Watch to see more from Brian Canina:
Clouding the Issue
The Forecast Calls for … More Uncertainty
It’s called the ‘quits rate.’
As that name suggests, it represents the number of employees who voluntarily quit their jobs as a percentage of total employment.
When times are good for workers, the quits rate is understandably higher. When times are not so good, or when there are high levels of anxiety and uncertainty about the economy and the jobs market — and that would describe the current climate — the rate starts to come down.
“Over the past few months, quits have dropped precipitously,” said Bob Nakosteen, a semi-retired Economics professor at UMass Amherst’s Isenberg School of Management, reflecting on a jobs market increasingly described with the words ‘stuck’ and ‘stagnant.’ “People are hanging onto their jobs for dear life, which tells me that they’re not getting offers to entice them to quit, and they don’t feel that they can take the risk to leave their job and look for another one, because they’re just not out there.”
This sentiment is reflected in the latest jobs report: the Bureau of Labor Statistics reported a few weeks back that the U.S. economy lost 105,000 jobs in October and added 64,000 jobs in November, with the unemployment rate rising to a four-year high of 4.6% that month.
The falling quits rate and the jobless numbers are just two of the many ways economists and business leaders are trying to quantify and qualify the current economic scene, often described as ‘confusing,’ although quantifying is more difficult with fewer hard numbers to work with — in general, and even more so because of the recent government shutdown.
Another measure is the Associated Industries of Massachusetts’ (AIM) Business Confidence Index, or BCI. Scored on a 100-point scale, with 50 indicating neutrality, the monthly BCI soared to 57.7 when President Trump was elected in November 2024, but quickly fell to 41.5 (a COVID-like level) in April when Trump’s tariff plan was announced, and has continued to hover below 50 since, AIM President Brooke Thomson said.
She told BusinessWest that, overall, the business community doesn’t like uncertainty, and the prospect for more in 2026, reflected in the BCI numbers, poses questions about what kind of year it will be.
Between the quits rate, the BCI, and other measures, the emerging picture is one of continued uncertainty, even about the near term, let alone several quarters out, given ambiguity about matters from tariffs, interest rates, the jobs market, and the AI investment boom (and whether that bubble is about to burst) to inflation and affordability crunch.
There is some optimism following the most recent quarter-point interest rate drop early last month, but there will need to be more of those, and likely more substantial cuts, in the year ahead for a deep impact to result, said those we spoke with.
Bob Nakosteen
“People are hanging onto their jobs for dear life, which tells me that they’re not getting offers to entice them to quit, and they don’t feel that they can take the risk to leave their job and look for another one, because they’re just not out there.”
“With the recent Fed rate cuts, we’re expecting things to probably pick up, modestly, because there is still some potential uncertainty, economically,” said Brian Canina, president and chief operating officer of Holyoke-based PeoplesBank. “If the Fed continues to lower rates, and the lowering of the rates on the short end of the interest rate curve impacts the long-term interest rate, and those come down, we may see some increased lending and some potential refinancing.”
Overall, said Nakosteen, there is a mixed economic picture for 2026, with expectations for slower growth and perhaps — that’s perhaps — a mild, short recession.
But it’s very difficult to project without hard data, with so much uncertainty clouding whatever picture the data presents, and amid a variety of mixed signals, such as GDP rising a robust 4.3% in the third quarter at the same time as bourbon maker Jim Beam announced it would be shuttering one of its distilleries in Kentucky, in part due to tariffs and slumping demand.“
The data are not painting a clear picture at all. Unemployment is going up — kind of gently, but it’s going up. Inflation is rising — kind of gently, but it’s still rising,” he said, adding that the country may be heading for what economists call ‘stagflation,’ a somewhat rare economic condition characterized by high inflation, stagnant economic growth, and high unemployment occurring simultaneously.
Ups and Downs
As he talked about 2025 and what kind of year it was for the region, Aaron Vega spoke from two different, but in many ways similar, perspectives — first as outgoing director of Planning & Economic Development in Holyoke and the incoming president and CEO of the Western Massachusetts Economic Development Council.
Brian Canina
“With the recent Fed rate cuts, we’re expecting things to probably pick up, modestly, because there is still some potential uncertainty, economically.”
“It’s like two steps forward, two steps back, one step to the side,” he said, noting that this was true in Holyoke, but also the region. While new businesses were added, including Pickleball Kingdom at the Holyoke Mall, and new initiatives launched, there were setbacks, such as recent layoffs at Yankee Candle and Sublime System’s decision to pause its project to build a plant in Holyoke following the loss of a U.S. Department of Energy grant.
Elaborating, Vega said the region’s economy was buffeted by some strong headwinds, most of which were beyond its control. These included tariffs, policy changes, inflation, ongoing changes in the retail realm, and even the price of energy.
“We all know that Massachusetts is a bit of an expensive state in which to do business. So how do we entice businesses to come to Massachusetts, and then, how do we get them to come to Western Massachusetts when we’re still developing our hubs and developing our initiatives?” he asked, adding that these same headwinds will prevail in 2026.
This up-and-down nature of the economy was reflected in the BCI numbers for 2025, said Thomson, noting that the index would rise a few points one month, drop a point or two, then rise again, and then fall again; it was up two points to 48.5 in November, for example. This wavering is a symptom of uncertainty and policies that foster it, she said, adding that the sluggish performance in 2025 — some economists say the country is teetering on recession if not officially in it — was different from such cycles in the past.
“Most recessions, or downturns, occurred because of some sort of situation in the financial markets, some sort of causation that deeply hit our financial markets,” she explained. “This was different; it’s almost self-inflicted through policy. There’s nothing inherently wrong in the financial sector.
Aaron Vega
“It’s like two steps forward, two steps back, one step to the side.”
“There’s still money out there to lend to businesses, there’s opportunities for businesses, but there is feeling on behalf of business leaders that they don’t know what to expect … ‘I don’t know what my bottom line is going to be, I don’t know what my costs are going to be, so I’m not going to take out that loan, I’m not going to do that expansion project, I’m not going to give out big bonuses or hire more people because I don’t know what’s around the corner.’”
This was the picture throughout 2025, and this sentiment is expected to continue into at least early 2026, Thomson said, adding, again, that business owners like consistently and reliability, and these are two commodities missing at the federal policy level, and there has been a resulting trickle-down to states, with some, like Massachusetts, getting hit harder than others.
Indeed, several sectors in the Bay State were deeply impacted by federal policy changes, including healthcare (see related story on page 25), education, and especially manufacturing, due to tariff policies, she noted.
“I’ve been throughout the state this year visiting manufacturers, and even the ones that are managing to do all right are doing it because they’re being really, really creative, despite this,” she added. “And they would never say they’re thriving; they’re saying, ‘we’re being creative, and we’re managing it.’ But I have more stories with people saying, ‘this is killing me — I’m barely making it,’ and there have been two or three small business that have actually closed their doors.”
Fear of the Unknown
Carol Campbell, president of Chicopee Industrial Contractors (CIC), spoke for many business owners when she said 2025 was “an interesting year,” marked by those headwinds Vega mentioned, and especially tariffs.
CIC works with manufacturers, handling rigging, machinery moving, machine installation, and other services, and many of those machines are made overseas, said Campbell, adding that the tariffs placed on them — or the threat of tariffs, as well as general uncertainty about what might come next — prompted some hesitation and project delays.
Brooke Thomson
“Most recessions, or downturns, occurred because of some sort of situation in the financial markets, some sort of causation that deeply hit our financial markets. This was different; it’s almost self-inflicted through policy. There’s nothing inherently wrong in the financial sector.”
“What we found was just a fear of the unknown,” she explained, adding that, by March, even Fortune 500 companies were hitting pause on some projects.
Things improved as the year went on, and, overall, 2025 was a solid year, she said, adding quickly that there is optimism about 2026, but also some lingering fear of the unknown.
As they look ahead, those we spoke with said several factors will determine the trajectory of the economy, especially the AI investment boom and whether that bubble will burst, inflation, consumer spending, business confidence (especially when it comes to hiring), and, of course, interest rates.
“A lot of it will hinge on what happens with interest rates,” said Canina, adding that the size and frequency of cuts will ultimately determine the impact on the economy.
“A 25-basis-point change is not necessarily going to have a significant impact,” he explained. “But when you see the Fed make consecutive rate cuts, and if they were to drop a full percentage point in a six- to 12-month period of time, I think by the 12-month point you’ll start to see some pickup, and then, it will continue to grow from there.”
Elaborating, he said many businesses remained on the sidelines in 2025 when it came to large investments and expansion initiatives, due mostly to uncertainty about the economy and where things were headed, and partly to interest rates still well above those enjoyed just a few years ago, post-COVID. He’s optimistic that some will get back in the game in the months to come.
Jeff Sullivan, president and CEO of Springfield-based New Valley Bank, agreed.
“The mortgage rates and the longer-term rates, we don’t see them coming down quite as much,” he said. “It’s nothing that’s going to change consumer behavior — we don’t see a refinance boom.
Carol Campbell
“What we found was just a fear of the unknown.”
“Meanwhile, the idea of borrowing money at 6% or 6.5% doesn’t seem to be unpalatable,” he added, opining that current rates are not stifling activity. “It’s not stopping deals from happening. Would they rather borrow at 5%? Absolutely they would, but where we are now is tolerable. When the rates peaked nine or 10 months ago and it was hard to get under 7%, that was starting to chill the market, but now we’re back down to 6% or 6.5%, and that’s not stopping anyone.”
Overall, Sullivan is more upbeat about 2026 than some others we spoke with. He said 2025 was a solid year for the bank, in deposit growth and otherwise, while he also noted cautious optimism among many commercial customers.
“The overall mood is generally positive,” he said. “The people who are more nervous are the people who do business with the general public, especially with the middle-class, working-class general public. The firms that are business-to-business sales … I think the optimism is there. The firms that are dependent upon lower- and middle-income consumers being their customers … I’m more worried.
“It’s the K-shaped recovery,” he went on. “The rich get richer, and the poor get poorer; we definitely see that sentiment among our customer base.”
Meanwhile, he expects the recent wave of mergers and acquisitions to continue, as businesses search for all-important scale and private equity firms continue their hunt for opportunities across seemingly all sectors of the economy.
“These private equity companies have a belief that they’re going to be so successful, they’re paying top dollar to acquire local companies and roll them up into a much larger platform,” he said, adding that the trend extends across the board, even to HVAC contractors, alarm companies, and sprinkler companies. “We hear from customers every quarter that are taking buyout offers; they’re saying, ‘I can’t say no to this. It’s so much money; it’s more than I thought I’d ever get. I wasn’t ready to sell, but I can’t say no.’”
As a brewery, we operate at the intersection of hospitality and manufacturing. According to our national trade association, the craft beer industry is expected to experience its third consecutive year of volume decline, and the second year in which brewery closures outpace new openings.
While rising prices, increased demand for services, and reductions in federal resources strained the Western Mass. nonprofit community in 2025, our nonprofit partners demonstrated resilience. More than 50% of the nonprofits serving our community reported funding losses, forcing them to do more with less.
As Caolo & Bieniek looks forward to 2026 and beyond, the only thing we know for certain is there will continue to be change in the architecture and construction industry.
Overall, 2025 was a great year for business from our vantage point. We witnessed quite a bit of business succession as well as real estate activity, particularly in the commercial space. Favorable downward movement in interest rates was certainly a contributing factor, a catalytic trend that will inevitably continue into 2026 with at least one more interest rate cut in the forecast.
The labor and employment law landscape for businesses is evolving in 2026. This year, employers will be navigating Massachusetts’ new pay transparency requirements while dealing with growing oversight of AI tools in hiring and workplace practices.
Holyoke Mall’s strength lies in creatively curating the right tenant mix to drive revenue, enhance customer experience, strengthen market relevance, and enhance the overall asset value. We are optimized for sustained financial growth well into the future as we embark upon a substantial reinvestment into the infrastructure. This three-phase, multi-year enhancement project includes new paving, curbing, and landscaping; fresh paint on the exterior building, new signage packages, and interior upgrades that have already started and continue into 2026.
At Access Care Partners, we serve older adults and people with disabilities of any age, as well as providing support to families and caregivers. As we look at 2026, we know Massachusetts has a rapidly growing aging demographic; already, 27% of the Commonwealth’s current population are age 60 or older. This trend will continue for the next 10 to 15 years and bring with it increasing care needs, including dementia, chronic medical conditions, and behavioral health issues.
I think Western Mass. restaurants are going to continue to experience a thinning of the herd due to a shrinking skilled laborforce, rising food costs, and decreased consumer spending. But necessity is the mother of innovation, and these restaurants are modeling winning strategies:
For more than 100 years, United Way of Pioneer Valley has stood alongside our neighbors in Hampden County, Granby, and South Hadley. Today, that commitment matters more than ever. We face challenges that demand collaboration, local knowledge, and unwavering dedication.
Springfield’s commercial real estate market stands at an inflection point. As interest rates ease, capital is slowly returning to secondary markets that offer value investors can no longer find in gateway cities.
In 2026, healthcare staffing will continue to remain in high demand due to an aging population, increasing medical and behavioral health needs, high turnover and burnout, and ongoing labor shortages across the field. Hospitals, long-term care facilities, behavioral health programs, home care agencies, and recovery centers will continue to rely on staffing agencies to fill gaps caused by retirements, burnout, and turnover.
In 2026, business hits the intersection of high-tech efficiency and deeply human experience. AI is taking hold in the local marketplace, helping rural businesses punch above their weight. And it’s our job to help them compete. Online shopping isn’t slowing down, either; convenience is here to stay.
If there is one thing we can count on in 2026, it’s that nobody in the cannabis industry truly knows what’s coming. The news about the Trump administration rescheduling cannabis to Schedule III have created the illusion of clarity, but let’s be honest. This is not the first time a White House has said, ‘hurry up and look at this issue.’ An executive order to study something is not the same as meaningful reform, and history has taught this industry not to confuse motion with progress.
Entering 2026, investors continue to expect more from their wealth management relationship. Simply managing their investments is not enough. They want a dedicated team of professionals to handle all of their finances. Whether it be their financial advisor walking them through their retirement plan options or a portfolio manager articulating market dynamics, clients expect a holistic approach that is professional and consistent with their expectations.
For community colleges, 2026 will be defined by one word: integration.
An education grounded in the study of the humanities provides the skills, insights, and wisdom to deepen our understanding of the human condition and to examine social phenomena through a variety of lenses. As a result, we can better respond to some of society’s most pressing and thorny issues. So it puzzles me that there exists an increasing lack of appreciation for the liberal arts and humanities.
The ‘take the trip’ mindset is going to cause the biggest travel trend since 2022’s revenge travel. Experiencing the inability to see loved ones on demand due to a pandemic can really reset life’s priorities. Most people keep that scary limitation in the back of their minds and, in turn, have spent more time with family. But a lot of life can happen in five years. In addition to great joys, the past few years may have also delivered immense loss. Most of us learned from navigating tragedies. We know how precious the Rolodex of life’s moments can be.
The automotive industry is entering an exciting year, and at TommyCar Auto Group, we’re eager to embrace the opportunities ahead. Supply-chain improvements have increased vehicle availability, and manufacturers are offering exceptional incentives, including strong rebates and low-rate APR financing. With favorable market conditions expected to continue into 2025, now is the perfect time to purchase your next vehicle.
As we enter 2025, the impact of inflation on valuations continues to be a problem, along with challenges around policies covering older buildings and properties near water. We do expect this to level off in the coming year, as we recover from a significant spike in the cost of labor and materials.
The wealth-management landscape is undergoing a significant transformation. Clients increasingly demand more than just investment management; they seek holistic financial planning and advice. Disillusioned by conflicts of interest and product-centric approaches, clients are increasingly voting with their feet, migrating toward independent firms that offer objective advice without the pressure to ‘sell’ products.
The failure of Silicon Valley Bank in 2023 resulted in a regulatory focus on balance-sheet management and liquidity for banks of all sizes. On balance, liquidity to fund growth will continue to be a challenge for many banks and will contribute to more mergers as a means of increasing efficiencies and creating more deposit-growth opportunities.
The property and casualty insurance industry in 2025 continues to navigate challenges stemming from climate change, inflation, and evolving technology. Catastrophic weather events, such as hurricanes and wildfires, have intensified claims, driving insurers to reassess risk models and pricing. Inflation has raised the cost of claims, particularly in auto and property sectors.
Comcast serves thousands of businesses and residents with Xfinity and Comcast Business products and services across Western Mass. Over the last three years, the company has invested nearly $909 million in our state-of-the-art network across Massachusetts.
As we look forward to 2025, Hogan Technology is poised for a year of growth and innovation. Building on the strong foundation of a successful 2024, we anticipate a significant 20% increase in revenue. Our IT sales team has already secured new business commitments extending into the second quarter, positioning us favorably for sustained growth.
Encharter Insurance had an excellent year in 2024, and we anticipate that success to continue in 2025. The challenges faced by businesses and consumers due to increasing insurance premiums have brought many to our door, seeking alternative options and savings.
It looks like 2025 shaping up to be an exciting year for the Markens Group and the associations we serve.
In today’s dynamic landscape, where geopolitical risk, climate change, rising healthcare costs, and the rapid advancement of AI are reshaping industries, our clients face constant challenges. The speed of change is dizzying, but those who embrace new approaches and solutions will improve their profitability, workplace vitality, and resilience.
While some challenges likely in 2025 are reminiscent of those faced in 2024, it’s important to note that Country Bank has shown remarkable resilience. While a considerable expense, the continued escalation of fraud is being effectively managed, both in actual dollars lost and in the cost of fraud-prevention systems.
As we look ahead to 2025, we anticipate a remarkably busy year as we continue to collaborate with our customers to execute the timely replacement of thousands of computers and software packages ahead of the end of Windows 10 support deadline in October.
The future of public transportation, particularly intercity buses, appears bright. Fewer new driver’s licenses were issued last year than in the past 50 years, indicating a preference for public transportation. Inter-city buses are becoming increasingly popular due to their high frequency of service, reasonable fares, and onboard amenities that allow passengers to work, relax, and entertain themselves while traveling.
In 2025, workplaces will highly value being adaptable and open to learning so employees can quickly handle changes in their industries. Knowing how to use digital tools will be important as technology becomes part of daily work. Being able to think critically and solve problems will be essential for tackling complex challenges, working alongside AI and automation.
The world of marketing and public relations has been ever-changing since its beginning, and this upcoming year will be no exception. Right now, we’re seeing a boom in the podcast industry and utilizing hosts as influencers and collaborators on social media to advance our clients’ expert positioning. Authenticity, ‘edutainment,’ and storytelling continue to be the priority for online content, with a heavy emphasis on video.
A new year can feel like a reset, and many business professionals become reinvigorated and motivated to seek new opportunities upon its outset. Indeed, a new year creates momentum toward building business again. In looking for new growth opportunities for the Royal Law Firm in the new year, I have adopted a continued mindset of thinking outside of the box.
Regardless of what 2025 brings, I am confident in OTO’s resiliency and ability to adapt as we have for the past 30 years. OTO will continue to focus on growth and strengthening our team by reinforcing company culture and values, while offering flexibility, a space for authenticity, and clear communication of responsibilities and goals; these are all essential in 2025.
Banking has always been about people and communication, and in today’s world, that has never been more apparent. One of our most important roles as bankers is to communicate with our customers about suspicious account activity, whether that includes potential cyber crime or low-tech frauds such as stolen checks. We at New Valley Bank recommend a few simple good habits for business owners:
The Springfield Regional Chamber is a business support organization that serves its 400 members through legislative advocacy, informative communications, and impactful programming. We are charging into 2025 with a full slate of events designed to inform, connect, and inspire our members. From Rise & Shine breakfasts to the Mayor’s Forum to the Fire & Ice reception, each event offers our members the chance to learn and network.
As we head into 2025, conversations in our office are focused on energy codes, construction costs, and housing. Massachusetts is recognized as a leader in energy efficiency in large part due to our aggressive energy codes.
Three words come to mind when I think about a community-college education in Western Mass. today: access, belonging, and possibility. When the Healey-Driscoll administration made community college free for eligible students in Massachusetts, we opened doors for thousands across our region. In Hampden County, where nearly 40% of residents lack post-secondary education, this access is crucial for economic growth. Our 12.6% enrollment increase in 2024 reflects this expanding opportunity.
In 2025, financial institutions, especially credit unions, will navigate a landscape rich with both challenges and opportunities. Interest rates remain elevated, reducing people’s ability or willingness to borrow. High mortgage rates and a low number of homes on the market makes it difficult for our members to refinance or move into their next homes. Now there are fewer rate cuts expected in 2025 than previous predictions had indicated, so much-needed relief from high rates will not come to fruition.
This past year was one of growth and learning for Sexton Roofing & Siding. We expanded our offerings, strengthened our team, and gained invaluable insights along the way. Now, as we step into 2025, we’re ready to build on this strong foundation and push toward an even brighter future.
“Supply chain is also a big problem because, if businesses can’t get the product, they can’t sell it. And if they want the product bad enough, they pay increased shipping costs to try to make product available; all this is leading to diminished bottom lines.”
Entering a new year, there are always question marks about the economy and speculation about the factors that will determine just what kind of year it will be. For 2021, there are far more questions — and fewer definitive answers — and the speculation comes in layers. A great many of them. Much of this speculation involves the pandemic and, with vaccines becoming available to ever-greater numbers of people, whether we are truly seeing light at the end of the tunnel, the beginning of the end (of the pandemic), or any of those other phrases now being used so frequently. But there are other things to speculate about as well, including what the landscape will look like when and if things to return to normal, or a ‘new normal,’ another phrase one hears a lot these days. Will the jobs that have been lost come back? Will people pick up old habits regarding going to restaurants, the movies, the doctor’s office, or sporting events? Will businesses return to their offices? And will their offices be the same size and in the same community? Another phrase you’re hearing — and will read in the stories that follow — is ‘pent-up demand.’ Many businesses, from eateries to colleges and universities to medical practices, are counting on it, but will it actually materialize? These are all good questions, and for some answers, we turned to a panel of experts for a roundtable discussion, without the roundtable. Collectively, they address the question on everyone’s minds: what is the outlook for 2021?
More of the same. That’s what the experts are predicting for this region, and the country as a whole, when it comes to the economy. And by more of the same, they mean growth that is steady if unspectacular — even with tax reform — and few if any signs of what could amount to real trouble. “Another boring year,” was how one economist put it. But for many businesses, boring is more than acceptable.
After six years of largely uninterrupted economic growth in both Massachusetts and the U.S. as a whole, questions have arisen as to how long the expansion can last, especially coming on the heels of an unusual election season and amid sluggish economic trends internationally. The consensus seems to be that the present course should hold in 2017, but also that recessions are a regular occurrence in the American economy, and it wouldn’t take much to spark a slowdown. For now, though, cautious optimism reigns.
