Massachusetts’ professional, scientific, and technical services sector has taken a hit since 2020, in a five-year economic slowdown that has placed the state below national averages for growth in an area where it has long been a leader.

A report released Thursday by the Boston-based Pioneer Institute found that the sector, which includes research and development, engineering, and science consulting, began to perk up in 2024 after two years of substantial decline. But Massachusetts still trails the national average, and those numbers could continue to fall as federal funding cuts threaten Massachusetts’ key industries — education, health care, and life sciences — that support 20 percent of the jobs in the state.

The free-market oriented Beacon Hill thinktank said the report highlighted the challenges at the federal level, but its leaders suggested that state-level tax and regulatory process are creating a significant obstacle on their own.

Kendall Square is a hub of the state's tech and life science industries.Dave Burk/SOM/Dave Burk

“The Trump administration’s actions on NIH grants and tariffs will create a significant drag on Massachusetts’ growth,” said Jim Stergios, executive director of the Pioneer Institute, in a news release. “But it’s our own policies that are driving up housing costs and pushing residents and employers out. Beacon Hill needs have a greater sense of urgency to address these self-inflicted wounds.”

Massachusetts’ share of the national gross domestic product in the professional, scientific and technical services sector decreased by 6.6 percent from 2020 to 2024, according to the institute.

The slow in growth in the area runs contrary to national trends. Massachusetts is the only state among a group of competing states that saw less growth in the research-centered sector from 2020 to 2024 than it did from 2015 to 2019, said economic research associate at Pioneer Aidan Enright.

Between 2015 and 2019, the sector grew at twice the rate of any other in the state.

“Where I’m a little more pessimistic is these national factors that are at play that disproportionately impact Massachusetts and that in 2023 and 2024, the lack of growth was specific to Massachusetts,” said Enright.

The total value of all products and services produced in Massachusetts’ private sector, or the gross state product, grew by 12.5 percent from 2020 to 2024, falling just short of the 13.3 percent national average and several percentage points less than what the report identified as “competitor states”: Florida, Texas, and North Carolina.

Massachusetts now has the 28th fastest growth rate for per capita real gross state product, the institute found, after being the fourth fastest for two decades.

Despite the slow in growth, Massachusetts still has the second highest per capita real gross state product in the nation at nearly $90,000 in 2024, the report states.

Maren Halpin can be reached at maren.halpin@globe.com.