After turning pessimistic for the first time in years in May, confidence among the state’s employers stayed mostly flat in June, reflecting continued concern over inflation and ongoing struggles finding people to fill empty jobs.
According to the monthly Business Confidence Index published by the Associated Industries of Massachusetts, business owners’ confidence rose just one-tenth of a point, from 49.6% to 49.7%.
“Business confidence remained flat during June amid a resilient economy, stubborn inflation, a pause by the Federal Reserve and a shortage of workers across almost every industry,” the association said with the release of their index.
In May, employers reported their faith in the economy had slipped to its lowest level since the height of the COVID-19 pandemic. This month’s essentially flat survey indicates that while the economy continues to stave off a recession, employers are worried a recent pause in interest rate hikes by the Federal Reserve will soon end and yet higher borrowing costs are on the horizon.
Business owners told AIM their chief concern remains putting the right skills into the right seats. Small companies, the report indicated, were slightly optimistic about the future, while medium and large businesses were significantly more pessimistic.
“As 2023 reached its midpoint, we experienced a tech-fueled stock market rally instead of the recession many economists believe is inevitable. Employers tell us that even though they worry about rising prices, they also remain desperate to find workers in a tight labor market,” said Sara Johnson, chair of AIM’s Board of Economic Advisors, in a statement with the index’s release.
Gov. Maura Healey and the Legislature’s moves to lower taxes for some low income residents and to ease the capital gains tax will help, if they can pass, AIM CEO John Regan said.
“The governor and the House are wisely seeking tax changes that will improve our economic climate that has seen tens of thousands of Massachusetts residents leave the state in recent years. We look forward to the final version of tax relief from the conference committee,” Regan said.
AIM surveys more than 140 Bay State businesses to produce their monthly index, the first of which was published in July of 1991. According to AIM, business confidence hit historic highs in 1997 and 1998, with two months in either year showing 68.5% confidence, and hit a low in February of 2009, when it was 33.3%.