The Associated Industries of Massachusetts (AIM) Business Confidence Index rebounded for the second straight month in August after a one-month plunge in June, coming in at 55.2 points.
In June, it fell 8.5 points to 48.3.
Raymond G. Torto, global chief economist at CB Richard Ellis Group Inc. and chair of AIM’s Board of Economic Advisors, noted that mid-year drops in 2010 and 2011 lasted longer than this year’s single-month drop and that the index is already nearly back to May’s level of 56.8.
“The index is up 6 points from last August, and 7.5 over two years,” he said. “For the AIM Index, as for the economy, progress since mid-2010 has been slow and bumpy, but the overall trend is upward.”
The AIM Index is calculated on a 100-point scale, with 50 as neutral, a reading above 50 being positive, and 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.
Along with the main index, all of AIM’s sub-indices rose in August.
The Current Index, assessing overall business conditions at the time of the survey, gained three points in August to 54.9. Meanwhile, the Future Index, measuring expectations for six months ahead, was also up 3 points, to 55.5.
Elliot Winer, chief economist, Northeast Economic Analysis Group LLC, said, “Massachusetts employers … are significantly less optimistic about the near future than they were a few months ago. The six-month horizon now reaches to the so-called ‘fiscal cliff’ when federal budget cuts and tax increases will take effect unless Congress acts to forestall them.”
The Employment Index gained 2.3 points to 56.2, as 40 percent reported hiring in the past six months while 14 percent reduced employment. Looking forward, 29 percent expect to add workers and 12 percent foresee reductions.
The Massachusetts Index continues to be higher than the national index of 44.0, as it has been for 54 or the past 55 months, according to AIM, which credited that partially with more favorable business policies passed during the last legislative session.
Image credit: FreeDigitalPhotos.net.
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