Businesses' confidence in Mass. slips
Business confidence among Massachusetts employers continued to slide in April, losing ground for the second month in a row.
The monthly business confidence index compiled by Associated Industries of Massachusetts recorded a decline of 0.8 points in April, to 53.9. In March, the index dropped sharply by 4.5 points to 54.7.
April's level is the lowest since last June, when the index stood at 53.2 points. March and April's numbers marked the lowest two-month period since September and October 2003, according to Associated Industries.
Readings above 50 generally indicate optimism among the survey respondents, while readings under 50 reflect a negative assessment of the state's business conditions.
A sub-index of employers' view of conditions in Massachusetts recorded its second straight month under 50, largely due to concerns about higher health insurance and energy costs, according to the association.
In April, the Massachusetts index actually picked up slightly, by 1.3 points to 47.9, after diving 9.8 points in February to 46.6.
"On the surface, conditions in Massachusetts are not so bad, as noted in the recent UMass Benchmarks study," noted Richard Lord, president and chief executive officer of Associated Industries of Massachusetts, in a prepared statement.
The University of Massachusetts-produced MassBenchmarks Current Economic Index, released Monday, shows the state's economy growing at a 4.7 percent annual rate, more than three times the national rate, in the first quarter.
"Job creation has picked up in recent months, although we are still less than halfway back to the employment level of the beginning of the decade," Lord added.
But Lord pointed to comments made anonymously by survey respondents: "Utility costs in Massachusetts are becoming an even bigger concern," according to a Springfield manufacturer, while a Western Massachusetts sawmill operator said "Massachusetts is NOT a place to have a business."
Another employer wrote on the survey that "fuel and insurance increases are killers!"
The overall index has declined five times in six months, indicating that employers have "serious concerns about the direction of the state's business climate and did not foresee improvement in the general business climate of the state or the nation in the six months ahead," according to a prepared statement from Raymond G. Torto, co-chairman of the association's board of economic advisors and principal of CBRE Torto Wheaton.
The U.S. sub-index of business conditions nationally dropped half a point in April to 53.5. The employment sub-index, which opens a window onto employers' hiring expectations, dropped 2.3 points to 51.8.
Confidence among manufacturers rose slightly, by 0.7 points, to 55.2, but among other employers it dropped 2.7 points to 52.2 for the fifth consecutive month.
May 02, 2007