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Daily News

BOSTON — Confidence among Massachusetts employers rose to its highest level in more than three years last month as the state and national economies continued to expand despite renewed COVID-19 outbreaks.

The Associated Industries of Massachusetts (AIM) Business Confidence Index marked its 30th anniversary in July by rising 2.2 points to 65.6, some 20 points higher than a year ago.

The increase was driven by a strong outlook among manufacturers and a brightening assessment by all employers of current economic conditions.

Those conditions included an estimated 6.2% annualized growth in Massachusetts real GDP during the second quarter and a 6.5% annualized surge nationally as federal stimulus dollars and the availability of COVID vaccines stoked the economic recovery. The Massachusetts economy had grown at a 6.9% annual clip in the first quarter.

The Massachusetts unemployment rate fell to 4.9% in June as employers created 9,400 jobs.

“Every component of the Business Confidence Index rose during July, from employer assessments of their own business prospects to their hiring plans. Employers see the recovery gaining momentum despite the presence of the Delta variant of COVID-19. With the reopening of the Massachusetts economy, consumer spending is proving its resilience,” said Sara Johnson, chair of the AIM Board of Economic Advisors (BEA) and executive director of Global Economics at IHS Markit.

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were all positive during July. The confidence employers have in their own companies rose 3.0 points to 67.7, leaving it 20 points better than it was during the depths of the pandemic a year ago.

The Massachusetts Index assessing business conditions within the Commonwealth increased 2.4 points to 66.0, up 17.2 points since July 2020. The U.S. Index measuring conditions nationally gained 0.1 point in July and 21.8 points for the year.

The Current Index, which assesses overall business conditions at the time of the survey, gained 3.3 points to 66.6. The Future Index, measuring projections for the economy six months from now, rose 1.3 points.

Confidence among manufacturing companies increased 3.9 points to settle 18.1 points higher than its year-earlier level. Large companies (70.6) were more bullish than medium-sized companies (65.5) or small companies (59.1). Companies in Eastern Mass. (69.2) were significantly more confident than those in Western Mass. (61.7).

Alan Clayton-Matthews, professor emeritus of Economics and Public Policy at Northeastern University and a BEA member, said the American Rescue Plan Act and expansionist monetary policy continue to stimulate consumer demand and hiring by employers.

“Economic growth is expected to remain strong in the second half of the year, but there is a risk that rising COVID-19 Delta-variant cases could slow the recovery,” Clayton-Matthews said.

AIM President and CEO John Regan, also a BEA member, said the $1 trillion infrastructure bill moving through Congress should allow Massachusetts to make significant new investments in transportation, utilities, and power infrastructure. The bill contains $550 billion in physical infrastructure spending.

“Roads, bridges, power-delivery systems, and transportation are key elements of sustainable business growth,” Regan said. “The proposed spending plan will be another pillar of the recovery and has the added advantage of being funded by reallocating existing federal resources with no additional taxes.”

Daily News

BOSTON — Karen Wallace has joined Associated Industries of Massachusetts (AIM) as executive vice president of Marketing. She will develop and lead strategies to support expansion of the association and implement AIM’s belief that business can be a positive force for change in creating a better, more prosperous Commonwealth.

A native of Springfield, Wallace was most recently a consultant to Northeastern University Khoury College of Computer Sciences, the Northeastern University College of Professional Studies, and the Isabella Stewart Gardner Museum. She previously spent more than 20 years in marketing positions at Fidelity Investments, including as senior vice president of Marketing, Communications, and Branding. She has also held senior marketing positions at MFS Investment Management and Sun Life. She brings a strong capacity for using data to drive marketing and business growth.

Wallace earned both a bachelor’s degree and an MBA from Simmons University in Boston. She has completed professional-development courses at MIT Sloan School, Harvard Business School, and Tuck School at Dartmouth College. She serves as a board member for the Boston Children’s Chorus and is a member of the National Black MBA Assoc. and Alpha Kappa Alpha Sorority Inc.

Daily News

BOSTON — Confidence among Massachusetts employers rose for the fifth time in six months during June amid signs that the recovery of the labor market is gaining momentum.

The Associated Industries of Massachusetts (AIM) Business Confidence Index rose 1.5 points to 63.4 last month, leaving it 14.4 points higher than a year ago. The increase was driven in part by the brightest assessment of the employment picture since April 2018. Hiring appears to be picking up after companies struggled for months with one of the tightest labor markets in decades.

Nationally, the government announced that U.S. employers added 850,000 jobs in June, well above the average of the previous three months and a sign that companies may be having an easier time finding enough workers to fill open jobs.

The Massachusetts unemployment rate fell to 6.1% during May as employers created 9,200 jobs. Massachusetts has gained an estimated 357,000 jobs during the past 12 months.

“The June Business Confidence Index and the most recent government reports suggest that hiring is accelerating as employers attract workers with higher pay. Wages nationally jumped 3.6% last month from a year ago,” said Sara Johnson, chair of the AIM Board of Economic Advisors (BEA) and executive director of Global Economics at IHS Markit. “At the same time, there are 6.8 million fewer jobs in the United States than before the pandemic, meaning we still have a long way to go in the employment recovery.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were mostly positive during June. The Employment Index rose 2.5 points as companies finally began to locate workers to fill open jobs and boost output. The employment reading has increased by more than 11 points since June 2020.

The confidence employers have in their own companies rose slightly to 64.7, 13.1 points more than it was a year ago. The Massachusetts Index assessing business conditions within the Commonwealth increased 2.9 points to 63.6, up 16.8 points since June 2020. The U.S. Index measuring conditions nationally gained 1.3 points in June and 15.2 points for the year.

The Current Index, which assesses overall business conditions at the time of the survey, gained 3.0 points to 63.3. The Future Index, measuring projections for the economy six months from now, was almost flat, losing 0.1 point to 63.4. Confidence among manufacturing companies declined 0.8 points, but remained 11.5 points higher than its year-earlier level.

Large companies (66.4) were more bullish than medium-sized companies (62.0) or small companies (60.7). Companies in Eastern Mass. (67.1) were significantly more confident than those in Western Mass. (59.6)

Michael Tyler, CFA, vice chair of BEA and chief Investment officer at Eastern Bank Wealth Management, said the risk of sustained long-term inflation remains low despite the near-term upward pressure on wages and some commodities.

“There is some inflation, to be sure, but mostly it’s due to base effects (that is, low prices a year ago when lockdowns were in place) or supply-chain disruptions that can be resolved.,” he said. “Today’s inflation should not be misinterpreted as a fundamental shift in the current economic climate.”

AIM President and CEO John Regan, also a BEA member, said the recent debate over whether the Massachusetts Legislature or Gov. Charlie Baker should control distribution of $5.3 billion in federal stimulus money from the American Rescue Plan Act should not obscure the importance of using some of the money to stabilize the unemployment-insurance system. The Legislature and governor froze unemployment-insurance rates and separately spread out an unexpected surge in solvency rates over the next 20 years.

“The unemployment system will still be burdened for decades by the fallout from COVID-19 and the economic shutdowns of 2020,” Regan said. “The one step that remains is for policymakers to use some of Massachusetts’ federal stimulus money to stabilize the unemployment system for the long term.”

Daily News

BOSTON — An emerging economic recovery and good news about COVID-19 pushed business confidence slightly higher in Massachusetts during May.

The Associated Industries of Massachusetts (AIM) Business Confidence Index rose 1.2 points to 61.9 last month, leaving it almost 20 points higher than a year ago. Confidence levels remain comfortably in optimistic territory.

The increase was the fourth in five months and came as Massachusetts Gov. Charlie Baker announced the resumption of full business activity in the Commonwealth. The federal government also said vaccinated people no longer need to wear masks in most public settings.

Meanwhile, the Massachusetts unemployment rate fell to 6.5% during April as employers created 5,100 jobs. Massachusetts has gained an estimated 392,300 jobs since the nadir of the COVID crisis.

“Employers remain confident amid a state economy that is projected to grow at a 8.7% annual rate in the second quarter and 6.9% in the third quarter of this year,” said Sara Johnson, vice chair of the AIM Board of Economic Advisors (BEA) and executive director of Global Economics at IHS Markit. “The economy still faces challenges ranging from persistent worker shortages to global supply-chain disruptions, but there is a sense that we are returning to a more normal economic situation.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were mostly positive during May. Employers’ confidence in their own companies posted its seventh increase in eight months, rising 2.2 points to 63.8. The Company Index was 18.1 points higher than it was a year ago.

The Massachusetts Index assessing business conditions within the Commonwealth was 60.7, up 0.3 point for the month and 23.3 points since May 2020. The U.S. Index measuring conditions nationally lost 0.9 points in May but gained 21.6 points for the year.

The Current Index, which assesses overall business conditions at the time of the survey, surged 3.7 points to 60.3. The Future Index, measuring projections for the economy six months from now, lost 1.3 points for the month at 63.5.

The Employment Index was flat at 56.9 as employers now able to open at full capacity confronted an acute shortage of qualified workers. A separate AIM survey last month revealed that 60% of employers currently have job openings, and 53% cannot find qualified workers to fill those vacancies.

Confidence among manufacturing companies increased 2.2 points, leaving it 19.3 points higher than its year-earlier level. Small companies (63.2) were more bullish than large companies (62.1) or medium-sized companies (60.9).

Katherine Kiel, professor of Economics at the College of the Holy Cross and a BEA member, said Baker’s decision to lift almost all COVID-related business restrictions will help public-facing industries that were most affected by the pandemic.

“The retail, hospitality, restaurant, and travel sectors that lost hundreds of thousands of jobs throughout Massachusetts last year now have the opportunity to bring back some of those jobs,” she noted. “At the same time, construction and other sectors are likely to benefit from federal stimulus dollars and a possible federal infrastructure bill.”

AIM President and CEO John Regan, also a BEA member, said the economic recovery received an important shot in the arm last week when the Massachusetts Legislature and the Baker administration took multiple steps to stabilize an unemployment-insurance system battered by the COVID recession.

Baker signed legislation that will moderate an unexpected spike in unemployment-insurance taxes by spreading the levies over the next 20 years. The new measure, together with a previous UI rate freeze and the administration’s announcement that Massachusetts will reinstate the requirement that people who collect unemployment benefits must actively search for a job, aims to stabilize the stressed UI system in the short term and encourage people to return to the workforce.

“These were important steps to helping employers and workers alike get back on their feet and move the economy forward,” Regan said. “The one step that remains is for policymakers to use some of Massachusetts’ federal stimulus money to stabilize the unemployment system for the long term.”

Daily News

SPRINGFIELD — Business confidence was virtually unchanged during April even as the Massachusetts economy surged with business reopenings, federal stimulus money, and widespread distribution of COVID-19 vaccines.

The Associated Industries of Massachusetts (AIM) Business Confidence Index fell 0.2 points to 60.7 last month after surging more than 10 points during the first quarter of 2021. The reading was 22.5 points higher than in April 2020 when pandemic-related business closures spread throughout the Commonwealth. Confidence levels remain comfortably in optimistic territory.

The April BCI came as MassBenchmarks reported that the state economy grew at a torrid 11.3% clip during the first three months of the year. Massachusetts employers created some 13,000 jobs during March, and the state unemployment rate fell to 6.8%.

“Employer confidence remains at a high level, and companies feel good about the underlying fundamentals of the economy,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA). “Confidence is even higher when employers look six months into the future, as they anticipate continued moderation of the public-health crisis.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index all moved in a narrow range during April. Employers’ confidence in their own companies fell 0.2 points after posting six consecutive monthly increases. The Company Index was 19.8 points higher than it was a year ago.

The Massachusetts Index assessing business conditions within the Commonwealth was 60.4, down 0.2 points for the month but 25.9 points better than in April 2020. The U.S. Index measuring conditions nationally lost 0.2 points in April and gained 26.4 points for the year.

The Current Index, which assesses overall business conditions at the time of the survey, slid a half-point to 56.6. The Future Index, measuring projections for the economy six months from now, was flat for the month at 64.8.

The Employment Index gained 1.1 points to end the month at 56.9, confirming the comments of many employers about the challenges of hiring and retaining skilled workers. A separate AIM survey last month revealed that 60% of employers currently have job openings, and 53% cannot find qualified workers to fill those vacancies.

Confidence among manufacturing companies remained steady at 59.5, leaving it 22.6 points higher than its year-earlier level.

Large companies (68.4) were more bullish than medium-sized companies (59.8) or small companies (54.6). Companies in Eastern Mass. (63.3) have a brighter outlook than those in Western Mass. (56.6).

Michael Goodman, acting provost and professor of Public Policy at UMass Dartmouth and a BEA member, said the strong growth of the Massachusetts economy during the first quarter is the result of federal fiscal policy that has boosted incomes and business and consumer spending, as well as rising vaccination levels. Both developments bode well for the Commonwealth’s economic outlook.

“The Future Index of the BCI is now almost 10 points higher than the Current Index, which sends a clear signal that Massachusetts employers anticipate a strong economic recovery,” Goodman said. “Absent some unexpected disruption to the vaccine rollout or the emergence of vaccine-resistant viral variants, we can expect our robust recovery to continue.”

AIM President and CEO John Regan, also a BEA member, said employers are also encouraged by the Massachusetts Legislature’s disciplined fiscal approach so far in 2021.

“Senate President Karen Spilka and House Speaker Ronald Mariano have both indicated that they do not expect Beacon Hill to impose new, broad-based business taxes this year, and that sends a strong message that lawmakers are committed to helping companies get back on their feet after the pandemic,” Regan said. “We remain concerned about some of the tax proposals coming out of Washington and about the prospect of an income-tax surcharge here in Massachusetts, but we are working with our partners in government to maintain an economy that encourages growth and jobs.”

Daily News

BOSTON — As the battle to moderate COVID-19 continues, Massachusetts employers have become enthusiastic about the direction of the economy.

The Associated Industries of Massachusetts (AIM) Business Confidence Index surged 4.5 points in March to 60.9, its highest level since the pandemic and consequent business restrictions went into effect a year ago.

Confidence levels have increased 11.6 points since December as COVID-19 vaccines have raised hopes for an end to the crisis and the federal government provided a $1.9 trillion stimulus injection.

The March reading was 20.7 points higher than it was last year at this time, when the initial wave of the pandemic sent the Index reeling with its largest one-month decline on record.

Massachusetts employers created 14,000 jobs during February, and the unemployment rate dropped 0.7% to 7.1%. Nationally, the government reported Friday that U.S. employers added 916,000 jobs during March, nearly double February’s gain of 468,000.

“Employers certainly remain concerned about COVID-19 variants and rising case numbers, but they are clearly bullish about the underlying strength of the Massachusetts and national economies,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA). “Several companies told the March survey that commodity prices and domestic demand are both increasing, signaling tentative steps toward recovery.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were all higher for the third consecutive month in March. Every indicator is now well above 50 and resting comfortably in positive territory.

Employers’ confidence in their own companies rose 2.8 points to 61.8. It marked the sixth consecutive monthly increase for the Company Index.

The Massachusetts Index assessing business conditions within the Commonwealth rose 6.1 points to 60.6. The U.S. Index measuring conditions nationally surged 8.3 points to 58.7, almost 27 points higher than it was in March 2020.

The Current Index, which assesses overall business conditions at the time of the survey, was up 5.3 points to 57.1. The Future Index, measuring projections for the economy six months from now, reached its highest level since May 2018 at 64.8.

The Employment Index gained 1.2 points to 55.8, confirming the comments of many employers about the challenges of hiring and retaining skilled workers. The hiring issues come despite the fact that more than 300,000 Massachusetts residents remain without jobs more than a year into the public-health crisis.

Confidence among manufacturing companies climbed 3.3 points to 59.5 during March, leaving it 19.8 points better than its year-earlier level. Large companies (67.4) were more bullish than medium-sized companies (60.7) or small companies (54.6). Companies in Eastern Mass. (63.7) have a brighter outlook than those in Western Mass. (56.4).

Nada Sanders, distinguished professor of Supply Chain Management at Northeastern University and a BEA member, said the disruption last week at a company manufacturing the Johnson & Johnson vaccine, coupled with the resumption of lockdowns in key European countries, may moderate the optimism of employers.

“There are areas of the supply chain that were woefully unprepared for COVID-19. Retailers and suppliers, for example, built a supply-chain system that was too complex, in which the slightest crack down the line created a large ripple effect,” Sanders said. “Companies are now addressing those weaknesses, but the events of the past week, including the backup of the Suez Canal, may give employers pause.”

AIM President and CEO John Regan, also a BEA member, said the Massachusetts Legislature’s vote last week to freeze unemployment-insurance rates and create a tax benefit for small companies that received a forgivable loan through the federal Paycheck Protection Program represented significant commitments to the economic recovery of the Commonwealth.

“Add to that the fact that Senate President Karen Spilka told the AIM Executive Forum on Friday that she does not support tax increases this year, and House Speaker Ronald Mariano’s similar statements several weeks ago, and employers are encouraged that lawmakers will maintain a positive environment for business growth in 2021,” Regan said.

Daily News

BOSTON — The recovery of business confidence in Massachusetts picked up steam during February, driven by surging optimism among employers in their own company prospects and an increasingly bullish outlook among manufacturers.

The Associated Industries of Massachusetts (AIM) Business Confidence Index gained 4 points to 56.4 during a month marked by accelerating business reopenings and progress in the battle to moderate COVID-19.

The reading was 18 points higher than at the onset of the pandemic, but still 5.7 points shy of its level in February 2020. The Future Index portion of the BCI, which measures expectations for six months out, is now almost even with its reading of a year ago.

Massachusetts grew at a 7.9% annual rate in the fourth quarter, double the national pace. At the same time, the state unemployment stands at 7.4%, and hundreds of thousands of people remain out of work because of the public-health crisis.

“Business confidence has risen or remained steady in seven of the last nine months, giving Massachusetts the kind of measured optimism that will drive economic growth as the COVID-19 situation improves,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA).

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were all higher for the second consecutive month in February. Every indicator is now above 50 and in positive territory for the first time since the onset of the pandemic.

Employers’ confidence in their own companies rose 4.3 points to 59.0. It marked the fifth consecutive monthly increase for the Company Index.

The Massachusetts Index assessing business conditions within the Commonwealth climbed comfortably into optimistic territory, gaining 4.2 points to 54.3. The U.S. Index measuring conditions nationally rose 2.7 points to 50.4.

The Current Index, which assesses overall business conditions at the time of the survey, was up 3.4 points to 51.8. The Future Index increased 4.6 points to 61.0.

The Employment Index gained 3.0 points to 55.6, suggesting that cautious employers may be looking to expand payrolls as soon as pandemic-driven restrictions are eased. A growing number of employers are reporting challenges with hiring skilled workers despite the relatively high state unemployment rate.

Confidence among manufacturing companies climbed 5.1 points to 56.2 during February, leaving it 5.2 points below its year-earlier level.

Medium-sized companies (57.8) were more bullish than large companies (55.5) or small companies (55.0). Companies in Western Mass. (56.9) have a slightly brighter outlook than those in Eastern Mass. (55.9).

Elmore Alexander, retired dean of the Ricciardi College of Business at Bridgewater State University and a BEA member, said higher-than-expected tax revenues in Massachusetts and moderating COVID-19 case numbers support the strengthening of business confidence.

“Much of the economy appears poised for growth once the pandemic is under control,” he noted. “At the same time, there are major sectors such as travel, tourism, and hospitality that still face a steep climb after losing more than a third of their jobs in the past 12 months.”

AIM President and CEO John Regan, also a BEA member, noted that COVID-19 has had a devastating and potentially permanent impact on women in the workforce. The percentage of women participating in the U.S. labor market in October 2020 was the lowest since 1988, and of the 9.8 million jobs that have not yet returned, 55% belong to women.

“In one year, COVID-19 wiped out a generation of progress and put the precariousness of being a woman in the modern American workplace into stark perspective,” he said.

Associated Industries of Massachusetts is asking employers to alter their policies to help women and other caregivers remain on the job during the pandemic. Recommendations include providing pay increases and advancement steps to women caregivers on schedule rather than penalizing those who have been on leave or working limited hours, and extending the time workers can be on leave.

Daily News

BOSTON — Massachusetts employers began 2021 by turning optimistic for the first time since the COVID-19 pandemic shut down large swaths of the state and national economies last spring.

The Associated Industries of Massachusetts (AIM) Business Confidence Index climbed to 52.4 during January, surpassing the 50 mark that denotes an optimistic view of the economy. The reading was 14 points higher than its 2020 nadir in April, but still almost 10 points below where it was in January 2020.

The confidence report comes as Massachusetts continues a halting and uneven economic recovery. The good news is that the state grew at a 7.9% annual rate in the fourth quarter, double the national pace. The sobering news is that the Massachusetts unemployment rate surged to 7.4% during December.

“Massachusetts companies continue to be optimistic about their own prospects, especially at a time when COVID-19 vaccines have arrived and the state appears to be making modest progress moderating the spread of the virus,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA).

“We are really looking at two economies — one dominated by finance, manufacturing, and technology that continues to grow, and a second made up of travel, tourism and other public-facing industries that are likely to struggle for some time to come.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were all higher during January. Employers’ confidence in their own companies rose for a fourth consecutive month, increasing 1.6 points to 54.7. The Massachusetts Index assessing business conditions within the Commonwealth also crossed into optimistic territory, gaining 1.9 points to 50.3. The U.S. Index measuring conditions nationally surged 8.7 points to 47.7.

The Current Index, which assesses overall business conditions at the time of the survey, was up 3 points to 48.4. The Future Index, measuring expectations for six months out, rose 3.1 points to 56.4, still 6.4 points below its reading a year earlier.

The Employment Index gained 3.1 points to 52.6, suggesting that cautious employers may be looking to expand payrolls as soon as pandemic-driven restrictions are eased. Many employers that have operated throughout the COVID-19 crisis as essential business have reported challenges with hiring skilled workers.

Confidence among manufacturing companies was virtually flat at 51.1. The manufacturing index has dropped 11 points during the past 12 months.

Medium-sized companies (53.2) were more bullish than large companies (52.3) or small companies (51.2). Companies in Eastern Mass. (53.0) have a brighter outlook than those in Western Mass. (51.4).

Edward Pendergast, managing director of Dunn Rush & Co. and a BEA member, said the fact that the outlook for conditions six months from now is a full eight points higher than the assessment of current conditions sends a strong signal about the potential for economic recovery. “The hope is that employer confidence in their own company prospects continues to strengthen and drives decisions to increase investment moving forward.”

AIM President and CEO John Regan, also a BEA member, noted that the economy remains fragile as officials continue to wrestle with the public-health crisis.

“Hundreds of thousands of our friends and neighbors in Massachusetts remain out of work because of the pandemic. Many have left the workforce altogether. And the number of small businesses operating in Massachusetts during November was 37% less than in January 2020,” Regan said. “The watchword for policymakers in Massachusetts remains caution. The Baker administration and the Massachusetts Legislature have a unique opportunity to maintain the kind of business conditions that will encourage economic recovery and stability in 2021.”

Daily News

BOSTON — Confidence among Massachusetts businesses remained flat during the final month of 2020 as employers ended a tumultuous year with a cautious outlook.

The Associated Industries of Massachusetts (AIM) Business Confidence Index remained unchanged during December at 49.3. The reading was 12.9 points lower than in December 2019, but more than 10 points higher than its 2020 low point in April.

The result reflected solid gains in confidence among employers in the prospects for their own companies and in the Massachusetts economy. Those gains were offset by a dramatic 4.8-point drop in opinions about the national outlook.

The confidence report comes as the Massachusetts economy continues a methodical recovery amid the conflicting swirl of a COVID-19 vaccine rollout and a renewed surge of cases. The state jobless rate dropped 0.7 points to 6.7% during November as private-sector employers created 12,200 jobs. The Commonwealth lost 337,900 jobs between November 2019 and November 2020.

“Massachusetts companies are optimistic about their own prospects, which provides hope that the economy will rebound once the nation gains control of the pandemic,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors. “But we are, as always, left with the uncertainty of an economic situation that is being driven by a public-health crisis.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were mixed during December. Employers’ confidence in their own companies rose 1.3 points to 53.1, remaining in optimistic territory but still 7.9 points lower than a year ago. The Massachusetts Index assessing business conditions within the Commonwealth gained 1.1 points to 47.3, while the U.S. Index measuring conditions nationally fell to 39.0.

The Current Index, which assesses overall business conditions at the time of the survey, was down 0.2 point to 45.4. The Future Index, measuring expectations for six months out, rose 0.3 point to 53.3, still 8.3 points below its level of December 2019.

The Employment Index declined 1.6 points to 49.5, breaking a string of four consecutive monthly increases. Despite the COVID-driven economic downturn, many employers continue to report challenges with hiring skilled workers.

Confidence among manufacturing companies also weakened slightly, dropping 0.3 point to 51.0. The manufacturing index has dropped 10.4 points during the past 12 months.

Medium-sized companies (51.5) were more bullish than large companies (49.1) or small companies (47.2).

Alan Clayton-Matthews, professor in the School of Public Policy & Urban Affairs at Northeastern University and a BEA member, said unemployment in Massachusetts is projected to remain above pre-pandemic levels through 2022, with lower-wage workers in industries such as retail and hospitality bearing the brunt of the slowdown. Overall, however, he believes the economy will strengthen as long as COVID-19 vaccines become widely available by the summer.

“Massachusetts tax revenues in the current fiscal year could reach $30.2 billion, which would be significantly higher than what lawmakers are expecting. Revenues could climb 4.4% in fiscal 2022 to $31.5 billion,” said Clayton-Matthews, who is also a senior contributing editor at MassBenchmarks.

AIM President and CEO John Regan, also a BEA member, said prospects for economic growth in 2021 improved significantly last week when the Massachusetts Legislature completed a protracted two-year session without raising broad-based business taxes.

“We strongly urge the Legislature to continue that cautious approach as thousands of companies hang by a thread trying to survive the pandemic,” Regan said. “Employers commend the Legislature for passing a $626 million economic stimulus bill and a $16.5 billion transportation bond measure that did not raise corporate minimum taxes.”

Daily News

BOSTON — Confidence among Massachusetts businesses last month rose to its highest level since February, inching toward optimism as vaccines raised hopes for an end to the COVID-induced economic slowdown.

The Associated Industries of Massachusetts (AIM) Business Confidence Index gained 3.1 points to 49.3 during November, just shy of the level (50) that denotes an optimistic view of the business economy. Driving the increase was a surge of confidence among manufacturing companies and bullishness among all employers about prospects for the future.

The BCI is up from a low of 38.4 in April but still 11.3 points less than in November 2019.

The confidence report comes as the Massachusetts economy continues a methodical recovery amid the renewed surge of COVID-19 cases. The state jobless rate dropped 2.4 percentage points to 7.4% in October following a record 37.7% rebound in economic output during the third quarter.

“Massachusetts companies appear to believe that the new COVID-19 vaccines will ultimately stem the increase in new cases and restore stability to the economy,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors. “The fact that employers are significantly more confident about conditions six months from now than they are about current conditions is a strong indicator that they see better days ahead.”

The constituent indicators that make up the Business Confidence Index all moved higher during November. Employers’ confidence in their own companies rose 2.5 points to 51.8, crossing into optimistic territory but still 7.1 points lower than a year ago. The Massachusetts Index assessing business conditions within the Commonwealth gained 4.4 points to 47.3, while the U.S. Index measuring conditions nationally increased 3.6 points to 43.8.

The Current Index, which assesses overall business conditions at the time of the survey, was up 1.6 points to 45.6. The Future Index, measuring expectations for six months out, surged 4.6 points to 53.0, still 6.5 points below its level of November 2019.

The Employment Index continued its steady increase, rising 1.6 points to 51.1. Despite the COVID-driven economic downturn, many employers continue to report challenges with hiring skilled workers.

Manufacturing companies recorded the largest increase in confidence, up 5.8 points to 51.3. Many Massachusetts manufacturers have operated throughout the pandemic as essential businesses. Large companies (56.2) were more bullish than medium-sized companies (48.6) or small companies (45.3).

Sara Johnson, executive director, Global Economics at IHS Markit and vice chair of the BEA, sounded a note of caution about the ability of governments around the world to control the spread of COVID-19. She predicts that the U.S. economy will grow at 3.7% in the fourth quarter and then slow to average growth of 1.9% next year.

“The need to bolster struggling economies has swamped notions of austerity. Unfortunately, institutional and political constraints in Europe, the possibility of a divided government in the United States, and limitations on further budgetary expansion in the emerging world mean hopes for big fiscal stimulus remain uncertain,” Johnson said.

AIM President and CEO John Regan, also a BEA member, commended the Massachusetts Legislature for hammering out a state budget last week that avoids raising broad-based taxes on business. He also called upon state and local leaders to keep the economy open in light of the fact that the increase in new COVID-19 cases is not coming from workplaces.

“Addressing the COVID crisis by shutting down the economy again is not a solution,” he said. “Neither is imposing tax increases to resolve the state’s fiscal issues at the expense of business people trying to keep people employed.”

Daily News

BOSTON — Massachusetts employers remained pessimistic during October amid conflicting signals from the economy and the COVID-19 pandemic.

The Associated Industries of Massachusetts (AIM) Business Confidence Index lost four-tenths of a point to 46.2 last month, up from a low of 38.4 in April but still 14.7 points lower than a year ago. The report was compiled prior to the Nov. 3 presidential election.

Overall business confidence was dampened by darkening views of both the state and national economies. The confidence reading for the Massachusetts economy has tumbled 24.9 points during the past 12 months.

The report comes a week after MassBenchmarks reported that the Massachusetts economy grew at a record 37.7% clip during the third quarter, regaining some of the ground it lost when the Commonwealth imposed a broad lockdown during the early months of the pandemic. But the specter of lockdowns also reappeared in October as the U.S. hit a daily global record with 100,000 new COVID-19 cases.

“Massachusetts companies in many sectors have continued to generate products and services through the ups and downs of the pandemic. But they realize that surging caseloads and the expiration of federal stimulus will slow the economy again as we move into the fourth quarter,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA).

One participant in the confidence survey noted that “there is a big divide between growth industries and industries such as travel and tourism, which continue to suffer.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Index were mixed during October. Employer confidence in their own companies rose slightly to 49.3, nearly 10 points lower than in October 2019. The Massachusetts Index assessing business conditions within the Commonwealth lost 1.2 points to 42.9, while the U.S. Index measuring conditions nationally declined 2.4 points to 40.2.

The Current Index, which assesses overall business conditions at the time of the survey, was essentially flat at 44.0. The Future Index, measuring expectations for six months out, fell 1.8 points to 48.4.

The Employment Index increased 0.9 points to 49.5, just short of optimistic territory. Despite the COVID-driven economic downturn, many employers continue to report challenges with hiring skilled workers.

Small companies (46.6) were slightly more bullish than medium-sized companies (46.2) and large companies (45.8). Non-manufacturers (47.0) were more bullish than manufacturing companies (45.5).

Barry Bluestone, retired professor of Public Policy and Urban Affairs at Northeastern University, noted that the economy continues to be whipsawed by seemingly contradictory trends.

“More than 60,000 renter households in Massachusetts currently face the prospect of eviction, while, at the same time, the average price of a single-family home in Massachusetts surged 19.5% during September,” Bluestone said. “It mirrors what we see in the overall economy, where there is a clear disparity by industry in the consequences of the economic downturn.”

AIM President and CEO John Regan, also a BEA member, said the ability of Massachusetts to moderate the spread of COVID without repeating the devastating spring lockdown is essential to maintaining positive economic momentum.

“Hundreds of thousands of our friends and neighbors remain out of work, staring at bleak prospects during what is shaping up to be a long winter,” he noted, adding that the employers who make up AIM’s reopening task force, many of whom have operated as essential businesses throughout the pandemic, “continue to work closely with the Baker administration to ensure that the Commonwealth is able to balance public health and safety with economic survival.”

Daily News

BOSTON — Business confidence in Massachusetts was essentially flat during September as employers remained pessimistic about an economy that continues to struggle under the weight of the seven-month-old COVID-19 pandemic.

The Associated Industries of Massachusetts (AIM) Business Confidence Index rose three-tenths of a point to 46.6 last month, up from a low of 38.4 in April but still 12.3 points lower than a year ago. The reading remains below the 50-point level that signals optimism.

Opinions about the state of the national economy strengthened, while confidence in the Massachusetts economy declined. Employers feel more bullish about the future than about present conditions.

The stable confidence reading came during a month in which the Massachusetts unemployment rate fell from a highest-in-the-nation 16.2% to 11.3%. It was also a month that saw the number of newly reported COVID-19 cases in the Commonwealth begin to accelerate.

“Employer comments suggest a both uncertainty about the presidential election and frustration about the persistent disruption of the COVID pandemic,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA). “Confidence among employers varies widely, depending upon the degree to which the economic downturn is affecting particular industries.”

One participant in the confidence survey commented that “conditions are quite uneven — dire for many, marginally satisfactory for some, and extremely strong for a few.”

The constituent indicators that make up the Business Confidence Index were mixed during September. Employers’ confidence in their own companies fell slightly to 48.7, 9.5 points lower than in September 2019.

The Massachusetts Index assessing business conditions within the Commonwealth lost 2.0 points to 44.1, while the U.S. Index measuring conditions nationally rose 4.2 points to 42.6. The state confidence reading has dropped 4.7 points during the past two months and now sits 19.2 points below its reading of September 2019.

The gap between attitudes toward Massachusetts and the nation shrank from 12 points in July — the largest in a decade — to 1.5 points last month. Massachusetts lost 403,200 jobs between August 2019 and August 2020.

The Current Index, which assesses overall business conditions at the time of the survey, lost a point to 43.9. The Future Index, measuring expectations for six months out, rose 1.5 points to 49.2, just shy of optimistic territory. The Employment Index increased slightly — 0.7 points to 48.6 — while the Sales Index, a leading indicator, rose 0.2 points to 45.0.

Large companies (49.7) were more optimistic than small companies (47.4) or medium-sized companies (43.9). Non-manufacturers (48.8) were more bullish than manufacturing companies (46.8).

“The confidence index continues to show a clear disparity by industry and by company size in the consequences of the economic downturn,” said Paul Bolger, president of Massachusetts Capital Resource Co. “At the same time, it is a positive sign that the Future Index is higher than the Current Index. That means employers looking beyond the current uncertainty anticipate improvement six months down the road.”

AIM President and CEO John Regan, also a BEA member, said the continued economic uncertainty facing employers underscores the importance of decisions by the Massachusetts Legislature to maintain a competitive business climate. He cited a recent vote to table two bills that would have presumed that employees who contract COVID-19 did so while on the job and could thus seek workers’ compensation benefits.

“The decision by the Legislature was good news for employers already facing huge potential increases in unemployment-insurance taxes,” Regan said. “Expanded workers’ compensation eligibility is inconsistent with the public-health science because workers could just as well contract COVID-19 from family, friends, or a trip to the beach as from the workplace.”

Daily News

BOSTON — Confidence among Massachusetts employers rose slightly during August amid continued uncertainty around the COVID-19 pandemic and its long-term effect on the state and national economies.

The Associated Industries of Massachusetts (AIM) Business Confidence Index rose a half-point to 46.3, resuming an uneven climb from its 2020 low of 38.4 at the height of the pandemic in April.

The reading was 12.4 points lower than in August 2019 and continued to indicate a predominantly pessimistic outlook among businesses throughout the Commonwealth.

The Index has moved in a volatile pattern since suffering the largest one-time decline in its history during March. Employer sentiment has been constrained by a 16.1% Massachusetts unemployment rate that is the highest in the nation, along with persistent weakness in key economic sectors such as healthcare and education.

“The good news is that employers are showing increased confidence in the prospects of their own companies. The sobering news is that recent announcements of major layoffs by healthcare, higher-education, and hospitality organizations in Massachusetts leave little doubt about the challenges of getting the state economy back on track,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the AIM Board of Economic Advisors (BEA).

One employer who participated in the survey noted that “the pandemic has shortened the time horizon for evaluating business prospects. The environment changes so quickly that it’s hard to project conditions six months out.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were mostly higher during August. Employers’ confidence in their own companies rose 1.4 points to 49.0, one point shy of an optimistic reading but still 9.2 points lower than in August 2019.

The Massachusetts Index assessing business conditions within the Commonwealth lost 2.7 points to 46.1 as rising COVID-19 cases in early August prompted a pause in a planned four-phase economic reopening. The Massachusetts Index remains 17.8 points lower than a year ago.

The state’s payroll employment in July was 12.6% below its February 2020 level — the third-worst performance after Hawaii (down 16.5%) and New York (down 14.2%).

The U.S. Index measuring conditions nationally ended the month at 38.4, a 1.2-point gain for the month and a 16.8-point loss for the year. The gap between attitudes toward Massachusetts and the nation shrank from 12 points in July — the largest in a decade — to eight points last month.

The Current Index, which assesses overall business conditions at the time of the survey, rose 2.9 points to 44.9, while the Future Index, measuring expectations for six months out, dropped 1.9 points to 47.7. The Employment Index increased slightly, 0.2 points to 47.9, while the Sales Index, a leading indicator, rose 2.2 points to 44.8.

Large companies (47.8) were more optimistic than medium-sized companies (46.1) or small companies (45.0). Also driving confidence levels was the degree to which different industries have been able to reopen under the Massachusetts plan. Manufacturing companies (46.8), many of which have operated throughout the pandemic as essential businesses, remained more confident than non-manufacturers (45.9). And companies in manufacturing-heavy Western Mass. (48.9) were more upbeat than those in Eastern Mass. (44.2).

“There is a clear disparity by industry in the effects of the economic downturn,” said Michael Tyler, chief investment officer at Eastern Bank Wealth Management and a BEA member. “Recent layoff announcements by UMass Amherst, Cape Cod Healthcare, MGM, and several tourist destinations in the Berkshires draw a clear map of which types of organizations are being most immediately affected.”

AIM President and CEO John Regan, also a BEA member, said the end of August brought encouraging public-health news as the positive COVID-19 test rate in Massachusetts fell below 1%.

“We have said all along that resolving our economic issues and putting people back to work depends upon the ability of the medical community and the government to manage the public-health issue,” Regan said. “Several AIM-member pharmaceutical companies are among those engaged in an extraordinary race to develop COVID-19 treatments and vaccines. The clarity brought about by those advances will eventually be the medicine that also heals the state and national economies.”

Daily News

BOSTON — Confidence among Massachusetts employers weakened during July after two months of gains as the COVID-19 pandemic shrank the U.S. economy at a 33% annual clip during the second quarter.

The Associated Industries of Massachusetts (AIM) Business Confidence Index fell 3.2 points to 45.8, indicating a predominantly pessimistic outlook among businesses throughout the Commonwealth. Confidence was 16.2 points less than in July 2019.

The decrease, which came four months after the index suffered the largest one-time decline in its history, reflected concern among employers that surging COVID-19 cases in other parts of the country could eventually spell a prolonged and uneven national economic recovery.

Employers, in fact, showed significantly more confidence in the prospects of the Massachusetts economy than the national one, as the Massachusetts Index portion of the BCI rose 2 points in July while the National Index tumbled 6.5 points.

“Businesses continue to face uncertainty around both the public-health crisis and the economic crisis brought about by shutdowns and stay-at-home orders,” said Raymond Torto, professor at the Harvard Graduate School of Design and Chair of the Board of Economic Advisors (BEA). “The uncertainty will only intensify as cities and towns debate what to do about opening schools in September.”

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were mostly lower during July. Employers’ confidence in their own companies fell 4 points to 47.6 after moving into optimistic territory the previous month for the first time since the COVID-19 shutdown.

The gain in the Massachusetts Index assessing business conditions within the Commonwealth brought it to 48.8, 19.4 points lower than a year ago. The U.S. Index measuring conditions nationally ended the month at 37.2, losing 25.4 points during the past 12 months.

The Current Index, which assesses overall business conditions at the time of the survey, slid 4.3 points to 42.0. The Future Index, measuring expectations for six months out, dropped 2.2 points to 49.6. The Employment Index declined slightly — 0.5 points to 47.7 — while the Sales Index, a leading indicator, declined 9.1 points to 42.6 points.

Manufacturing companies (46.7) were more confident than non-manufacturers (44.8). Medium-sized companies (46.9) were more optimistic than small companies (45.9) or large companies (44.1). Companies in Western Mass. (46.3) were more upbeat than those in Eastern Mass. (45.3).

Katherine Kiel, professor of Economics at the College of the Holy Cross and a BEA member, said employers continue to face headwinds in a Massachusetts economy that declined at a staggering 43.8% annual rate during the second quarter.

“The pandemic affected Massachusetts and other northeastern states early and severely during the second quarter, so it’s not surprising that Massachusetts now has the highest unemployment rate in the nation at 17.4%,” Kiel said. “September will mark a critical juncture in the recovery as we see how many students return to college campuses and how schools handle the start of classes.”

AIM President and CEO John Regan, also a BEA member, said a key factor for Massachusetts employers moving forward will be the willingness of the federal government to provide financial support to the Commonwealth’s struggling unemployment-insurance system.

Projections from the most recent Unemployment Trust Fund Outlook Report estimate the fund will run a $6.6 billion deficit over the next several years. Employer contributions are due to increase from $1.6 billion this year to $2.2 billion in 2021.

“AIM strongly supports measures that will stabilize the unemployment-insurance system and moderate potential unemployment-tax increases for employers already struggling to keep their doors open,” Regan said.

Daily News

BOSTON — Business confidence continued to rebound during June as Massachusetts methodically reopened its economy and COVID-19 cases surged elsewhere in the country.

The Associated Industries of Massachusetts (AIM) Business Confidence Index rose 6.9 points to 49.0, just a point shy of the level that denotes an optimistic outlook among employers.

The increase, which came three months after the index suffered the largest one-time decline in its history, reflected the relatively smooth rollout of the state’s four-step reopening plan and progress in containing the COVID-19 pandemic.

Confidence was closely linked to where a company was on the reopening schedule. Manufacturing companies, many of which have operated throughout the pandemic as essential businesses or were among the first companies to reopen, were more confident than retail companies and restaurants that had to wait until late June to welcome back customers.

“Companies certainly want to reopen as soon as possible and hire back some of the 1 million Massachusetts residents who lost their jobs during the pandemic. At the same time, the flareup of COVID-19 cases in states that opened aggressively seems to underscore the value of moderation,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of AIM’s Board of Economic Advisors (BEA).

The constituent indicators that make up the Business Confidence Index were uniformly higher during June. Employers’ confidence in their own companies rose 5.9 points to 51.6, moving into optimistic territory for the first time since the COVID-19 shutdown.

The Massachusetts Index assessing business conditions within the Commonwealth increased 9.4 points to 46.8, leaving it 14.4 points lower than in June 2019. The U.S. Index measuring conditions nationally gained 7.7 points to 43.7, a drop of 14.3 points during the year.

The Current Index, which assesses overall business conditions at the time of the survey, surged 10.2 points to 46.3. The Future Index, measuring expectations for six months out, rose 3.6 points to 51.8. The Employment Index increased 1.8 points in May, while the Sales Index, a leading indicator, gained 11.4 points to 51.7.

Manufacturing companies (49.4) were slightly more confident than non-manufacturers (47.8). Small companies (50.1) were more optimistic than medium-sized companies (49.2) or large companies (46.3). Companies in Eastern Mass. (49.4) were more optimistic than those in Western Mass. (48.5).

Michael Goodman, professor of Public Policy at UMass Dartmouth and a BEA member, said the Massachusetts job picture brightened slightly during the past month as employers began to resume business operations, but that the state economy continues to face significant challenges and uncertainty.

“In addition to its massive disruption to our daily social and economic life, the pandemic presents a significant threat to what are typically two of the Commonwealth’s most stable counter-cyclical employers — healthcare and higher education,” Goodman said. “This will make it more difficult to recover quickly this time, even if we manage to avoid a projected second wave of the COVID-19 virus later this year.”

AIM President and CEO John Regan, also a BEA member, said employers hope Massachusetts can continue to reopen its economy without the surge in COVID-19 cases being seen in states like Texas and Florida.

“Essential companies and early-stage reopening companies continue to operate in a safe and efficient manner,” he noted. “The manufacturing sector in particular has adapted to new safety regulations in a way that should allow business to remain open and put people back to work.”

Daily News

BOSTON — The Associated Industries of Massachusetts (AIM) Business Confidence Index gained 3.7 points to 42.1 two months after suffering the largest one-time decline in its history. The increase left the Index 15 points lower than in May 2019 and well below the 50-point mark denoting an optimistic outlook on the economy.

The rise in confidence came as Massachusetts Gov. Charlie Baker announced a four-phase process for reopening the state economy under strict workplace-safety guidelines. Employers hope a timely return to business will allow them to rehire some of the 1.2 million Massachusetts residents who have filed for unemployment since the onset of the pandemic.

“Employers are encouraged that Massachusetts has been able to moderate the number of new COVID-19 cases. We have said all along that the current economic crisis is being driven by the public-health crisis, and that’s what we see here,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the Board of Economic Advisors (BEA).

The constituent indicators that make up the Business Confidence Index were uniformly higher during May. Employers’ confidence in their own companies rose 3.9 points to 45.7. The Massachusetts Index assessing business conditions within the Commonwealth increased 2.9 points to 37.4, leaving it 23.5 points lower than in May 2019. The U.S. Index measuring conditions nationally gained 3.9 points to 36.0, a drop of 19.0 points during the year.

The Current Index, which assesses overall business conditions at the time of the survey, was up 4.9 points to 36.1. The Future Index, measuring expectations for six months out, rose 2.6 points to 48.2. The Employment Index increased 3.5 points in May, while the Sales Index, a leading indicator, gained 2.1 points to 40.3.

Manufacturing companies (42.4) were slightly more confident than non-manufacturers (41.5). Medium-sized companies (44.0) were more optimistic than both large companies (40.4) and small companies (41.3). Companies in Eastern Mass. (44.3) were more optimistic than those in Western Mass. (38.6).

Elliot Winer, chief economist at Winer Economic Consulting and a BEA member, said any uptick in employer sentiment is important at a time when the COVID-19 virus caused the Massachusetts economy to contract at an estimated 6.1% annual rate during the first quarter.

“The fact that the Future Index is 12 points higher than the Current Index suggests that some employers believe they will be able to resume acceptable business volume as long as the virus remains under control,” Winer said.

AIM President and CEO John Regan, also a BEA member, said Baker’s deliberate reopening plan marks an encouraging first step to reopening the state economy in a safe and efficient manner.

“We realize that every employer in Massachusetts would love to hear that they can reopen immediately. But we also acknowledge that a phased reopening balances the need to restart the economy with the need to manage a public-health crisis that continues to claim many lives a day in Massachusetts,” Regan said. “Any decision by government to lift of the prohibition on non-essential businesses will be just the beginning for Massachusetts employers, who will in many cases need to reconfigure workplaces for social distancing and determine how to implement other safety measures, such as the wearing of protective equipment, continuing work-from-home policies, and ensuring the health of workers and customers.”

Daily News

BOSTON — Confidence among Massachusetts employers continued to erode during April as the Commonwealth became a hotspot for COVID-19 and Gov. Charlie Baker extended the closing of non-essential businesses until mid-May.

The Associated Industries of Massachusetts (AIM) Business Confidence Index fell 1.8 points after suffering its largest monthly decline ever during March. The Index ended April at 38.4, nearly 22 points less than a year ago and five points above its all-time low set during the Great Recession in 2009.

The sustained confidence slide reflects the idling of significant portions of the economy as health officials work to stem to spread of the novel coronavirus. The economic fallout has been widespread — more than 893,000 people have filed for unemployment benefits in Massachusetts during the past six weeks.

“Confidence remains at a pessimistic level even as portions of the nation begin to announce plans to gradually re-open their economies. But a meaningful rebound in confidence will depend on a still-uncertain balance of public-health factors and economic ones,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of the Board of Economic Advisors (BEA).

The AIM Index, based on a survey of more than 140 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 constituent indicators that make up the Business Confidence Index were mostly lower during April. The Massachusetts Index assessing business conditions within the Commonwealth fell 1.8 points to 34.5, leaving it 28.7 points lower than in April 2019. The U.S. Index measuring conditions nationally was essentially flat at 32.1, a drop of 26.2 points during the year.

The Current Index, which assesses overall business conditions at the time of the survey, lost 5.4 points to 31.2. The Future Index, measuring expectations for six months out, provided a lone bright spot as it rose 1.9 points to 45.6. The Employment Index was down 2.5 points in April and 11.5 points for the year. The Sales Index, a leading indicator, lost 5.3 points to 38.2.

Non-manufacturers (38.4) were slightly more confident than manufacturing companies (36.9). Medium-sized companies (39.4) were more optimistic than both large companies (34.4) or small companies (38.4). Companies in Western Mass.s (39.0) were more optimistic than those in the eastern part of the state (37.3).

Elmore Alexander, retired dean of the Ricciardi College of Business at Bridgewater State University, said the economic convulsion caused by COVID-19 has fallen heavily on healthcare, higher education, and other key drivers of growth in Massachusetts. “The COVID-19 outbreak has been particularly severe in Massachusetts as well, so the reopening of the economy may take longer than in other states and other countries. An important milestone will be whether college students return to campus in the fall.”

AIM President and CEO John Regan, also a BEA member, said the business community has begun to work with Baker’s 17-member advisory committee to develop strategies to re-open the Massachusetts economy.

“Any decision by government to lift of the prohibition on non-essential businesses will be just the beginning for Massachusetts employers, who will in many cases need to reconfigure workplaces for social distancing and determine how to implement other safety measures such as the wearing of protective equipment, continuing work-from-home policies and ensuring the health of workers and customers,” Regan said.

In the meantime, he noted, the business community is urging state lawmakers to proceed cautiously while employers and state officials gauge the effect of more than $2 trillion in federal rescue money for business and employees.

Daily News

BOSTON — The Associated Industries of Massachusetts (AIM) Business Confidence Index recorded the largest monthly drop in its history during March as the COVID-19 pandemic unraveled the global economy.

Confidence dropped 21.9 points to 40.2 on a 100-point scale, moving the reading into pessimistic territory (below 50.0) for the first time since October 2013. The largest monthly decline in confidence prior to last month took place in October 1998, when the Index dropped 9.6 points.

Business confidence in Massachusetts now stands 19.1 points below its level of March 2019 and just seven points higher than its nadir during the recession of 2009.

The confidence decline reflects the continued idling of vast swaths of the global economy as health officials work to stem to spread of the novel coronavirus. Members of the AIM Board of Economic Advisors (BEA) say the March results are not surprising at a time when experts believe the U.S. economy will contract by more than 5% in 2020.

“The unprecedented one-month erosion of business confidence represents the unique set of circumstances that have changed almost every aspect of life during the past month,” said Raymond Torto, professor at the Harvard Graduate School of Design and BEA chair. “Massachusetts companies are trying to map out their futures in the face of government orders to cease operations and the uncertainty of forces beyond the scope of traditional economic models.”

The constituent indicators that make up the Business Confidence Index were all down. The Massachusetts Index assessing business conditions within the Commonwealth fell 29.5 points to 36.3, leaving it 25.4 points lower than in February 2019. The U.S. Index lost 20 points to 31.9.

The Future Index, measuring expectations for six months out, declined 18.1 points to 43.7, a year-over-year slide of 24.6 points. The Current Index, which assesses overall business conditions at the time of the survey, lost 25.8 points to 36.6.

The Employment Index was down 12.2 points in March and 10.5 points for the year. The Employment Index had lagged the overall business-confidence reading for several years amid a persistent shortage of workers.

“The Baker administration deserves tremendous credit for managing through a pandemic crisis with no easy answers,” said John Regan, CEO of AIM. “State government has made good-faith and transparent efforts to limit the spread of COVID-19, secure appropriate equipment for frontline medical workers, and, with the help of federal programs and resources, establish financial backstops for companies and workers alike. It will be a great day when we can all get back to business as usual.”

COVID-19 Daily News

BOSTON — Associated Industries of Massachusetts (AIM) expressed support for Gov. Charlie Baker’s order closing non-essential workplaces, even while acknowledging the economic burden that the order is placing on the organization’s 3,500 members and their employees.

The order, which took effect on March 24, requires all businesses and organizations that do not provide ‘COVID-19 essential services’ to close their physical workplaces and facilities to workers, customers, and the public until Tuesday, April 7 at noon.

AIM praised Baker and his administration for a measured and transparent approach to containing COVID-19, which has affected 777 Massachusetts residents and taken the lives of nine people.

“Believe me, the last thing that a business association like AIM wants to see is an order requiring many good companies around the Commonwealth to close,” AIM President and CEO John Regan said. “But those of us with friends and colleagues who have been hit by this virus understand that social distancing represents our best chance to limit the pandemic and begin a movement back toward normalcy.”

AIM commended the work of hundreds of administration officials, including Lt. Gov. Karyn Polito, Secretary of Health and Human Services Marylou Sudders, Secretary of Housing and Economic Development Michael Kennealy, and Secretary of Labor and Workforce Development Rosalyn Acosta. AIM noted that the administration moved swiftly to get the U.S. Small Business Assoc. Economic Injury Disaster Loan program open in Massachusetts.

The administration has also established a Manufacturing Emergency Response Team to help companies retool their production operations to make much-needed medical equipment.

“We are grateful to the Baker administration for maintaining a free flow of information to employers and the public,” said Brooke Thomson, executive vice president of Government Affairs. “The Massachusetts business community understands that the COVID-19 pandemic is a unique situation that requires unfortunate but necessary steps to keep our employees and their families healthy. We look forward to emerging as an even stronger and more resilient economy once the crisis is over.”

Daily News

BOSTON — Business confidence remained steady in Massachusetts during February in a survey taken mostly prior to the late-month market gyrations touched off by COVID-19.

The Associated Industries of Massachusetts (AIM) Business Confidence Index fell 0.2 points last month to 62.1. The reading was 3.9 points higher than a year ago and well within optimistic territory.

February confidence reflected weakening employer views about conditions six months out and about prospects for their own companies. Those indicators are likely to fall again in March as companies factor in the potential effect of COVID-19 on profitability, employee productivity, and travel policies.

“The underlying indicators of the U.S. and Massachusetts economies remain strong, but fallout from COVID-19 introduces a huge amount of uncertainty into the economic picture,” said Raymond Torto, professor at the Harvard Graduate School of Design and chair of AIM’s Board of Economic Advisors (BEA).

The AIM Index, based on a survey of more than 100 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 constituent indicators that make up the Business Confidence Index were mixed during February. The Massachusetts Index assessing business conditions within the Commonwealth fell 0.4 points to 65.8, leaving it 5.0 points higher than in February 2019. The U.S. Index was virtually flat, rising 0.1 points to 60.9.

The Future Index, measuring expectations for six months out, declined 1.0 point to 61.8, a year-over-year gain of 3.0 points. The Current Index, which assesses overall business conditions at the time of the survey, gained 0.5 points to 62.4

The Employment Index was up 0.2 points in February and 2.9 points for the year. The Employment Index continues to lag the overall business-confidence reading amid a persistent shortage of workers that may become more pronounced as large numbers of Baby Boomers retire.

Non-manufacturers (62.8) were more confident than manufacturing companies (61.4). Large companies (66.3) were more optimistic than medium-sized (61.4) or small (56.3) companies. Companies in Eastern Mass. (63.4) were more optimistic than those in the west (59.9).

Edward Pendergast, managing director of Dunn Rush & Co. and a BEA member, noted that confidence among small businesses dropped from 63.0 in January to 56.3 in February, leaving the reading a full point lower than it was 12 months ago.

“Business formation and entrepreneurial activity remain strong in Massachusetts, yet owners of small companies are less optimistic about their prospects than they have been,” he said. “It will be an interesting measure to watch as the year progresses.”

AIM President and CEO John Regan, also a BEA member, said the Massachusetts economy has reached a turning point as lawmakers debate raising taxes to pay for transportation-infrastructure improvement.

The state House of Representatives last week passed a $600 million transportation-financing bill that would increase the gasoline tax and established a tiered minimum corporate tax.

“AIM believes that any transportation-financing source should have some nexus to transportation, and the change in corporate minimum tax lacks that nexus,” Regan said. “We support policies and responsible new investment to reduce congestion, grow capacity to deliver capital projects, lower carbon emissions in the transportation sector, and ensure accountability and transparency in transportation-investment spending.”

Opinion

Opinion

By Rick Lord

Associated Industries of Massachusetts (AIM) and its 4,000 member companies last week called upon the Legislature and Gov. Charlie Baker to end to the two-year assessment imposed on employers last year to close a financial gap at the state’s MassHealth insurance program for low-income residents.

AIM believes the assessment is no longer necessary because employers last year paid tens of millions of dollars more than anticipated under the levy. Businesses are on track to contribute some $519 million by the time the assessment sunsets at the end of this year instead of the $400 million envisioned under the 2017 legislation.

At the same time, enrollment in MassHealth has fallen as the Baker administration has initiated steps to ensure that only people eligible for benefits receive them. And state tax collections have exceeded targets over the past several months, putting the state on firmer financial footing.

“The conditions that led to the imposition of the surcharge no longer exist. Employers who have paid hundreds of millions of dollars in assessments believe it is fair to look at ending the surcharge in year two,” said John Regan, Executive Vice President of Government Affairs at AIM.

The Legislature passed the assessment in July 2017 minus a set of structural reforms proposed by Gov. Baker to place the MassHealth/Medicaid program on a firm financial footing. The assessment fell most heavily upon companies in which employees elect to use MassHealth rather than the employer-sponsored health plan.

An existing assessment called the employer medical assistance contribution increased from $51 to $77 per employee. Employers also were required to pay up to $750 for each worker who receives public health benefits.

Employers may request a waiver from the fees if they prove a hardship. Of 246 such waiver requests, administration officials said they have allowed 99.

Gov. Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80% of full-time worker equivalents did not take the company’s offer of health insurance, and that did not make a minimum contribution of a $4,950 annual contribution for each full-time worker. That proposal encountered significant opposition from the business community.

AIM member employers are proud to lead the nation in providing healthcare coverage to their employees. Sixty-five percent of Bay State companies offer health-insurance coverage to their workers, compared with 56% of employers nationwide. A full 100% of Massachusetts employers with 200 or more employees offer coverage. 

Employers stand ready to work with policymakers to make long-term structural reforms to both the MassHealth program and the commercial insurance markets to make the financing of healthcare for Massachusetts residents sustainable.

Rick Lord is president and CEO of Associated Industries of Massachusetts.

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