Mass. business confidence grew in May, rebounding from record-low U.S. economic outlook
Photo | Courtesy of Rentschler Biopharma
The Massachusetts Business Confidence Index rose in May.
After three months of steady decline, business confidence in Massachusetts began to recuperate in May, yet stayed in pessimistic territory for the fourth consecutive month.
The Massachusetts Business Confidence Index rose 6.3 points last month to a score of 47.8, reflecting a figure 5.5 points lower than a year ago, according to a Monday press release from the trade group Associated Industries of Massachusetts, which compiles the index.
The AIM index pulls from a survey of more than 140 Massachusetts employers and is scored on a 100-point scale; a score of above 50 represents an optimistic outlook and a score below 50 represents a pessimistic outlook.
May’s rise in business confidence was in part due to a nationwide boost in economy and labor market outlook, with the country adding 139,000 new jobs over the course of the month, according to the release.
In fact, Massachusetts employers’ confidence in the U.S. economy rebounded from a 16-year low in April, rising 11.8 points to a score of 41.4 in May. While the index rose the most of the eight business confidence metrics analyzed by AIM, it remained in pessimistic territory and was the lowest-scoring of all the indexes.
Respondents continued to be focused on tariffs, immigration enforcement, federal grant freezing, and possible tax cuts imposed by the federal government, said the release.
“Uncertainty is the enemy of confidence,” Michael Goodman, professor of public policy at UMass Dartmouth and AIM Board of Economic Advisors member, said in the release. “Federal actions that threaten Medicaid funding, reduce support for R&D, and discourage immigration are weighing heavily on the commonwealth’s economic and fiscal outlook.”
The metric surveying participants’ confidence in their own business was the sole index to step into optimistic territory in May, rising 4.2 points to 50.8.
Also scoring 50.8, larger companies were once again more confident than medium-sized and small companies, which scored 49.1 and 42.4, respectively.
“Employers and consumers alike appear to have settled into a wait-and-see period as the administration conducts trade negotiations with individual nations,” Sara Johnson, chair of the BEA, which oversees the BCI, said in the release.
Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.
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