Edition today. Clayton-Matthews said high-tech is lifting Boston’s economy ahead of the rest of the country. But businesses here are still reluctant to hire because of the weak recovery nationally and internationally. “Why would you want to expand if you may need to cut back in the near future?” he said.

Half of the high-tech firms surveyed by the Boston Fed have increased hiring, and one firm said it was “on the cusp of hiring.”

WBUR’s Bob Oakes asked Clayton-Matthews, Is this a blip or a trend?

“I think it’s a trend,” he said. But: “This recovery has a long way to go and it’s also a very unequal recovery.” By “unequal,” he means that metro Boston is racing ahead of the rest of the state. Massachusetts is still stuck in a recession.

Clayton-Matthews said the only thing that can “fix” our economy — and get people to start spending again — is time.

What are your economic indicators? How do things look from where you stand?