Uncertainty weakens business confidence

BCI.June.2016By Christopher Geehern | aim blog

A month of economic uncertainty punctuated by weak US job growth and the United Kingdom’s impending exit from the European Union drove Massachusetts employer confidence lower during June.

The Associated Industries of Massachusetts Business Confidence Index (BCI) fell 1.6 points to 56.1 as employers took an increasingly bearish view of the US economy. At the same time, the confidence reading remained comfortably above the 50 mark that denotes an overall positive economic outlook. Taken quarterly, confidence rose from 55.8 during the first three months of the year to 56.7 during April, May and June.

The June survey of employers overlapped by a few days the landmark vote in Great Britain the leave the European Union, an outcome that caused financial gyrations and concern about US exports in the face of a rising dollar. The confidence readings also came in the wake of the slowest pace of job creation in the US since 2010.

“Massachusetts employers are trying to balance a range of economic and political distractions that pull them in different directions month to month,” said Raymond G. Torto, Chair of AIM’s Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“The good news is that employers remain highly confident in the Massachusetts economy and in the prospects for their own companies.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The index has remained above 50 since October 2013.

 

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