| By: Michael Norton, State House News Service
(Boston, MA) An index that measures business confidence among Massachusetts employers last month took its second biggest tumble in its 21-year history. The Associated Industries of Massachusetts Business Confidence Index fell 8.5 points in June to 48.3 - readings below 50 are considered in negative territory.
"We had noted intermittent signs of weakening confidence earlier in the spring, and there were sharp midyear declines in both 2010 (July-September) and 2011 (May-October)," Raymond Torto, global chief economist at CB Richard Ellis Group Inc. and chair of AIM's Board of Economic Advisors (BEA), said in a statement. "A drop was hardly unexpected, especially in view of a spate of negative economic reports during the month. It remains to be seen how long this slump will last, and whether the size of the June decline may have been exaggerated by the timing of the responses."
Torto added, "The economy is obviously in much better shape than it was three years ago, but it remains fragile, and employers are very aware of threats and uncertainties," Torto went on. "In June, they heard about financial storm clouds over Europe, a slowdown in China, and here in the U.S., disappointing reports on employment, industrial production, and retail sales. We're heading into elections - more uncertainty - and the fiscal cliff is getting closer every month. The road to recovery is a bumpy one."
AIM President Rick Lord said employers were managing costs in the face of global events they cannot control and added that employers expect "meaningful action" this month in the Legislature to rein in health care and electricity costs and to improve the teacher evaluation system and community college systems. He cautioned against election year passage of unspecified bills that he described as "fine-sounding but ill-considered."