Central Mass. business confidence fell in January as owners raise concerns over tariffs
Photos | Courtesy of Rentschler Biopharma
The Central Massachusetts Business Confidence Index dropped in January.
Central Massachusetts began 2025 with a dip in business confidence, yet stayed in optimistic territory for January.
The Central Massachusetts Business Confidence Index sank from 57.9 to 57.2 last month, peddling back on its surge in December when confidence rose 5.2 points from November. Though trending downward, the region’s BCI was still 8.1 points higher than in January 2024 when business confidence was in pessimistic territory at 49.
In contrast, the state’s overall BCI was back on the rise in January, inching upward by 0.2 points from 55.4 in December to 55.6, according to a Monday press release from the trade group Associated Industries of Massachusetts, which compiles the index. Last month’s score reflected a 2.1-point increase from January 2024 when the state’s BCI was 53.5.
The AIM index pulls from a survey of more than 140 Massachusetts employers and is scored on a 100-point scale; a score of above 50 represents an optimistic outlook and a score below 50 represents a pessimistic outlook.
The Western Massachusetts Business Confidence Index was the only regional index to grow in January, rising 2.6 points from 53.2 in December to 55.8. The North Shore Confidence Index fell three points last month to 56.0.
Confidence all Massachusetts business owners had in their own companies was back on the rise last month, gaining 1.9 points in January to 57.3, marking a 2.8-point increase from January 2024.
Reversing a two-month trend with a score of 57.6, small companies were more optimistic than large and midsized companies, which scored 56.5 and 51.8, respectively.
AIM noted January’s survey came as the Federal Reserve Board kept its federal funds rate unchanged without decreasing borrowing costs for individuals and businesses.
“The economic expansion is continuing at subdued pace, with the U.S. economy growing at an annual rate of 2.3 percent in the fourth quarter of 2024. Employment growth also slowed to 143,000 jobs in January, even as the national unemployment rate fell to 4.0,” Sara Johnson, chair of the AIM Board of Economic Advisors, which oversees the BCI, said in the release.
The trade group reported survey participants voiced unease regarding looming tariffs even though the survey was conducted prior to the Trump Administration proposing and then delaying 25% tariffs on imports from Canada and Mexico.
“Businesses lose twice with tariffs – first the cost of inputs from the three largest U.S. trading partners goes up and then the retaliatory tariffs make their products more expensive in these important foreign markets,” Olena Staveley-O'Carroll, associate professor of economics at College of the Holy Cross in Worcester and a BEA member, said in the release.
Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.
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