Business Confidence Shifts Into Slightly Optimistic Territory

Confidence among Massachusetts businesses tipped from ever so slightly pessimistic in September to ever so slightly optimistic in October.

The Associated Industries of Massachusetts Business Confidence Index increased from 49.8 to 51.2 month over month, prompting the prominent business group to describe employers as “just as ambivalent about the state of the economy as many experts.”

The index measures confidence on a 100-point scale, and a score of 50 marks the dividing line between an optimistic and a pessimistic outlook.

After peaking at 58.7 points in November 2022, the index has since fluctuated between scores of 54 and 49.6.

“Rapid increases in consumer and government spending continue to fuel the economy, suggesting the Federal Reserve may have to keep interest rates high for longer than it originally anticipated,” Sara Johnson, chair of the AIM Board of Economic Advisors, said. “A persistently tight labor market is exerting upward pressure on wages, leaving price inflation uncomfortably high.”

Employers that participated in the survey said although their outlook is generally positive, they have concerns such as the availability of credit and the statewide climate for business growth.

Beacon Hill enacted a roughly $1 billion package of tax relief this fall, and Gov. Maura Healey also proposed a $4.1 billion housing bond bill packed with policy reforms she says will generate more housing key to attracting and retaining talented employees.