🔒Mass. business confidence rounded out 2025 with a pessimistic outlook

Massachusetts’ business confidence ended 2025 with the fourth-lowest score of the year, rounding out 10 consecutive months of pessimistic scores. The Massachusetts Business Confidence Index dipped 1.7 points in December to a tally of 46.8, with BCI survey takers reporting operational cost concerns and decreased confidence in both the Massachusetts’ and nation’s economies, according to a Monday press release from the trade group Associated Industries of Massachusetts, which compiles the index. Still, the economy is gradually expanding, Sara Johnson, chair of the AIM Board of Economic Advisors, which oversees the BCI, said in the release. “Consumer spending has remained relatively resilient, supported by steady job growth, rising real wages in some sectors, and strong balance sheets among higher-income households. Corporate investment, particularly in technology and artificial intelligence, continues to provide pockets of momentum. These factors suggest an economy that is slowing but still expanding, avoiding the downturn many feared earlier,” Johnson said in the release. December’s rate was 8.6 points lower than in December 2024. The state’s index has failed to land in optimistic territory since February, when its BCI sat at 50.4. 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 state’s Company Index, which analyzes business confidence owners have in their own businesses, was the sole index in optimistic territory in December out of the 11 indexes compiled by AIM. Sitting at 51.4, Massachusetts’ Company Index still experienced an over-the-month decrease, falling 0.3 points from November and 4.0 points from December 2024. The Massachusetts Index analyzing business conditions within the state decreased 5.6 points over the month to 39.6, making it the lowest-scoring index in December. Last month’s Massachusetts Index represented a 15.4-point drop from December 2024, a 33% decrease. “One concern is that spending is uneven, with many companies reporting a pullback by lower- and middle-income consumers. Another concern is inflation. The core personal consumption expenditure price index (less food and energy) rose 2.9% in the third quarter, versus 2.6% in the second,” Elmore Alexander, BEA member and Bridgewater State University dean emeritus, said in the release. Rating 48.6, large companies were once again the most confident, followed by medium-sized companies at 46.8 and small companies at 44.4. The Manufacturing Index stood alone as the only indicator to rise last month, growing 5.4 points, yet remaining in pessimistic territory at a score of 46.7. Massachusetts will continue to grapple with a number of challenging fiscal obstacles in 2026, AIM President and CEO Brooke Thomson said in the release. “Add in the possibility that voters may face as many as 11 statewide ballot questions in the fall, and there are many potential issues that are likely to affect business confidence this year,” Thomson said. Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare, manufacturing, and higher education industries.