For the first time in 12 months, Massachusetts’ business confidence has bounced back into optimistic territory.
The state’s Business Confidence Index climbed 5.4 points to a score of 52 in February, a figure reflecting strong labor productivity and company earnings, according to a Monday press release from the trade group Associated Industries of Massachusetts, which compiles the index.
The AIM index is based on 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.
“Deployment of artificial intelligence – especially at large companies – is boosting productivity and helping Massachusetts employers cope with labor supply constraints. Meanwhile, sustained economic growth and federal tax policies are encouraging business investment,” Sara Johnson, chair of the AIM Board of Economic Advisors, which oversees the BCI, said in the release.
AIM’s February survey was conducted before the U.S. and Israel coordinated mass air strikes on Iran on Feb. 28.
“The reported uptick in confidence is welcome, but these results largely predate the military conflict in the Middle East. That matters. Continued conflict has direct implications for energy prices, inflation, and supply chains – all of which weigh heavily on business confidence,” Michael Goodman, professor of public policy at UMass Dartmouth, said in the release.
Massachusetts’ positive outlook may or may not continue, Goodman said.
The Company Index assessing employers’ confidence in their own operations rose in February, climbing 4.1 points to a score of 55.5.
The U.S. Index, which represents confidence in the country’s economy, leapt 7.8 points last month, the largest increase of the indexes compiled by AIM. That remained in pessimistic territory with a score of 47.9.
Confidence in the state’s economy grew by 6.3 points in February, but failed to enter optimistic territory with a score of 45.3.
Companies of all sizes landed in optimistic territory in February, with large companies at 54, medium companies at 51.7, and small companies at 50.3.
Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare, manufacturing, and higher education industries.
