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THOMAS M. MENINO, Mayor JOHN F. PALMIERI, Director

The Boston & Massachusetts Finance Sector. BOSTON REDEVELOPMENT AUTHORITY RESEARCH DIVISION. Alvaro Lima, Director of Research. DOMINIC MODICAMORE Senior Research Associate/Economist – BRA November 19, 2008. THOMAS M. MENINO, Mayor JOHN F. PALMIERI, Director. PRESENTATION OUTLINE.

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THOMAS M. MENINO, Mayor JOHN F. PALMIERI, Director

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  1. The Boston & Massachusetts Finance Sector BOSTON REDEVELOPMENT AUTHORITY RESEARCH DIVISION Alvaro Lima, Director of Research DOMINIC MODICAMORE Senior Research Associate/Economist – BRA November 19, 2008 THOMAS M. MENINO, Mayor JOHN F. PALMIERI, Director

  2. PRESENTATION OUTLINE • Overview of Boston and Massachusetts Employment Trends • Employment Trends in the Finance and Insurance Sector • Boston Largest Finance and Insurance Sector Employers • Massachusetts Mutual Fund Companies • Global Financial crisis and the impact on Massachusetts • Projected Finance and Insurance Sector Job Losses • Economic and Fiscal Impact of Finance Sector Job Losses

  3. Overview of Employment Trends – City of Boston Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  4. Overview of Employment Trends - Massachusetts Source: The Bureau of Economic Analysis (BEA).

  5. Overview of Employment Trends – City of Boston City of Boston Employment by Industry Sector, 2001 and 2007 Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  6. Overview of Employment Trends - Massachusetts Massachusetts Employment by Industry Sector, 2001 and 2007 Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  7. Employment Trends in Finance & Insurance - Boston Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  8. Employment Trends in Finance & Insurance - Massachusetts Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  9. Employment Trends in Finance & Insurance - Boston Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  10. Employment Trends in Finance & Insurance - Massachusetts Source: Boston Redevelopment Authority, using data from the Massachusetts Executive Office of Labor and Workforce Development and the Bureau of Economic Analysis.

  11. Employment Trends 2008 - Massachusetts Source: The Massachusetts Executive Office of Labor and Workforce Development

  12. Finance & Insurance Employment Trends 2008 - Massachusetts Source: The Massachusetts Executive Office of Labor and Workforce Development

  13. Finance & Insurance Employment Trends 2008 - Massachusetts Source: The Massachusetts Executive Office of Labor and Workforce Development

  14. Boston Finance & Insurance Sector Employers Boston's Largest Finance and Insurance Sector Employers 2004 Source: Boston Redevelopment Authority and Boston Business Journal

  15. Massachusetts Mutual Funds Massachusetts Mutual Funds Companies 2006 Source: Boston Business Journal

  16. Global Financial Crisis and Its Impact on Massachusetts • The collapsing stock market, declining real estate prices, and record amount of foreclosures have caused a global financial crisis. • The Stock Market has declined 40% from its all-time high in October 2007. • Home prices are down roughly 20% in Massachusetts since the peak value in 2005 and in some metro areas in the Southwest prices are down 50%. • Nationwide, foreclosures were up 75% in 2007 over 2006 and have continued to increase in 2008. • Mutual Funds and Wealth Management have been the hardest hit sectors in Massachusetts and Boston • Fidelity, Columbia Management, and Putnam, three of Boston’s largest mutual fund companies, saw assets fall roughly 11% each during the month of September alone. • Bank of America announced that it will move most of its wealth management operations from Boston to New York City following its takeover of Merrill Lynch. Boston became Bank of America’s wealth management headquarters after BofA’s takeover of Fleet in 2004.

  17. Projected Finance & Insurance Sector Job Losses • Projected Finance and Insurance Sector Job Losses • A study by Moody’s Economy.com projected that Massachusetts would lose 7,200 finance sector jobs between now and the end of 2009. • It was projected that the majority of those jobs be gained back in 2010 as the economy rebounds. • Announced Layoffs with Major Impacts on Massachusetts • Fidelity Investments – 3,000 jobs (1,300 in 4Q 08 and 1,700 in 1Q 09) • First Marblehead Corp. – 500 jobs • Bank of America – Potentially several hundred as wealth management headquarters moves to NYC.

  18. Economic and Fiscal Impact Economic and Fiscal Impact of Projected Finance Sector Job Losses in Massachusetts (Fixed 2008 $'s)

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