August 7, 2018

Business confidence unchanged amid global trade concerns

Photo | Edd Cote
Lampin Corp. production worker Dakota Bloodworth pulls steel rods from the company's stock. The company sources most of its steel from Canada, which has a newly-imposed 25-percent tariff.

After taking a nosedive in June confidence among Massachusetts employers was almost unchanged in July, dropping by one-tenth of a percentage point amid continued concerns about American trade policy.

The Associated Industries of Massachusetts Business Confidence Index stood at 61.2 in July, down three-tenths of a percentage point from where it stood a year ago but "well within the optimistic range," analysts said. The index tumbled 5.3 points in June.

Employers "grew justifiably bullish about the state and national economies during July while expressing uncertainty about their own prospects," according to AIM, as trade tensions drive up prices, raise the threat of retaliatory tariffs and disrupt supply chains.

An employer in the construction industry who responded to an AIM survey wrote, "The tariffs are escalating building costs. We get several price increases per week. It's harder for most people to have the means to spend on up-keep, much less renovation or new construction."

AIM's index has been issued monthly since July 1991. It is presented on a 100-point scale, with 50 being neutral. The all-time high of 68.5 was recorded in both 1997 and 1998, the group said, and its low was 33.3 in February 2009. The index has remained above 50 since October 2013.

AIM's Massachusetts Index, which specifically measures business conditions within the commonwealth, rose 2.3 points in July to 65.1, leaving it 1.9 points ahead of July 2017.

Businesses in the eastern part of the state were more confident in business conditions than those in the western part of the state, AIM said, with confidence at 63.3 in the east and 57.6 in the west.


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