New England Regional Forecast

New England may weather this economic storm a bit better than other regions of the United States. However, the credit crunch has hit the region hard from the streets of downtown Boston to the leafy hamlets of Maine, where the uncertain credit climate has shelved expansion at Boston University and a dozen other school projects. A 32 percent year-to-date decline in total building permits through August hit the region’s homebuilders, and many have hung up their hammers or are relying on retrofit work to get by. More than a million square feet of new development along the waterfront is expected to come online by 2011. But with hundreds of thousands of square feet of existing office space occupied by financial firms, any job cuts in that sector would push tons of office space onto the market. The region’s ace in the hole may turn out to be its diverse economy, as biotech and high-tech firms in the Boston beltways are still healthy.

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