Index: More confident Mass. employers see brighter future
Photo | Edd Cote
Downtown Worcester
With encouraging signs for COVID-19 vaccination on the horizon, Massachusetts employers were more confident about business conditions last month than they have been since the pandemic upended daily life and the economy in March.
The Associated Industries of Massachusetts index climbed 3.1 points to 49.3 for the month of November, just on the negative side of the 50-point mark that represents a neutral outlook on the economy. The index is presented on a 100-point scale.
The index took its largest monthly tumble on record -- a drop of 22 points from 62.1 to 40.2 -- in March as the pandemic took hold and then dropped to this year's low-point of 38.4 in April. The 49.3 reading for November represents the greatest degree of confidence since February. The lowest reading recorded by the index was 33.3 in February 2009.
"Massachusetts companies appear to believe that the new COVID-19 vaccines will ultimately stem the increase in new cases and restore stability to the economy," Raymond Torto, chair of the AIM Board of Economic Advisors, said. "The fact that employers are significantly more confident about conditions six months from now [53.0] than they are about current conditions [45.6] is a strong indicator that they see better days ahead."
Though businesses are feeling better about their futures, the group also warned that businesses still must contend with uncertainty around federal relief and the possibility of new or expanded COVID-19 restrictions imposed by Massachusetts.
One AIM advisor, Sara Johnson from IHS Markit, said a divided U.S. federal government and political conditions in Europe could put a drag on economic conditions. She sees the U.S. economy growing at 3.7 percent in the fourth quarter and then slowing to 1.9 percent growth next year. AIM President John Regan said Massachusetts lawmakers need to keep that in mind.
"Addressing the COVID crisis by shutting down the economy again is not a solution. Neither is imposing tax increases to resolve the state's fiscal issues at the expense of business people trying to keep people employed," he said.
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