Central Mass. businesses pessimistic about future, as index hits new low

Photo | Timothy Doyle Worcester Regional Chamber of Commerce headquarters

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In October, Central Massachusetts businesses’ outlook on the economy reached its lowest point in the past 12 months, according to the monthly confidence index from the Worcester Regional Chamber of Commerce and the trade group Associated Industries of Massachusetts.

The Central Massachusetts Business Confidence Index, which is a monthly survey of how local businesses feel about the economy, fell below 50 in October to 47.8, indicating negative confidence, according to an AIM press release on Monday.

Much like the AIM’s statewide Business Confidence Index, which was 50.9 in October, the index is calculated on a 100-point scale with 50 being neutral and a score of over 50 being positive.

For the second time since the local Central Massachusetts version of the index was launched in November 2021, the local score fell into pessimistic territory. In June, the region scored 49. By August, it rose to 57.7 and then was 53.3 in September.

The organizations attribute the decline of the index to rising interest rates and a slowdown in job growth.

“Consumers continue to cautiously increase their spending, but we are starting to see higher interest rates adversely affect housing markets and related purchases such as furniture and appliances,” said Sara Johnson, chair of the AIM board of economic advisors. “Rising interest rates are also affecting the technology sector through constraints on the supply of venture capital and private investment funding,”

Despite the score, Timothy Murray, the Worcester chamber president and CEO, remains positive.

“Job growth remained remarkably resilient in October as U.S. employers added 261,000 jobs on a seasonally adjusted basis. And American workers are still seeing rapid wage gains - average hourly earnings climbed by 4.7% in the 12 months ended in October,” Murray said in the press release.