Local employer confidence slipped in August, partly because of the prospect of more congressional deadlock and possible military action in the Middle East, said the Associated Industries of Massachusetts, or AIM, a group that represents the state’s employers.
Since 1991, AIM has maintained a monthly business confidence index. On its 100-point scale, 50 represents neutral, and a reading below 50 suggests pessimism among the employer community.
In Augusts, the AIM Business Confidence Index posted a reading of 48.7, down 3.8 points from the July reading and down 6.5 points from the August 2012 reading.
In a statement, Raymond G. Torto, chair of AIM’s Board of Economic Advisors, said: “The combination of mixed economic reports and recurrent policy uncertainties has meant a bumpy road for employer confidence. The recent uptick in interest rates, minor in itself, has slowed the housing recovery and contributed to concerns about the Federal Reserve’s options going forward. The trickiness of tapering off quantitative easing and unwinding accumulated positions is more evident. We also see renewed congressional deadlock with another debt ceiling crisis looming, and now the possibility of military intervention in the Middle East. These national and global uncertainties come at a time when the Massachusetts economy is lagging – growth and job creation are at a near standstill, and consumer confidence is down locally while strengthening nationally. Once again, the weight of multiple uncertainties is holding down robust confidence.”
The AIM’s Business Confidence Index reached its historic high of 68.5 on two occasions, once in 1997 and again in 1998. Its all-time low of 33.3 was posted in February 2009.
Chris Reidy can be reached at email@example.com.