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March 4, 2024

Worcester business confidence flips back to optimistic as statewide confidence hits 14-month high

Photo | TMS Aerial Solutions Downtown Worcester

Even with a slowing of the Massachusetts economy in the fourth quarter, business leaders in both Greater Worcester and the state-at-large are feeling increasingly confident in the current economic climate.

The Central Massachusetts Business Confidence Index rose from 49.1 to 52.4 in February as the Massachusetts Business Confidence Index rose from 53.5 to a 14-month high of 54.5, according to figures from the trade association Associated Industries of Massachusetts released Monday. 

These increases in confidence came despite the Massachusetts economy slowing from a 4.9% annual growth rate in the third quarter to 1.2% in the fourth quarter.

“It may seem counterintuitive that employer confidence has strengthened as the economy has slowed, but companies believe that the Federal Reserve has brought inflation under control without sending the nation into recession. The outlook is for slow growth during 2024; but the economy is stable, and that is a big plus for employers,” Sara Johnson, chair of the AIM Board of Economic Advisors, said in the press release.

Goods spending and wage and salary incomes have been weaker in Massachusetts compared to the national average, according to AIM.

Scored by AIM on a 100-point scale, a business confidence index above 50 represents an optimistic outlook, while a number below 50 represents a pessimistic outlook. The Western Massachusetts Business Confidence Index rose from 50.4 to 55.4, while the North Shore Confidence Index fell from 57.3 to 50.

Manufacturers are feeling better about the state of the economy; on a statewide level, AIM’s Manufacturing Index rose 4.4 points in February, ending the month at 50.8. 

Large Massachusetts companies are feeling more optimistic about the health of the state’s economy than smaller companies, as surveys of large firms resulted in an index of 58.5, compared to 52.1 for midsize businesses and 54.4 for small businesses. 

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