Scale of Economy Improves in MA

Scale of Economy Improves in MABOSTON-The state has outperformed the US in early 2007, says a new report. That appears to be a good but perhaps temporary trend. Joe ClementsBOSTON-The Massachusetts economy is again taking a different path than the rest of the country, according to a study issued this week by Jones Lang LaSalle. These statewide improvements come as national GDP growth rate cooled to just 0.7% in the first quarter. But the good news for Massachusetts might be only a temporary trend, and the report warns of inherent difficulties that could ultimately derail recent gains enjoyed by Massachusetts.

If the US continues downward, construction and real estate sectors could be adversely affected, says JLL, whereas it notes MassBenchmark’s Current Economic Index puts the state’s economic growth rate at 4.7% during Q1. The report further indicates that 5,000 jobs were added in the first quarter, well above the pace of 3,000 for that same period in 2006. There was a jump of nearly 30,000 jobs between Q1 ’06 and Q1 ’07, according to JLL, which considers the first three months of the year to be the best quarter in Massachusetts since the start of 2003.

“Greater Boston has reason to be optimistic for the rest of 2007 after a highly productive first quarter,” says the overview, further indicating that the state’s housing market has bucked the national slowdown. While there were more than 2,000 petitions to foreclose issued in Massachusetts in March, double that from March 2006, the penetration of subprime lenders here is 18.2%, compared to the US average of 20.1% and the alarming rates of 27.6% in Rhode Island, 25.7% in California and 23.9% in Nevada, based on the amount of money lent to purchase homes. Q1 ’07 single-family home sales were up 13.8% versus Q1 2006, says JLL, while condo sales rose a surprising 15.4%.