MA Employers Remain Pessimistic in Part Due To “Complex” National Economic Outlook
Massachusetts employers remained pessimistic in August despite a marginal improvement over the month prior, in part reflecting a “complex” economic outlook at the national level, according to the latest survey from the Associated Industries of Massachusetts.
AIM’s business confidence index increased from 48.6 in July to 49 in August, ending one point below the line that divides optimistic and pessimistic territories, the industry group announced Tuesday.
It’s the sixth straight month that the index has hovered below 50 points, though the score has largely rebounded from a recent nadir of 41.5 in April.
AIM described “mixed economic signals in both Massachusetts and the nation.” MassBenchmarks reported the state economy grew at a “solid” 2.6% annual rate in the second quarter, AIM noted, but the state’s 4.8% unemployment rate is more than half a percentage point higher than the national rate.
“The overall economic picture is complex, featuring a resilient stock market driven by AI optimism that contrasts with weaker consumer sentiment and a cautious Federal Reserve, which may cut interest rates soon,” AIM Board of Economic Advisors Chair Sara Johnson said. “That complexity continues to color business confidence in Massachusetts.”
Several member companies that participated in AIM’s latest monthly survey similarly warned of “uncertainty” impacting their outlooks.
AIM in its press release called uncertainty “the watchword.”
“Emerging technologies like AI are reshaping entire industries,” AIM President Brooke Thomson said. “Changes in federal policy and funding streams have hamstrung the research, medical and innovation industries that have long underpinned the state economy. Tariffs both imposed and threatened have changed the landscape of international trade, where Massachusetts companies sell $35 billion of goods and $42 billion in services each year to foreign markets. And central banks are walking a tightrope between fighting inflation and supporting growth.”
