Amid ongoing conflict in the Middle East, Massachusetts’ business confidence returned to pessimistic territory in March.
The state’s Business Confidence Index dropped five points to a score of 47 last month, according to a Monday announcement from the trade group Associated Industries of Massachusetts, which compiles the index.
This dip in confidence comes one month after the Bay State’s BCI rose into optimistic territory in February for the first time in 12 months, reaching a score of 52. The AIM index is based on a survey of more than 140 Massachusetts employers and is scored on a 100-point scale; a score above 50 represents an optimistic outlook, and a score below 50 represents a pessimistic outlook.
“The economy has remained resilient so far, but rising geopolitical tensions, volatile trade policy, a slowing labor market, and the risk of tariff and energy price pass-through to inflation are giving them pause,” Olena Staveley-O’Carroll, professor at the College of the Holy Cross in Worcester, said in the announcement.
At the same time, the nation’s economy is growing, with companies reporting increased labor productivity and company earnings, said Sara Johnson, chair of the AIM Board of Economic Advisors, which oversees the BCI.
AIM’s Company Index, an indicator analyzing confidence employers have in their own businesses, dropped 2.9 points between February and March. The index was the only one to remain in optimistic territory with a score of 52.6.
The Massachusetts Index, which analyzes employers’ confidence in the state’s economy, was the lowest index of the eight compiled by AIM. The index fell 6.8 points to a score of 38.5 in March.
That figure was closely followed by the U.S. Index, with employers’ confidence in the nation’s economy dropping 9.2 points in March to 38.7.
While still in pessimistic territory, medium-sized companies were slightly more optimistic than large companies, with medium-sized companies scoring a 49.8 and large companies scoring 48.9. Small companies were the least optimistic of the three, scoring 44.2 in March.
Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare, manufacturing, and higher education industries.
