Lisa Murray

As we start the new year, it’s the perfect time to prognosticate on a range of regional economic topics, especially as our region continues to recover from the aftershocks of the COVID-19 shutdowns almost two years ago. The new year will clarify the lingering effects of the pandemic – including a stalled supply chain – and provide new direction for homeowners, consumers and business leaders alike.  

The empty storefronts and company headquarters in downtown districts made headlines during the transition to remote work that began as COVID-19 cases raged around the globe. Today, a variety of factors contribute to this ongoing issue, with many ventures large and small moving from the heart of the city to the suburbs and even the exurbs.  

Cities and towns around the state are seeing an influx of shops, services and amenities, from upscale stores and day spas to cafes complete with fair trade coffee and WiFi. Further, developers in places such as Somerville, Watertown, Chelmsford, Burlington and Malden have been acquiring property in the belief that these communities will emerge as magnets for the growing life sciences and innovation sectors. 

But the ebb and flow of real estate isn’t the only factor to consider. While the economy is slowing down, the financial markets are trying to determine what it means to function without the availability of “cheap money” that in recent years has helped finance the launch of startups and the expansion of established businesses.  

Also, with mortgage rates escalating, Boston area home sales – and, in some areas, home prices – are hitting the brakes. Increased uncertainty is reverberating throughout the market and many local homeowners, prospective sellers and potential buyers are apprehensive about next year. 

Watch Jobs Numbers 

Still, looking ahead, I am optimistic about the start of 2023, with credit remaining strong across the bank’s retail and commercial customer base while our merger and acquisition advisory pipelines are at record levels. Though inflation is taking a toll on consumers and companies alike, the GDP rose in the third quarter based largely on trade and the impact of the strong dollar. 

And unless the country, contrary to current trends, begins to experience a significant loss of jobs, I don’t foresee a recession in the near term. This also carries over locally where, with the Massachusetts November unemployment rate at 3.4 percent and jobs and wages on the rise, we remain in a strong position. 

Research recently conducted by Associated Industries of Massachusetts confirms what our customers, colleagues and our own surveys confirm: Employer confidence is on the rise, with local business leaders expressing enthusiasm about their position and prospects.  

This confidence likely stems from the fact that the fundamentals of the economy are strong. Today’s companies have survived the pandemic and gotten more efficient. They have survived the geopolitical shocks of 2022. A labor shortage and supply chain issues have fueled inflation and the war in Ukraine has exacerbated it. The Federal Reserve has said it will keep interest rates higher for longer in 2023, but eventually this intentional demand destruction is expected to give way to an environment where inflation has been tamed and growth can continue at a measured pace.  

According to economists, employers believe that the commonwealth’s economy is faring better when compared with other states across the country, but we can’t rest on our laurels. To ensure success, businesses must be responsive to shifts in the market, invest in innovation and support the professional development of their employees.   

Given that wages and benefits can account for as much as 52 percent of a business’ operating budget, investing in talent, which includes creating opportunities for growth, is good for the bottom line. To keep high-performing employees, we must engage and empower them and encourage active participation in the life of our companies.  

The year ahead promises investments designed to spur economic growth in local communities, while also promoting equity and supporting the health and well-being of Massachusetts residents. By ensuring that Massachusetts’ families and workforce can grow and thrive, the commonwealth is poised to enter 2023 on a solid economic footing.  

Lisa Murray is the Massachusetts president for Citizens.