Springfield: Economy

Major Industries and Commercial Activity

Historically, the Springfield Armory drew skilled metal workers to the city. This manufacturing expertise has broadened to include a number of diverse concerns. The city's service industry has been growing in importance, although manufacturing remains a mainstay of the Springfield economy. The industrial base of the city is particularly diverse, as Springfield is home to significant insurance, chemical, paper, government, and health care facilities. This diverse foundation is especially beneficial in difficult economic periods. The recession that struck the nation in the late 1990s, borne from a decline in the technology industry, had a lesser impact on Springfield due to its relatively low concentration of technological companies. Still, the local economy did struggle to some extent. In 2004 the Pioneer Valley Planning Commission updated the decade-old Pioneer Valley Plan for Progress to address economic concerns through seven plans of action that include cross-border collaboration with the Hartford, Connecticut, region; improving education and technology; and supporting existing industries like agriculture and manufacturing as well as emerging industries like knowledge creation, healthcare, and plastics. The report recognizes that small businesses are growing in importance; as testament, a study released in 2005 by the U.S. Small Business Administration's Office of Advocacy ranked Springfield third of 394 regions for entrepreneurship and innovation. The Plan for Progress also recognizes that efficiencies in production processes continue to shift the local economy away from manufacturing toward services. While the number of manufacturing jobs had decreased between 1969 and 2001, employment in the service industry jumped from 150,000 to 200,000 over the same time period. The fastest growing service sectors are healthcare and education.

Among the companies headquartered in Springfield are Massachusetts Mutual Life Insurance Co., Merriam-Webster Inc., Smith & Wesson Corp., and the retail food company Big Y Foods Inc.

Items and goods produced: firearms, envelopes and stationery, chemicals, machinery, electrical equipment, rubber goods, printed matter, automobile accessories, forged metals, games and toys, educational equipment.

Incentive Programs—New and Existing Companies

Local programs

The city of Springfield assists in securing financing for new and expanding businesses from a variety of financing programs offered by the State of Massachusetts. The city offers property tax relief, development assistance, potential Enterprise Community benefits, and assistance with job training and workforce development.

State programs

Under the Massachusetts Economic Development Incentive Program, Springfield is designated an Economic Target Area, an area ripe to attract and retain businesses. Approved "certified projects" with this area are eligible for state investment tax credit, abandoned building tax deductions, and municipal tax benefits. Massachusetts also offers tax increment financing, emerging technology funds, tax credits for research and development, a predevelopment assistance program, a capital access program, and bond, equipment, and export financing programs.

Job training programs

The Regional Employment Board allocates and oversees worker training programs in Hampden County designed to meet the specific needs of employers. FutureWorks, Inc. is a quasi-public agency serving both as a "one-stop" career center and a fully-equipped applicant processing, screening, and training agency. The Division of Economic Development of Springfield Technical Community College promotes the development of a highly-skilled workforce through education and customized training.

Development Projects

One of the largest development projects underway in the mid-2000s was the MassMutual Center. The $71 million expansion and renovation project, scheduled for completion in late 2005, will transform the Springfield Civic Center into a new facility with more than 40,000 square feet of exhibition space, 9,000 square feet of meeting space, and an arena that can seat up to 8,000 people. The historic Court Square Park, adjacent to the center, is undergoing $500,000 in restoration and beautification efforts to accompany the center's grand opening.

Springfield College launched a fund-raising campaign in June 2005 to raise $40 million for the construction or renovation of five buildings. Proposals to build a hotel and an entertainment-oriented retail complex on the site of the former Naismith Memorial Basketball Hall of Fame, which moved to a new location in 2002, were under consideration in mid-2005.

Economic Development Information: Pioneer Valley Planning Commission, 26 Central St., West Springfield, MA 01089-2787; telephone (413)781-6045; fax (413)732-2593; email info@pvpc.org. Western Massachusetts Economic Development Council, 255 Padgette St., Ste. 1, Chicopee, MA 01022; telephone (413)593-6421; toll-free (888)593-6421; fax (413)593-5126; email feedback@westernmassedc.com

Commercial Shipping

Westover Metropolitan Airport, fifteen miles northeast of Springfield in Chicopee, serves as the region's principal air cargo handling facility. Boston & Maine Railroad and a vast fleet of commercial trucks also haul freight into Springfield.

Labor Force and Employment Outlook

Business leaders describe Springfield's labor force as skilled, with a strong work ethic. The region dubs itself the "Knowledge Corridor" due to the concentration of institutions of higher learning. The labor pool is not restricted to Springfield residents; rather, more than 26,000 workers commute daily across the state lines of Connecticut and Massachusetts.

The following is a summary of data regarding the Springfield metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 294,200

Number of workers employed in . . .

construction and mining: 10,500

manufacturing: 39,200

trade, transportation and utilities: 60,600

information: 4,700

financial activities: 16,300

professional and business services: 23,900

educational and health services: 53,200

leisure and hospitality: 26,700

other services: 11,300

government: 47,900

Average hourly earnings of production workers employed in manufacturing: $15.43

Unemployment rate: 5.8% (February 2005)

Largest employers	Number of employees
Baystate Health System	6,300
Springfield Public Schools	4,600
Sisters of Providence Health System	4,039
MassMutual Financial Group	4,000
City of Springfield	2,278
Center for Human Development	1,069
Peter Pan Bus Lines	850
The Republican	800
U.S. Postal Service	774
Western New England College	650

Cost of Living

Springfield refers to itself as "the city of homes." The Springfield Redevelopment Authority assists prospective homeowners through the Home Ownership Opportunity Program, the Springfield Housing Finance Mortgage Pool, and a HUD Joint Venture for Affordable Housing Award.

The following is a summary of data regarding several key cost of living factors in the Springfield area.

2004 ACCRA Cost of Living Index: Not reported

2004 ACCRA Average House Cost: Not reported

State income tax rate: 5.95% on earned and business income

State sales tax rate: 5.0% on most items; does not include food and clothing, heating fuel and drugs

Local income tax rate: None

Local sales tax rate: None

Property tax rate: residential, $19.41 per $1,000 of assessed value; commercial, $34.54 per $1,000 of assessed value (2004)

Economic Information: Greater Springfield Chamber of Commerce, 1441 Main St., Springfield, MA 01103; telephone (413) 787-1555. Pioneer Valley Planning Commission, 26 Central St., West Springfield, MA 01089-2787; telephone (413)781-6045; fax (413)732-2593; email info@pvpc.org