AIM business confidence hits 12-year high

Courtesy of Associated Industries of Massachusetts The AIM Business Confidence Index had its highest reading since December 2004 in January.

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By Emily Micucci

The Associated Industries of Massachusetts (AIM) on Tuesday reported confidence among Massachusetts employers was up for the fifth consecutive month in January, in spite of a slowdown in economic growth in the fourth quarter.

The AIM Business Confidence Index rose one point to 61.4 percent last month, 5.6 points higher than a year earlier and the highest reading since December 2004, according to a statement from AIM.

The confidence increase came during a month when the Massachusetts unemployment rate fell to 2.8 percent and Bay State employers created more than 72,000 new jobs for the year. Meanwhile, national economic growth slowed to an annual rate of 1.9 percent during the final three months of 2016, while the Massachusetts economy downshifted to a 0.5-percent growth rate, down from 3.1 percent during the third quarter.

“The good news is that unemployment in Massachusetts remains well below the national rate of 4.7 percent, but that low jobless rate may also be creating labor-force capacity constraints that are slowing output,” Raymond G. Torto, chair of AIM's Board of Economic Advisors, said in a statement. “Employer confidence seems to be tracking the overall optimism of financial markets that continue to hit record highs. It will be instructive to see how that enthusiasm holds up as Congress and the new administration get down to the business of governing.”