Report: Economic Growth In Massachusetts Slowed In Late 2020

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Economic growth in Massachusetts slowed in the fourth quarter of 2020 as a second surge of the coronavirus started to grip the state. 

The economic journal MassBenchmarks reports the slowdown came after a strong increase in the summer months last year.

Mark Melnik, with the UMass Donahue Institute, and MassBenchmarks senior managing editor, said consumers didn't spend as much toward the tail end of 2020. And he said restrictions meant to limit the spread of the virus also played a role in the slower growth.

"We saw huge losses in the second quarter because of restrictions," he said. "Then we saw big gains in the third quarter because restrictions were relaxed."

Melnick said in the fourth quarter, "we kind of had this wavy way in which restrictions were kind of being reintroduced."

He said growth could be sluggish during the first half of this year, but Massachusetts might be poised for significant economic recovery during the second half.

"A lot of the reason for hope is tied to the vaccine rollout," Melnik said. "And competently getting shots in arms and people being able to feel comfortable about getting along with life in a more normal way."

The report from the MassBenchmarks board said during the pandemic, the leisure and hospitality sector and other personal services — like dry cleaning, hair and nail salons and automotive repair — continue to be hardest-hit in the state's economy.