Confidence among the state’s employers has fallen to its lowest level in more than a year, a survey of Massachusetts businesses shows.
The Associated Industries of Massachusetts, in its monthly Business Confidence Index, said confidence among businesses fell 1.4 points from March to April, dropping from 51.5% to 50.1%, a level which the business association says is “essentially even” with the “the 50 mark that separates optimistic from pessimistic outlooks.”
“Businesses report that some customers are postponing buying decisions as they evaluate whether the economy is headed for a soft landing or a recession. At the same time, however, the report on Friday that US employers created 253,000 jobs in April shows that the employment market continues to defy the gravity of any slowdown,” Sara Johnson, the chair of AIM’s Board of Economic Advisors said with the release of the report.
That 50.1% confidence score is eight points lower than employers reported this time last year and 8.6 points lower than the sudden high seen in November of 2022, when confidence hit 58.7%.
According to those surveyed, the economy may be showing signs of a slowdown after 10 consecutive raises to the Federal Reserve’s key interest rate, but while the job market continues to show no signs of slowed wage growth employers are worried and starting to wonder if fed Chair Jerome Powell’s hoped for “soft landing” will ever come to be.
“Perhaps a soft landing, but I predict a big challenge will be here at the end of the summer or in the fall,” an employer said in the monthly survey.
Businesses are also wondering about the potential for a default on U.S. debt and the resulting havoc that could wreak on the world’s economy. The nation could run out of money to pay it’s bill by June, according to Treasury Secretary Janet Yellen, unless Congress manages to reach an agreement to raise the national borrowing limit or cut spending.
“Employers may disagree about federal spending, but no one disagrees that hitting the debt limit will cause significant economic damage. The members of AIM join others in calling upon elected officials to set aside their disagreements and find a solution,” AIM President and CEO John Regan said with the survey.
AIM surveys more than 140 Bay State businesses to produce their monthly index, which they have published for more than three decades. 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%.