Local business confidence dropped during government shutdown, AIM says

Graphic courtesy of AIM.
Graphic courtesy of AIM.

The temporary shutdown of the federal government led to a drop in confidence among Massachusetts employers, the Associated Industriest of Massachusetts said Tuesday.

Since mid 1991, AIM has taken a monthly snapshot of business confidence among its members.

In October, AIM’s Massachusetts Business Confidence Index lost 4.8 points to post a reading of 46.7. The index uses a 100-point scale. A reading below 50 indicates a negative outlook among the state’s employers, a reading above 50 a positive outlook. The 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.

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In a statement, Raymond G. Torto, chair of AIM’s Board of Economic Advisors, commented on the index’s latest reading.

“The great majority of survey responses came in during the shutdown and as a debt ceiling crisis loomed,” Torto said. “While the threat of a shutdown had little apparent effect on the September results, the reality in October had a big impact. While only 13 percent had seen, or expected, direct impact on their operations, another 64 percent believed there were negative effects on overall business confidence and the  economy. On the other side of the ledger, 13 percent responded that they had not seen and did not expect negative effects, and 10 percent replied that ‘budget cuts and hard-line positions are ultimately positive.’  The employer community rejects the way business is being conducted in Washington and this was consistent across industries and the range of company sizes.”