Employer Confidence Strengthens in March
BOSTON — Massachusetts employers grew more confident during March as turbulence in China and other key global markets subsided. At the same time, a significant gap has developed between the bullish outlook of service companies and a less optimistic view among manufacturers that is also reflective of national developments.
The Associated Industries of Massachusetts (AIM) Business Confidence Index rose 1.4 points to 56.5 last month, its highest level since November and well above the 50 mark that denotes a positive economic outlook.
The index for service companies and other non-manufacturers increased to 61.3, while the manufacturing index fell to 54.8, down 7.1 points from its level in March 2015.
The results come a week after the state announced that the unemployment rate dropped to 4.5% during February and that employers added 14,400 jobs during the first two months of the year.
“The good news is that the Massachusetts and U.S. economies have proven remarkably resilient in the face of weak growth globally that unsettled financial markets at the beginning of the year,” said Raymond Torto, chair of AIM’s Board of Economic Advisors (BEA) and lecturer at Harvard Graduate School of Design. “What happens next? Employers here in Massachusetts appear to be generally optimistic about their prospects during the next six months, though the outlook among manufacturers remains muted by global uncertainty, weakening corporate earnings, the strength of the dollar, and rising credit risk.”
The AIM Business Confidence 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. The index has remained above 50 since October 2013.