Press Release: 6/12/2025
New Report Shows Massachusetts Has Been in Economic Slow Down Since 2020
June 12, 2025by Editorial Staff
BOSTON — A new report from Pioneer Institute shows that Massachusetts has been in an economic slowdown since 2020, with the professional, scientific, and technical services sector (PSTS) exhibiting the greatest slowdown relative to competitor states since 2022. This sector includes scientific research and development, computer systems design, engineering, and scientific consulting firms.
Drawing on data from the U.S. Bureau of Economic Analysis, researchers at Pioneer found that while Massachusetts remains one of the most economically productive states in the nation, growth in its Gross State Product (GSP), has slowed significantly over the past five years. Once a national leader in per capita GSP growth, the Commonwealth trails both the national average and competitor states across several key industries — especially in high-skill sectors such as PSTS.
“Massachusetts’ flagging leadership in the professional, scientific, and technical sectors is clear and troubling. It is the engine of Massachusetts’ innovation economy,” said Aidan Enright, Pioneer’s economic research associate and author of “Massachusetts at Risk: GSP Growth Slows Relative to Competitor States”. “Continued inaction on longstanding barriers to growth, like housing and taxes, leaves the state less able to compete for talent and investment—and even more vulnerable to new federal policy pressures.”
Key Findings
Broad-Based Growth Slowdown
- From 2020 to 2024, Massachusetts’ private sector per capita real GSP grew by 12.5 percent, well below the national average of 13.3 percent, and significantly behind Florida (26 percent), Texas (22.3 percent), and North Carolina (17.4 percent).
- The state’s per capita real GSP growth fell from fourth fastest in the nation (1998–2019) to 28th fastest (2020–2024).
Losing Ground in the Professional, Scientific, and Technical Services (PSTS)
- Massachusetts’ share of national PSTS GDP declined by 6.6 percent between 2020 and 2024, while key competitor states—Florida (10.6 percent), Texas (12.2 percent), and North Carolina (12.4 percent)—gained market share.
- While Massachusetts’ PSTS sector grew by 24.8 percent on a per capita basis, it was outpaced by Texas (36.7 percent), Florida (36.9 percent), North Carolina (38.2 percent), and Washington (45 percent).
- In 2022 and 2023 per capita GSP growth in the PSTS sector bottomed out and ranked the Commonwealth among the three slowest growing states in the nation. In 2024, growth improved but still trailed the national average.
Despite these trends, thanks to its concentration of advanced industries and world-class elite educational institutions, Massachusetts still holds the second-highest real GSP per capita in the country — nearly $90,000 in 2024 (using Bureau of Labor Statistics inflation-adjusted data). But the report warns that Massachusetts’ position as an economic leader is increasingly at risk.
Massachusetts’ structural challenges—ranging from unaffordable housing to a less than hospitable business climate (taxes, regulation) are leading to less growth, anemic job creation, and a sustained outmigration of young and high-income residents. These challenges are only exacerbated by the disproportionate impact of current federal policies, which are jeopardizing medical research funding and exports, as well as stymied investment from high interest rates and economic uncertainty.
The decline in PSTS market share is especially concerning because it is critical to Massachusetts’ economic development and its status as a knowledge-based and innovation-driven economy. Massachusetts’ longstanding advantages—the Commonwealth’s world-class universities and developed entrepreneurial ecosystems in biotech, the life sciences, and other emerging high-growth industries—are being undercut by competitor states that offer lower costs of living and a more favorable business climate.
“The Trump administration’s actions on NIH grants and tariffs will create a significant drag on Massachusetts’ growth,” said Jim Stergios, Pioneer’s Executive Director. “But it’s our own policies that are driving up housing costs and pushing residents and employers out. Beacon Hill needs have a greater sense of urgency to address these self-inflicted wounds.”
The report concludes that if Massachusetts hopes to avoid further erosion of its competitive edge, it must address these self-created structural disadvantages with urgency. In order to be successful, Massachusetts’ goals must be clear—the attraction and retention of talent and capital—and its mindset must be oriented toward learning from faster-growing states about how to speed housing production, ensure lean and effective workforce development programs, and increase the pace of job creation and entrepreneurship.
“The Pioneer Institute’s report spotlights a serious threat to Massachusetts’ economic future—especially in our innovation sectors, long the backbone of the Commonwealth’s success. For residents and our highly skilled workforce, this decline means fewer quality jobs, shrinking opportunities, and a growing exodus of talent,” said Chris Anderson, President of the Massachusetts High Technology Council. It’s a wake-up call for elected leaders to move beyond incremental steps and pursue a bold, unified strategy—one that taps our world-class universities, research centers, and talent to restore Massachusetts’ edge in innovation and opportunity.”
The release of “Massachusetts at Risk: GSP Growth Slows Relative to Competitor States” follows on the findings of Pioneer’s May report on private employment growth,which found that Massachusetts ranked third worst in the nation for private sector job creation since early 2020. While competitor states like Florida, Texas, and North Carolina added over 10 percent to their private sector payrolls, Massachusetts experienced a net decline—driven by losses across retail, manufacturing, information, and even the professional services that traditionally anchor the state’s economy.