Uncertainty has become the new normal.

While the recent round of across-the-board spending cuts known as the sequester may not directly hit the banking and real estate industries in Massachusetts, industry players are nonetheless gearing up for the ripples it will undoubtedly send across the Bay State’s economy.

So far, one of the brightest spots in the Massachusetts economy has been the continuing rebound in residential real estate. Will the sequester shove housing back down?

It’s unlikely, said economist Yolanda Kodrzycki, the director of the New England Public Policy Center at the Federal Reserve Bank of Boston.

“The way I’ve been looking at it is to look at what the impact on the U.S. will be, and ask, ‘Will Massachusetts be hit harder or less hard?” she said. So far the answer appears to be ‘about the same.’ In Massachusetts, the brunt of the sequester will be felt in three sectors that are crucial to the state’s economy: defense, medical research and education. But while those industries will take a substantial hit, their contribution to the Bay State’s economy is roughly parallel with the federal government’s contribution to the overall economy, Kodrzycki said. The nation, Massachusetts is likely to take about a 0.5 percent hit to growth, dropping the state’s estimated GDP from 2.9 percent to 2.4 percent for 2013 — enough to slow us down, but still leaving us on the plus side of the ledger.

Uncertainties remain, however. Even if the cuts themselves are manageable, if worries about the state of the economy and the incompetence of the federal government put a big dent in consumer confidence, growth could take a bigger hit, Kodrzycki cautioned.

That certainly seemed to be the case during the ‘fiscal cliff’ crisis at the end of 2012, when many Realtors reported economic worries were holding some buyers back. But for now, it seems like real estate agents have bigger worries than the intransigence of Congress when it comes to the housing recovery, namely: inventory. The Fed’s most recent Beige Book report on economic activity in the Boston region reported that “several [real estate agent] contacts worry about whether the supply will adequately sustain buyer interest,” as we head into the spring market proper.

The potential cuts from sequestration will have serious, but indirect effects on the state’s commercial real estate industry, said David Begelfer, executive director of NAIOP Massachusetts. The dollar amount of research funding that could be cut is still unclear, but Massachusetts stands to be hit hard as a state with a high percentage of the funding for the research funds being shipped out of Washington, D.C.   

Biotech, Life Science Companies Might Take Hit

While not directly affecting the industry, many of the biotech and life science companies that comprise the heft of the tenant base in East Cambridge and that are spread throughout the Commonwealth receive large amounts of research funding from the federal government, funding that stands to be slashed by sequestration. That money also goes to the many local research hospitals and institutions working for cures for various diseases, and the smaller startup firms that spinoff the hospitals or larger companies.

Those life sciences firms have been at the heart of much of the economic and commercial real estate growth that has occurred in the Bay State in recent years. With federal research grant cuts looming, companies would be unlikely to expand their businesses with new hires, and instead freeze up, Begelfer told Banker & Tradesman. That, in turn, could have a chilling effect on many of the construction projects currently in the pipeline, leaving developers and construction workers out in the cold.

Consumer Confidence Affected

And while the Independent Community Bankers Association is withholding comment on the sequester’s possible impacts for now, it’s no stretch to imagine that consumer confidence, already battered by a drawn-out recession and slow recovery, will take another beating as scores of municipal, state and federal employees are furloughed to make up for budget cuts.

Credit unions, especially those whose fields of membership include state and federal employees, have been battening down their hatches in anticipation of the coming cuts, Rob Kimmett, spokesman for the Massachusetts Credit Union League, told Banker & Tradesman.

“Those folks might see their income cut back and might need some help with cash to tide them over or some forgiveness on their loans, so the credit unions have introduced actions like that to help,” he said, so some of those credit unions, for example, are offering their members extensions on loans or waiving penalties for early withdrawal of CDs, he said.

Kimmett also said that Service Credit Union – a Portsmouth, N.H.-based credit union that serves military members – was prepared to offer its members zero percent interest loans if necessary.

And sequestration would also deliver a crushing blow to small businesses that rely on help from the Small Business Administration (SBA).

Sequestration would cut more than $16 million in SBA loan subsidies and limit the SBA’s ability to offer workshops and events on nights and weekends, hours that are often more convenient for a budding small business owner.

Emails: jcronin@thewarrengroup.com, lalix@thewarrrengroup.com, csullivan@thearrengroup.com