Massachusetts’ business confidence was once again on the decline in September as the state’s Business Confidence Index has experienced oscillating scores this past year, changing directions on almost a monthly basis.
September’s score fell 1.5 percentage points from August to 47.5, marking Massachusetts’ seventh consecutive month in pessimistic territory. September’s index was 5.7 percentage points lower than in September 2024, 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.
“Employers are navigating the crosscurrents of an economy that has seen robust
growth recently but is vulnerable to sharp increases in tariffs, persistent inflation, and
excessive federal budget deficits. Real GDP grew at an annualized 3.8-percent pace in
the second quarter, but momentum is cooling,” Sara Johnson, chair of the AIM
Board of Economic Advisors, which oversees the BCI, said in the release.
AIM collected responses to its monthly business confidence survey on Sept. 17, after the Federal Reserve cut interest rates but before Wednesday’s government shutdown, according to the release.
The U.S. Index, representing business confidence Massachusetts employers have in the nation’s economy, was the lowest scoring indicator of the eight indexes analyzed by AIM.
The index fell 5.1 percentage points over the month to a score of 39.5.
On the other hand, the state’s Employment Index, which measures employers’ confidence in employment conditions, grew 3.1 percentage points over the month to a score of 52.6, making it September’s highest-scoring indicator.
Confidence business owners had in their own companies was the only other measure to increase in September, with the state’s Company Index rising 0.2 percentage points to 51.8.
“Essentially every U.S. data release in late September came in stronger than anticipated. A big surge in new home sales in August, an upward revision to the final read on Q2 GDP, a beat on consumer spending and a decline in unemployment claims, all equated to an overall message of macro resilience,” Simona Mocuta, chief economist at Boston-based State Street Investment Management and a BEA member, said in the release.
The confidence of all sizes of companies remained in pessimistic territory last month, with medium-sized companies scoring 49.0, large companies scoring 48.9, and small companies scoring 45.3.
“Employers are concerned about international trade, the emergence of artificial intelligence and the cost of doing business in Massachusetts, but, at the same time, the Fed just lowered interest rates, unemployment has been steady, and the financial markets have surged,” Brooke Thomson, AIM president and CEO, 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.
