Biz confidence dims amidst market volatility, gov't shutdown
Confidence levels among Massachusetts employers hit a two-year low in December, driven by national factors like the federal government shutdown and the largest one-month stock market decline since the Great Depression.
Closer to home, employers have their eyes on the cost of health care and fees imposed by the state.
The Associated Industries of Massachusetts reported Monday that its business confidence index fell three points to 58.6 last month, its lowest level since December 2016. The decline was led by an 8.6-point drop in views of the national economy and a 4.7-point drop among manufacturing companies.
Though confidence readings have dropped five points during the past 12 months, they overall remain "within optimistic territory, but less comfortably so than earlier in 2018," AIM said.
"The Massachusetts economy remains strong, with a 3.3 percent growth rate and an unemployment rate of 3.4 percent, 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 Harvard Graduate School of Design lecturer Raymond Torto, who chairs AIM's Board of Economic Advisors.
AIM President and CEO Richard Lord said the cost of providing health insurance for workers remained the top concern for employers who participated in AIM's biennial issues survey in the fall.
The association and its member companies kicked off the new legislative session earlier this month by calling on Gov. Charlie Baker and state lawmakers to immediately end a two-year assessment on employers that was aimed at offsetting rising MassHealth costs.
A law Baker signed in August 2017 imposed a new payment for employers whose workers are enrolled in public health insurance and temporarily boosted another fee known as the Employer Medical Assistance Contribution, which is paid quarterly by employers with six or more workers.
"The assessment is no longer necessary because employers last year paid tens of millions of dollars more than anticipated under the levy," Lord said in a statement. "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."
Sixty-five percent of Massachusetts companies and all Massachusetts employers with 200 or more employees offer health insurance to their workers, according to AIM, which said 56 percent of employers nationwide offer coverage.
In his inaugural address this month, Baker said he plans "later this year" to file a bill addressing struggling community hospitals, telemedicine and scope of practice, mental health parity, and the high health care costs that are saddling small businesses. Major health care legislation cleared both branches last session but Democrats who control the Legislature were unable to agree on a final bill.
Baker said small businesses in the Bay State face some of the highest health insurance costs in the country.
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