A monthly business confidence index that seeks to gauge the mood of Bay State employers posted a 48.9 reading in June, a drop of 3.2 points from its May reading as employers fretted about everything from China’s slowing economy to the political stalemate in Washington and the policies of the Federal Reserve.
The index, maintained by the Associated Industries of Massachusetts, uses a 100-point scale, with a reading below 50 indicating that local employers have a pessimistic outlook about the economy. AIM is a group that represents the state’s employers.
“This is the fourth consecutive summertime slump for the index, and the only good news is that last year’s June decline was much greater, 8.5 points,” Raymond G. Torto, chair of AIM’s Board of Economic Advisors, said in a statement. “The bad news, so to speak, is that this year it is more difficult to identify a single reason for the slump.”
While most economists agree that the economy is gaining strength, many employers are plagued by doubts, Torto suggested.
“The recent downward revision of growth estimates for the earlier part of 2013 align with our survey’s finding that many Massachusetts employers experienced a slowdown in the first half – 32 percent of respondents reported sales declines, compared to 29 percent with gains. Weak conditions in Europe and political deadlock in Washington continue to be concerns, and there has been disturbing news from China, a major engine of global growth. These, together with signals that the Federal Reserve may taper off its quantitative easing stimulus, cast a shadow over AIM’s members and their outlook.”
During its 22-year history, the index reached its historic high of 68.5 on two occasions in 1997 and 1998; its all-time low of 33.3 was posted in February 2009.