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January 8, 2024

Central Mass. business confidence rises to neutral territory as 2024 brings hopes of slowed inflation

Photo | Timothy Doyle Clinton's downtown

The Central Massachusetts Business Confidence Index rose slightly from 49.6 to 50 in December, indicating local companies have mixed views regarding prospective business conditions as they head into the new year.

A statewide outlook offers a slightly more optimistic viewpoint, as the Massachusetts Business Confidence Index gained 1.6 points in December, rising to 52.6 points, according to figures from the Associated Industries of Massachusetts released Monday. Scored on a 100-point scale, an index number above 50 represents an optimistic outlook, while a number below 50 represents a pessimistic outlook. 

“The good news is that the pace of inflation has slowed noticeably since mid-2022. This should give the Fed some confidence that tighter monetary policy is working without widespread job losses,” Sara Johnson, chair of the AIM Board of Economic Advisors, said in the release. 

The U.S. index finished 2023 at 49.9, which is 3.7 points higher than it was at the end of 2022, according to AIM.

Elsewhere in Massachusetts, other regional indexes are hovering near the line between optimistic and pessimistic; The North Shore Confidence Index ended the year at 52.1 points, while the Western Massachusetts Confidence Index sat at 48.9. 

The state needs to remember the issue of affordability when attempting to encourage economic growth, AIM President Brooke Thomson said in the release.

“Make no mistake, we must continue to prioritize the traditional pillars of economic development like advantageous tax rates, streamlined regulation, and efficient permitting. But economic development must also address the soaring cost of everything from housing to child care to health care, which is driving some of our best and brightest employees to less expensive regions of the country,” Thomson said.

Launched in 1991, AIM’s business confidence indexes are based on a survey of the organization’s members across the state. The Central Massachusetts Business Confidence Index is conducted in partnership with the Worcester Regional Chamber of Commerce. 

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