Slight slowdown seen in state's economy

The state's economic growth rate held steady over the summer and only a slight slowdown is predicted over the next six months, according to a report released on Wednesday.

The state's economy grew at an annualized rate of 3.6 percent in the third quarter, the same pace as the previous quarter, according to the ''MassBenchmarks'' current economic index published by the University of Massachusetts' Donahue Institute. The state's growth rate lagged the U.S. gross domestic product estimate of 3.9 percent for the third quarter.

''The financial turmoil related to the subprime mortgage crisis has not spread beyond the residential housing sector and financial institutions caught in the complex web of mortgage lending,'' Alan Clayton-Matthews, a UMass professor and co-editor of MassBenchmarks, said in a statement.

The state economy has slowed moderately since the start of the year, when it grew at an annualized rate of 4.1 percent in the first quarter. The MassBenchmarks leading economic index predicts an annualized growth rate of 3.4 percent over the next six months.

''Although many households and investors who counted on a rising housing market are being hit hard,'' Clayton-Matthews said, ''the technology, science and knowledge sectors are continuing to the buoy the state's economy and are expected to do so over the next two quarters.''