Briefcase

Employer Confidence Strengthens in October

BOSTON — Confidence among Massachusetts employers rose for a second consecutive month during October, bolstered by a surprising improvement in the outlook among manufacturers and the continued strong performance of the state economy. The Associated Industries of Massachusetts (AIM) Business Confidence Index rose 0.3 points to 56.2 last month, 0.6 points higher than in October 2015. The increase was driven by a 2.6-point jump in the manufacturing index, which has lagged overall confidence readings for the past 18 months as companies struggled with economic weakness in Europe, China, and other key export markets. The increase came as the Massachusetts unemployment rate fell to 3.6%, its lowest rate since the dot-com boom of 2001. The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009. It has remained above 50 since October 2013. Almost all of the sub-indices based on selected questions or categories of employer were up in October. The Massachusetts Index, assessing business conditions within the Commonwealth, gained 0.9 points to 57.9, leaving it a healthy 3.8 points ahead of the same time last year. The U.S. Index of national business conditions remained unchanged at 49.2, 1.7 points lower than its level of October 2015. Employers have been more optimistic about the Massachusetts economy than about the national economy for 78 consecutive months. The Current Index, which assesses overall business conditions at the time of the survey, increased slightly to 56, while the Future Index, measuring expectations for six months out, rose 0.3 points to 56.3. The future view is virtually the same as it was a year ago. The three sub-indices bearing on survey respondents’ own operations also strengthened. The Company Index, reflecting overall business conditions, rose 0.2 points to 57.9, while the Employment Index surged 0.9 points to 55.4. The Sales Index lost ground, however, falling 1.2 points during October and 3.9 points during the previous 12 months.