Mass. businesses still confident, but less so
Photo | Grant Welker
The Buckley, a 210-unit apartment complex, is rising at a former retail plaza at Franklin Street and Mount Wayte Avenue in Framingham.
Every element of Massachusetts employer confidence is lower than it was a year ago after a tumultuous August of escalating trade tensions sank business sentiment, an Associated Industries of Massachusetts survey found.
After a nearly 4.5-point increase in July, AIM's Business Confidence Index fell 3.3 points to 58.7 in August amid ongoing uncertainty over the future of trade with China and worrisome signs from the U.S. economy, analysts said. The index is measured from zero to 100, with 50 being neutral.
"The imposition of 15 percent tariffs on $112 billion worth of Chinese goods on September 1 underscores the uncertainty facing employers, particularly manufacturers, who do business in overseas markets," Raymond Torto, chair of AIM's Board of Economic Advisors, said. "At the same time, employers are beginning to see evidence from both customers and suppliers of a slowdown in the US economy."
The Massachusetts Index, which assesses business conditions within the state, fell 4.3 points to 63.9 in August and is now 0.8 points below its reading a year ago. During that same time, the U.S. Index has shed 9.5 points.
AIM's Future Index, a measure of expectations for six months from now, dropped 3.9 points to 56.9 last month, leaving it 3.3 points lower than a year ago. Katherine Kiel, a professor of economics at the College of the Holy Cross, said business confidence is mirroring the same volatility seen in global financial markets this year.
"Economic growth in Massachusetts slowed from 2.7 percent during the first quarter to 1.4 percent in the second," she said. "Employers remain optimistic overall but see growing downside risks ranging from demographic constraints on the labor force to international uncertainty caused by factors such as tariffs and Brexit."
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