Report: Mass. business confidence slides for 2nd straight month
The Associated Industries of Massachusetts (AIM) Business Confidence Index fell again in May, its second consecutive monthly decline after reaching a 10-year high in March.
The index for May registered a 57.3 on a 100-point scale. The March high was 60.2.
“We’re up 2.5 points from last May, but coming off an upward surge from August through March, business confidence seems to have lost momentum,” Raymond G. Torto, chairman of AIM's Board of Economic Advisors (BEA), said in a statement Tuesday. “The index performed well during the first quarter of this year, when the national economy barely grew, but now it is weakening even as growth appears to be picking up.”
Torto noted that economists’ forecasts for expansion in 2015 have moderated. “Our survey does reflect lower expectations for the six months ahead,” he said. The strong dollar is hurting confidence among mid-size manufacturers that export products, he added.
The index, issued monthly since 1991, reached a high of 68.5 in 1997 and 1998; its all-time low was 33.3 in February 2009.
Sub-indices based on selected questions or respondent characteristics almost all declined from April to May, though all were up from a year before. The index assessing national business conditions lost 3.7 points to 50.1, while the Massachusetts index of conditions was off 2.7 at 55.9.
“It is now six full years that the state indicator has led its national counterpart,” said BEA member Katherine A. Kiel, an economics professor at the College of the Holy Cross in Worcester. “Our state’s favorable industry mix and skilled workforce have enabled it to perform relatively well economically during a period of recovery and slow growth.”
AIM’s Employment Index rose from 57.3 in April to 58 in May, its highest reading since September 2005.
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