after ranking 13th in growth of gross domestic product (GDP) over the period from 1997 through 2004, Massachusetts came in a lowly 42nd the following year, behind every northeastern state except Maine. We now account for 2.62 percent of the aggregate for all state GDPs. That’s down from our peak during the past four decades—2.98 percent in 1988—but still better than the 2.46 percent at the state’s low point, in 1979. In that year, manufacturing was by far the biggest sector in our economy, at 25.6 percent of GDP. (It was at 22.7 percent nationally.) Now it’s down to 10.1 percent (versus 12.1 percent nationally), having been passed by finance and insurance, trade, professional services, and our new economic Bigfoot, “real estate, rental, and leasing,” as it’s described by the Bureau of Economic Analysis. Property-based transactions accounted for 14.6 percent of our GDP, according to the latest figures, which makes us the seventh most dependent on the real estate sector. (Florida is in the lead, and New Hampshire ranks sixth.)
But given the volatility of real estate, our future may lie more in the field of “professional and technical services,” which accounts for 10.8 percent of our GDP; the national figure is 7.0 percent, and only Virginia is ahead of us on this score. The Bay State also logged one of the biggest growth rates in this sector in 2005. In contrast, we were one of only six states to see a decline in wealth attributable to the finance-and-insurance sector. And despite our reputation for big government, we now rank 49th in the share of GDP generated by the public sector (8.9 percent), above only Delaware.