Central Mass. business confidence hits historic low
Photos | Courtesy of Rentschler Biopharma
The Central Massachusetts Business Confidence Index dropped to an historic low in August.
While business confidence in Massachusetts remained in optimistic territory in August, confidence among Central Massachusetts business owners remained pessimistic, as the index dropped to its lowest point since the economic indicator was launched nearly three years ago.
The Central Massachusetts Business Confidence Index fell 2.9 percentage points from 47.5 in July to 44.6 in August, according to a Wednesday press release from the Associated Industries of Massachusetts Business Confidence Index. August’s score reflects a 6.3-percentage-point over-the-year decrease from August 2023 when the index sat at 50.9.
The AIM index pulls from a survey of more than 140 Massachusetts employers and is scored from a 100-point scale; a score of above 50 represents an optimistic outlook and a score below 50 represents a pessimistic outlook.
The August score of 44.6 in Central Massachusetts is the lowest business confidence level since the index was launched in partnership with the Worcester Regional Chamber of Commerce in November 2021. The previous low was 45.7 in October 2023.
Central Massachusetts’ score was 6.4 percentage points below the statewide index of 51.0. Though still in optimistic territory, the state’s score represented a 1.0-percentage-point decrease from July and was 1.4 percentage points lower than in August 2023.
The Western Massachusetts Business Confidence Index fell from optimistic into neutral territory in August and represented the largest over-the-month decrease, falling 3.6 percentage points from 53.6 in July to 50.0. The North Shore was the sole region to gain confidence in the state, jumping 6.1 percentage points from 48.0 in July to 54.1 in August.
The state’s overall business confidence decline in August comes as inflation held steady at 2.5% in July, yet unemployment in the state rose to a year-long high of 4.6%.
“The good news is that 12-month inflation, measured by the personal consumption deflator, held steady in July and consumer spending was robust. At the same time, employers in Massachusetts and across the country have turned more cautious amid concerns about the slowing economy and federal tax, spending, and regulatory policies after the November elections,” Sara Johnson, chair of the AIM Board of Economic Advisors, said in the release.
Confidence among owners statewide in regards to their own businesses dropped 0.2 percentage points over-the-month to 52.7 in August, a score just 0.1 percentage points below that of August 2023.
The Massachusetts index evaluating business conditions in the state fell to 49.9 in August, a 1.7 percentage point decrease from July’s score of 51.6. Though trending downward, the commonwealth’s index was still 2.9 percentage points higher than the nation’s index of 47.0 in August.
Scoring 51.9, medium-sized companies were more optimistic statewide than both larger and smaller companies, which scored 51.6 and 49.4, respectively.
Though the manufacturing index was the lowest scoring constituent and remained in pessimistic territory, it rose 2.1 points in August to 48.2.
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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