AIM cites China in declining business confidence

Courtesy of the Associated Industries of Massachusetts The AIM Business Confidence Index trended upward earlier in 2015, but close two points below the 2014 reading in December.

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By Emily Micucci

In its monthly Business Confidence Index, the Associated Industries of Massachusetts (AIM) found that December shed 1.6 points to close out 2015 two points below the level at the end of 2014.

Last month, members of the business advocacy group rendered an index of 55.3 on a 100-point scale. A reading of 50 is considered neutral. A year earlier, the Index was 57.3.

On one hand, 2015 was a year of progress where business confidence is concerned, according to Raymond G. Torto, chair of AIM’s Board of Economic Advisors, as 2014 was the first year since 2004 that the reading was steadily above 55. But Torto said confidence tilted downward as the year went on.

“Following first-quarter gains, the Index saw declines in seven of the last nine months, and ended up in December at its lowest level of 2015. This pattern reflects increasing concern about a myriad of global economic issues including economic stability, especially around China, as well as the impact of weaker export markets combined with a strong dollar,” Torto said.

The downward trend was reflected in national business confidence as well, according to the U.S. Bureau of Economic Analysis. The U.S. index of national business condition rose to 55 in the early months of 2015 but slid back into the neutral range, landing at 50 by the end of the year, according to Fred Breimyer, regional economist at the FDIC.