Federal Shutdown Drops Mass. Business Confidence

Confidence in the Massachusetts business climate plummeted last month with the partial federal government shutdown seen as the main culprit, according at the Associated Industries of Massachusetts.

AIM’s business confidence index fell from 51.5 points in September to 46.7 points in October, with a 50 rating on the 100-point scale representing a neutral assessment. Business confidence was at 51.1 percent at this time last year.

“These results are readily explained by the circumstances that prevailed at the time of the survey,” said Alan Clayton-Matthews, professor at the School of Public Policy and Urban Affairs at Northeastern University. “The extent of long-term damage to the economy and to business confidence remains to be seen.”

The shutdown, which lasted from Oct. 1 to Oct. 17, was on the forefront of business owners’ mind, with 64 percent citing a negative effect on overall business confidence and the economy.

Even with the reopening of the federal government, AIM president Richard Lord said Washington continues to fail to act in a matter that inspires confidence from business owners, pointing to bickering over implementation of the Affordable Care Act as the latest example.

“It’s not helpful to have one side denying the problems while the other gleefully exacerbates them, leaving the employer community – especially Massachusetts employers – pinned down between the battle lines.”

Some 28 percent of employers reported a decline in the size of their workforces over the past six months, the survey found, while just 19 percent reported adding positions.

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