Mass. business confidence has largest drop since first month of COVID pandemic
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Central Massachusetts business confidence fell nearly nearly 10 points in February.
The confidence Central Massachusetts business leaders have in the economy slumped into pessimistic territory in February as confidence throughout the state experienced the largest monthly decline since March 2020.
The Central Massachusetts Business Confidence Index sank nearly 10 points from 57.2 in January to 47.9 in February.
The stateside BCI dropped 5.2 points to 50.4 in February, the largest decrease in confidence since the onslaught of the COVID pandemic when Massachusetts’ score fell 21.9 points to 40.2 in March 2020.
Massachusetts’ sudden drop in confidence stems from uncertainty surrounding federal policy actions including new tariffs, heightened scrutiny of migrant workers, and potential cuts to National Institutes of Health research funding in the state, according to a Wednesday press release from the trade group Associated Industries of Massachusetts, which compiles the index. The NIH provided the state with $3.46 billion to 219 organizations in fiscal 2024.
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.
“A number of survey participants expressed concern about the prospect of tariffs imposed on goods from Canada, Mexico, and China, as well as the potential effect of retaliatory tariffs,” Sara Johnson, chair of the AIM Board of Economic Advisors, which oversees the BCI, said in the release. “Employers were less optimistic about prospects for their own companies, and they turned pessimistic about the business environment in Massachusetts and the rest of the country.”
Like Central Massachusetts, the Western Massachusetts Business Confidence Index fell into pessimistic territory last month, slipping 4.8 points to 48.4. The North Shore Confidence Index was the only region to stay in optimistic territory despite a 5.2-point decline in confidence, scoring 50.8 in February.
Confidence that Massachusetts business owners had in their own companies dipped in February, yet stayed in optimistic territory at 53.9. Still, February’s figure was 2.0 points lower than in February 2023.
Owners’ assessment of business conditions within Massachusetts tumbled into pessimistic territory last month, falling 6.6 points to 46.5. Employers reflected a similar sentiment for conditions within the country, with the US Index falling 8.8 points to 44.2.
Scoring 51.1, small businesses were more optimistic for the second month in a row than midsized and large companies, which scored 50.5 and 50.0, respectively.
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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