Central Massachusetts showed economic strength in 2019 and moves into the new year on strong legs.
The Telegram & Gazette asked business and economic leaders about their expectations for 2020.
We posed two questions:
1. What are your expectations or predictions for the business climate in Central Massachusetts as we move into 2020? Do you see economic vitality and job growth?
2. What trends do you see emerging in 2020 in your industry or the local business environment or local economic development in general?
Here is what they had to say:
Tim Murray, president and CEO of Worcester Regional Chamber of Commerce
1. I believe we will see continued economic development momentum in Central Massachusetts. Worcester’s growing recognition as an innovation hub for the region’s diverse economy should continue to drive this growth. Transportation, housing and tax policies will influence the extent by which the region can fully leverage this momentum.
2. As an organization that represents a broad-based cross section of businesses of all sizes and sectors, issues around access to talent and expanding the workforce pipelining, to include workforce training programs, are critical to the region’s economic growth.
John C. Roche, president and CEO of Hanover Insurance
1. The momentum established in Central Massachusetts over the past several years was increasingly evident in 2019 and bodes very well for sustained economic vitality and growth. I am as bullish as ever about the region’s prospects, given the continued cooperation and coordination among the public and private sectors, and from a mix of longtime Central Massachusetts advocates and newcomers who recognize the region’s tremendous promise. The breadth of our revitalization — involving commercial and residential development, hospitality, retail, entertainment, the arts and more — will continue to generate strong economic growth and prosperity as Central Massachusetts becomes an even more conspicuous alternative to Greater Boston and realizes its potential.
2. The strength of the U.S. economy is reflected throughout our industry as well as in many industries throughout Central Massachusetts. While competition continues to intensify globally, in our business, and across our region, opportunities are developing for companies with the ability to anticipate emerging consumer demands and expectations, and to innovate and improve the customer experience. Companies that can rise to the challenges ahead will prosper, consumers will benefit from enhanced pricing, choice and convenience, investors will be rewarded, and communities will be advantaged.
Dan Rea, executive vice president of Worcester Red Sox
1. When we first announced our intention to build Polar Park in August 2018, one of the biggest factors in our decision was the robust and still-developing business climate in Worcester and Central Mass. as a whole. Since our announcement we’ve seen nothing to change our opinion or dissuade us from that initial optimism, and we’re galvanized by the fact that the story of our ballpark and its surrounding development is but one piece of a broader mosaic of growth around the city.
2. From Allen Fletcher’s project bringing online a ground floor market and residential units in Kelley Square, to the recent restaurant announcements made by Chip Norton and his team at the Mercantile Center, we’re grateful to the coalition of private business people and public officials who have cultivated this growing scene. This scene will soon include our ballpark and its mixed-use development components nearby, and we’re excited to see the momentum proceed in 2020 as we and others continue our work.”
Michael Crawford, senior vice president and Worcester market executive, Rockland Trust
1. Rockland Trust is bullish on Worcester! My expectation for the 2020 business climate in Central Mass. is continued strength and growth. In fact, we are in the midst of hiring additional commercial lending staff and will be opening our first branch in the city this year. With the many ongoing development projects, new businesses openings and Worcester’s private and public leadership, there is significant activity and a distinct air of optimism in the community which should continue.
2. A trend I have noticed is the heightened amount of interest and investment dollars coming from outside the region into the City. We all know about the sale of the 446 and 600 Main Street high-rise properties. Both were very large sales. However, just in the last week, I have heard from four separate Boston area investors who were calling about financing for smaller properties in Worcester. Worcester’s resurgence is no longer “our” secret.
Dr. Eric W. Dickson, president and CEO of UMass Memorial Health Care
1. Worcester has an incredible opportunity for jobs and economic growth – especially in the health care space. Each year 10,000 patients from Central Massachusetts are transferred to Boston area hospitals for services and procedures that, if we had the space, could be done here in Worcester. This outmigration not only increases the cost of medical insurance for employers in the region, but also costs the region several thousand high paying jobs that migrate with the patients to Boston.
We have to improve our medical infrastructure in the region to keep costs low for employers, while reaping the employment and financial benefits of maintaining the associated jobs here in Worcester.
2. I think we are seeing a greater outpouring from hospitals across the country who are looking to address Social Determinants of Health issues that are roadblocks to wellness for people in our communities. I could not be prouder of the work Anchor Mission organizations like ours have done over the past year to attack the problems our patients face outside of the hospital setting. It is the most inspiring new trend in health care and I am glad UMass Memorial has been an early adaptor.
Additionally, we and other organizations will, continue to leverage virtual medicine, digital diagnostics and digital therapeutics to provide care in non-traditional settings. Over the next decade I predict that digital medicine will transform healthcare.
Robert Morton, CEO of bankHometown
1. Local business owners are as positively optimistic about 2020 as they were about 2019, if not more so. Outside investment into Worcester like the planned addition of the WooSox continues to provide the necessary “shot in the arm” for local economic development, which in turn creates an environment for favorable business growth in the new year. Any expectation that exists for a recession indicates that it would be at least a couple of years off and generally mild.
2. Despite local business owners’ high level of optimism, a lack of skilled talent necessary to fill critical job openings continues to be a challenge. Therefore, business owners who are able to attract, train, and motivate new talent will enjoy the greatest levels of success in 2020 and into 2021.
Craig Blais, president and CEO of the Worcester Business Development Corp.
1. In the Worcester area I anticipate more growth and expansion as confidence in investment and return becomes more certain. We expect continued growth in the the life sciences and more mixed use development. In addition we will see more expansion in both affordable and market rate housing. We must continue to develop “pad ready sites” for developers and end users.
2. I see more mixed use investment specifically in the Canal District and downtown as the ballpark, infrastructure upgrades and contiguous development matures in the coming months.
Anthony Consigli, CEO of Consigli Construction
1. Our expectation for the general business climate in Massachusetts in 2020 is for it to be relatively consistent from 2019 — we would be surprised if there were major changes nationally prior to an election. Locally, Massachusetts and Central Mass. continue to benefit by having so many positive attributes for business right here.
2. We hope that more economic expansion continues westward from Boston due to challenges with transportation, permitting, and real estate and construction costs. We expect construction to slow a bit in 2020, not because of the economy but because of a continued strain on skilled labor and the resulting costs impact. Owners looking to build for their business, or organization are searching for ways of lessening building costs without exposing themselves to higher costs in later years by building poorer quality.
Steve Rotman, CEO of Vystar, which acquired Rotmans
1. I anticipate a continued healthy business climate in Central Massachusetts with the expanding transportation infrastructure being a key factor. Thanks to investments in rail and the Worcester airport, a lot of businesses are relocating here and that, in turn is attracting home buyers who appreciate the lower cost of living and doing business here and easy access to numerous large cities within a 50-mile radius including Boston, Providence, Hartford, Springfield, Lowell, Nashua, Fitchburg, Leominster and Gardner. We are seeing an evolution where older buildings are being acquired by visionary, well capitalized developers and investors who are planning and/or executing renovations to adapt them to the new digital economy. In some cases, buildings are being transformed for mixed commercial/residential use. The inclusion of residential units in commercial buildings helps keep the downtown areas vibrant and reduces traffic congestion as residents are living in close proximity to work, restaurants and other services they use. This helps these smaller businesses thrive as well.
2. While traditional retail overall is declining as can be seen in how shopping malls are struggling, we are seeing job growth in e-commerce, not just for the furniture sector, but across many sectors. I expect to see continued growth in this area. All types of businesses should be planning their e-commerce strategies if they want to survive. As for Rotmans Furniture, many customers still want to sit on or touch the furniture before they buy it, so we don’t see our retail footprint decreasing anytime soon. However, over the past several years, in line with the national trend, we have been expanding our e-commerce business to serve the growing number of consumers who want the convenience of shopping online and having quality merchandise delivered quickly to their doors. With Vystar, which, in addition to owning Rotmans produces Vytex low protein latex used in many types of products, and RxAir UV light air purifiers, almost all consumer sales are online or business-to-business and we expect that to continue. Due to increased demand and to better service our customers, we have expanded our shipping to 7 days/week and added next day and same day delivery throughout New England.
Edward F. Manzi Jr., chairman and CEO of Fidelity Bank
1. I expect 2020 to be a strong year. Conversations we have had with our client base have been very positive. A big part of what is driving the positive momentum is that asset values of all kinds are going up. When that happens, people feel good because their balance sheets are stronger. The demand for credit is strong, delinquency rates are low, and the demand for talent is high. These are the kinds of factors we can see that suggest things are still healthy. News events, such as the death of Qassem Soleimani and the 2020 election are worth watching because they can be potential sources of volatility affecting both assets and confidence. The results could have a lasting effect on the economy.
2. Community banking has a strong future. People still want a local source for sound financial information they can use to make good decisions. I expect the trend towards consolidation in the community banking space will continue. In the first quarter of 2020, Fidelity Bank will be finalizing our merger with Family Federal Savings — our third merger in four years. Overall, Central Massachusetts will continue to see a migration of capital from the outside moving into our region. Strong local leadership from city officials in Worcester, Fitchburg, Leominster and Gardner as well as our local chambers of commerce have led to sustained economic growth that helps companies invest in the market with confidence.
Richard Burke, president and CEO of Fallon Health
1. Persistence. It’s a trait that the city of Worcester has long exemplified. And the momentum we are now seeing is the reward of that continued course of action. Carried by the success of the downtown and the impact of the Worcester Red Sox, Worcester is experiencing a period of growth and renewed energy. That catalyst exists because of the commitment and optimism by many who deeply believe in this community and continue to make investments in it. The many positive changes taking place are helping to make this region even more attractive and I believe the future here is bright.
2. Healthcare is an evolving industry. We will continue to see efforts to address key health care cost drivers, including prescription drugs. We will see closer collaboration among payors, providers and policymakers to find ways to deliver high-quality care at a more affordable cost. We may see more provider consolidation, which affects health care costs. Additionally, we can expect to see movement towards integrating and investing in behavioral health and primary care, the two main entry points to the health care delivery system.
Andy Davis, director of Worcester Regional Airport
1. With the surge in commercial real estate activity, construction, and in the service sector with more hotel rooms, sports and dining options over the past few years, Worcester and Central Mass. have built a solid foundation for jobs and economic growth. The region should continue to see more positive economic activity in 2020, with Worcester Regional Airport as a connection to the national and global economy. In 2019, a study released by MassDOT showed Worcester Regional Airport has an economic impact of $97 million, a 109% increase from a similar study in 2014. We expect this growth trend to continue in 2020 and beyond, as more people recognize the airport’s convenience and affordability.
2. With a continued strong economy, demand for both business and leisure travel should grow and airlines will want to compete for that business with more flight options. What will be key for Worcester Regional Airport to reap the benefits of increased service is for the region to support the flights we have today. There are over 1 million residents that live closer to Worcester than any of the other surrounding airports. In 2019, they flew over 3 million times and almost 200,000 used Worcester. It won’t take much to grow that number and prove to the air carriers that there is demand for more flight options.
Steve Joseph, senior vice president of Unum
1. We’ve called Worcester home for 90 years, and we’re excited to be part of the continued renaissance of downtown. What we’re seeing here mirrors the economic growth occurring throughout the country as more people join the workforce and participate in our growing economy.
2. As a leading provider of employee benefits offered through the workplace, employment trends play a key role in our business. We’ve seen a strong labor market for the last several years and believe that trend will continue. Companies like ours prosper in a low unemployment environment as demand for employee benefits grows. That also drives competition for talent — something we’re seeing across the U.S.
James Umphrey, principal at Kelleher & Sadowsky
1. 2019 showed strength in nearly every sector of the economy. Although manufacturing has slowed over the past decade, many companies that manufacture in specific niches that require technology and engineering expertise have been growing at rapid rates. Worcester County has become very viable location for warehouse/distribution companies as well as those in the fulfillment sector. This is primarily due to a lower cost of land and space, as well as a very central location for distribution throughout New England. The service sector of the economy continues to grow throughout this region of the state, and I am bullish that this will continue due to affordable real estate and an attractive labor pool, especially young people graduating from local colleges and universities.
2. There is a trend in the industrial sector to either repurpose older “mill” type properties into housing, or demolish existing buildings and construct new warehouse distribution centers. In the office segment, we see a continued turn for companies to move back into urban environments in order to satisfy younger workers, millennials in particular. I think that there will be a continued trend to see more housing developed in urban areas such as downtown Worcester due to strong demand and economic incentives such as Opportunity Zones. Low interest rates continue to be a strong factor in making real estate one of the most attractive investments in the future.
Harry Kokkinis, president of Table Talk Pies
1. Table Talk Pies is proud to be a part of Massachusetts’ food manufacturing industry which is such an important part of our economy. We believe that food and beverage manufacturing will continue to play a strong role in the economic vitality and job growth to this region in 2020 and for the foreseeable future. We are grateful for all of the talented and passionate members of the Table Talk team this community provides and we are committed to attracting and training future generations who want to make pies with us.
2. This is a really exciting time in the history of Worcester. Public and private investment is fueling a renaissance in our city that is great to witness. The construction of Polar Park and the relocation of the Triple A affiliate of the Boston Red Sox to Worcester is already having a positive impact on our community. We believe it will bring about long-term economic and cultural benefits. We are proud to be a part of this renaissance. Worcester has also become a destination for those who love food with many new restaurants and specialty food shops opening. This development has inspired us to start offering new flavors, such as our limited edition Pancake Pie, in addition to our traditional favorites. We will also be launching a new line of 4-inch snack pies in partnership with Nestlé USA this year. We hope these new pies — Chocolate Pecan Pie, Chocolate Coconut Pie, and Chocolate Chip Cookie Pie, made with Nestlé Toll House Morsels—will become customer favorites in the years to come.
Robert D. Cox Jr., managing partner, Bowditch & Dewey
1. I expect economic vitality and job growth in the Worcester area — in 2020 and beyond. With increased traffic congestion, we’re going to see an influx of people wanting to reduce their commuting time into the city. The impressive occupancy rates of new residential developments, like 145 Front Street at City Square, are examples of what’s to come. These will build momentum for a walkable downtown with restaurants and entertainment options, as more people see Worcester as a place to live, work and play.
2. Two interlocking trends will surface—concerns about climate change and traffic congestion—with the next generation exerting even more pressure to act on them. The median age in Worcester’s urban core is 30. In September, the city adopted a resolution endorsing “a declaration of climate emergency” – requesting regional collaboration to mitigate climate change, prepare infrastructure, and protect residents by, among other things, revitalizing public transportation, incentivizing use of clean motor vehicles, and making best use of our roads and infrastructure. That gets back to making Worcester’s downtown a walkable city, with more residential development.
Charles “Chip” Norton Jr., owner of the Mercantile Center
1. Worcester is well positioned to continue with its strong economic performance through 2020. Worcester has developed a very diverse economic foundation of Health Care, Life Science, Medical Research, manufacturing, warehouse distribution and a strong service sector. With affordable housing and labor, and a high level of intellectual capital, Worcester continues to be a very attractive place for companies to relocate to or continue to grow within the community.
2. I see a continued trend of new market rate housing being built, and a continuation of people living in Worcester and commuting to the Boston area. Also I see a continuation of companies migrating back into urban office settings. Overall, I see a real estate market that continues to grow and receive more investment from outside developers. Opportunity Zones will continue to drive development in the designated areas, providing housing and new office and industrial space.