Employer Confidence Weakens in December
BOSTON — Massachusetts employers gave a big “bah, humbug” to the year-end economy as business confidence withered in the face of a government shutdown and the largest one-month stock-market decline since the Great Depression.
The Associated Industries of Massachusetts (AIM) Business Confidence Index lost three points to 58.6 during December, its lowest level since December 2016. Confidence readings have dropped five points during the past 12 months.
The retreat was led by an 8.6-point drop in employer views of the national economy, and a 4.7-point drop among manufacturing companies. Overall confidence remains within optimistic territory, but less comfortably so than earlier in 2018.
“The Massachusetts economy remains strong, with a 3.3% growth rate and an unemployment rate of 3.4%, but employers are increasingly concerned about factors such as financial-market volatility, a dysfunctional national political debate, and challenges such as the cost of providing health insurance to employees,” said Raymond Torto, chair of AIM’s Board of Economic Advisors (BEA) and lecturer at Harvard Graduate School of Design.
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.