Confidence among employers in Massachusetts dipped in June to its lowest level since August 2017.
That’s according to the monthly Business Confidence Index conducted by the Associated Industries of Massachusetts, which attributed the decrease to tariffs, rising raw material costs and the approval of paid family and medical leave in Massachusetts.
The BCI dropped 5.3 points in June to 61.3. The index, which is based on a survey of Massachusetts employers, is calculated on a 100-point scale. Anything above 50 is considered positive, while below 50 is negative.
“It is certainly significant that the AIM Business Confidence Index is lower than it was in June 2017. It is also significant that many of the individual indicators that make up the overall index – ranging from employer hiring plans to their views of the Massachusetts economy – are also lower than they were a year ago,” Raymond G. Torto, chairman of AIM’s Board of Economic Advisors, said in a statement. “It will be interesting to see how confidence changes during the summer as Massachusetts continues to operate at virtually full capacity.”
In the June survey, manufacturing companies (62.5 percent) were slightly more optimistic than non-manufacturers (60.2 percent). Companies in Eastern Massachusetts (63.3 percent) were more bullish than those in the west (58.7 percent).
“It’s interesting to note that medium and small companies remain significantly more optimistic than larger companies, reversing the typical pattern,” Edward H. Pendergast, managing director of Dunn Rush & Co., in a statement. “Entrepreneurial companies continue to drive growth here in Massachusetts.”
AIM President and CEO Richard C. Lord said employers are feeling threats from all directions.
“Member employers are deeply concerned about a potential trade war with China and with key U.S. trading partners such as Canada, Mexico and the European Union,” Lord said. “At the same time, the Legislature last week passed a ‘grand bargain’ that will create a family- and medical-leave requirement and increase the state minimum wage from $11 per hour to $15 per hour. Those requirements, on top of the MassHealth assessment and other elements, continue to challenge employers.”