August 5, 2014

Mass. business confidence surges

Employer confidence in the Massachusetts business climate surged last month, according to data released Tuesday by the Associated Industries of Massachusetts (AIM).

AIM's Business Confidence index leaped from 53.7 in June to 56.2 in July, with a 50 rating on the 100-point scale representing a neutral assessment. Business confidence was at 52.5 at this time last year.

"Business confidence in Massachusetts, after sliding into the neutral range for more than a year, has climbed back to within a point of its post-recession high of 57.1 in April 2012," said Raymond Torto, lecturer at the Harvard Graduate School of Design and chair of AIM's board of economic advisors. "This year, we have seen rising business confidence and, not coincidentally, more robust job creation."

Most of AIM's sub-indices climbed significantly in June, with the lone exception of confidence among non-manufacturing employers, which fell 0.8 points to 56. However, confidence among manufacturers climbed 5.1 points to 56.6, while the Massachusetts Index of business conditions jumped 4.9 points to 55.8.

AIM President and CEO Richard Lord said the improved performance in recent months stems from expectations that private-sector demand has finally turned a corner, leaving the economy less vulnerable to disruption from the federal government.

"Throughout this recession and recovery, as state government faced severe fiscal and social challenges, our administration and Legislature kept economic concerns in focus – which is an important reason that employment in Massachusetts is at an all-time high," Lord said.

Some 34 percent of employers reported adding jobs over the past six months, the survey found, while just 12 percent reported reducing the size of their workforces.

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