Business confidence optimistic, AIM says
Though confidence among Massachusetts employers has fluctuated over the last year, it has remained within a comfortable range and nothing has significantly rocked the boat for businesses, analysts said.
The Associated Industries of Massachusetts said its monthly Business Confidence Index dropped 0.6 points to 62.6 in September, leaving it just two-tenths of a point above where it stood in September 2017. The index is presented on a 100-point scale, with 50 being neutral.
AIM said confidence among employers "has been moving for most of 2018 within a narrow range that is well within optimistic territory" and said the limited changes could be a sign that there are no significant political or economic threats to the now nine-year recovery.
"The underlying direction of the state and national economies remains positive. The Massachusetts economy grew at a staggering 7.3 percent annual rate during the second quarter and unemployment remains near historic lows at 3.6 percent," Raymond Torto, chair of AIM's Board of Economic Advisors, said.
He noted that the survey was taken before the announcement late Sunday that the United States had reached a new trade agreement with Canada and Mexico, "so it will be interesting to learn whether that deal affects employer attitudes moving forward."
AIM's Massachusetts Index, which measures confidence in the state economy, ended September at 64.5, having fallen 0.2 points for the month and 0.9 points over the year.
Michael Goodman, executive director of the Public Policy Center at the University of Massachusetts Dartmouth, said it appears the state's shortage of skilled workers and the tightening labor market it is driving "at long last appear to be exerting upward pressure on wages"
"Aggregate wage and salary income as measured by state withholding tax collections in Massachusetts grew at a 19.2 percent annualized rate in the second quarter, while nationally, U.S. workers saw their biggest pay increase in nearly a decade during the 12 months ending in June," Goodman said. "While the rising tide is not yet lifting boats in every corner of the Commonwealth, economic conditions in Massachusetts were undeniably very strong in the second quarter."
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