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Employers Expect Happy New Year

Posted by Andre Mayer on Dec 2, 2014 9:19:20 AM

Improving economic fundamentals and the prospect of successful divided government in Massachusetts have left Bay State employers feeling merry about 2015.

BCI.November.2014The Associated Industries of Massachusetts Business Confidence Index rose 1.9 points in November to 56.8, leaving it with a gain of 6.6 for the year. More important, however, was the fact the employer sentiment about the next six months soared 4.3 points to 58.5, while confidence among executives in the condition of their own companies rose 2.8 points to 59.7.

“Survey respondents look forward to better conditions by next spring, in line with most economic forecasts,” said Fred Breimyer, regional economist at the FDIC.

“It is surprising that problems in the global economy – recession or near-recession in Europe and Japan, and slowing growth in China – are not enough to put a damper on these expectations.”

Elliot Winer, Chief Economist, Northeast Economic Analysis Group LLC, said gains in the Employment Index and Sales Index for November point to sustained job growth next year.

“Respondents reporting staff additions over past six months outnumber those recording cuts by almost two-to-one (31 percent-17 percent), and the expected ratio in the coming six months is better than three-to-one (32 percent-10 percent),” Winer said.

The November BCI ended just shy of the Index’s post-recession high of 57.1 reached in April 2012.

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a 100-point scale on which 50 is neutral, the Index attained a historical high of 68.5 in 1997 and 1998; its all-time low was 33.3 in February 2009. 

Employers continue to be more optimistic about the Massachusetts economy than the national - the U.S. Index of business conditions nationally was off nine-tenths at 49.7, while the Massachusetts Index of conditions within the commonwealth gained 1.8 points to 55.1. Analysts say that gap reflects the view of employers that Governor-Elect Charlie Baker and Democratic legislative leaders will work across party lines far more smoothly that the two parties in Washington.

“There is little indication of concern about having a governor of one party and a legislature controlled by the other,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“On a special survey question, 54 percent of respondents replied that they expect divided government to work better on Beacon Hill than in Washington, and another 28 percent thought it could be productive at both levels.”

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Employer Confidence Rises As Companies Brighten View of National Economy

Posted by Andre Mayer on Nov 3, 2014 9:00:14 AM

The Associated Industries of Massachusetts Business Confidence Index posted its sixth increase in eight months during October as a brightening view of the national economy helped the index add half a point to 54.9.

BCI.October.2014“The Index is up 8.2 points from last October, which was the month of the federal government shutdown,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“In that context, it is encouraging to see our U.S. Index of national conditions back above 50, up from below 40, and predominantly positive assessments of the business climate from all categories of Massachusetts employers.”   

Torto noted, however, that employers foresee a slight weakening of conditions in the six months ahead.

“There may be some uneasiness about the upcoming elections and the long-expected end of quantitative easing by the Federal Reserve,” he said, “along with concern about the state of the global economy, characterized by fitful growth in the U.S., slowing expansion in China, and Europe on the edge of recession. These generally fall under the heading of uncertainties rather than threats, although Europe’s condition is especially important to Massachusetts because of extensive ties of trade and direct investment.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral. A reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The Massachusetts Index, assessing business conditions within the commonwealth, added 2.6 points on the month to 53.3, and the U.S. Index of national business conditions was up 3.6 to 50.6.

“The U.S. Index reached 50 for only the second time since 2007,” remarked BEA member Michael A. Tyler, CFA, Chief Investment Officer, Eastern Bank Wealth Management, adding that “larger companies were more likely to rate business conditions in Massachusetts better than those prevailing nationally.” Compared to last October, the state indicator was up 8.8 points while its national counterpart gained 12.8 points.

The Current Index, which assesses overall business conditions at the time of the survey, was up 1.8 points at 55.7, while the Future Index, measuring expectations for six months out, shed seven-tenths to 54.2. The annual gains were 9.5 and 6.4 respectively.

“These results indicate a moderate level of satisfaction – short of outright enthusiasm – about current conditions, coupled with a degree of caution about the future course of the economy,” Tyler noted. “Business sentiment has found a firm footing since the series of fiscal crises that peaked a year ago.”  

All three of the sub-indices bearing on survey respondents’ own operations shaded off in October. The Company Index, reflecting overall business conditions, was off 1.1 points to 56.9, the Sales Index lost 1.7 to 57.6, and the Employment Index shed seven-tenths to 54.4.

“Declines in these company-specific indicators may be seen as signs of rising uncertainty,” said Sara L. Johnson, Senior Research Director of Global Economics at IHS Global Insight, a BEA member. “While companies of all sizes were generally positive, large employers were much more confident than small ones about their own situations.”

Confidence was slightly higher in the manufacturing sector (55.2, +4.1) than among other employers (54.7, -3.7), and higher outside Greater Boston (58.2, +5.4) than outside the metropolitan area (53.5, -1.8).

“Manufacturers were more positive about national conditions, and about their own companies’ positions, than other respondents,” Johnson noted.

“Caution about the immediate future was evident in hiring expectations,” she said; only 16% of employers foresaw additional staffing in the coming six months, compared to 33% who added personnel in the prior six months. Staff reductions were at 13% for both periods.  

BCI.October.2014

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Employers: I'm OK, You're Not OK

Posted by Andre Mayer on Oct 7, 2014 9:35:58 AM

I’m OK you’re not OK.

BCI.September.2014That seems to be the mindset of Massachusetts employers who remain confident about the prospects of their own companies, but far less so about the political leadership guiding the Massachusetts and national economies.

The Associated Industries of Massachusetts Business Confidence Index released this morning shows that employer sentiment steadied at 54.4 in September after slipping from 56.9 to 54.2 the previous month. Confidence remains well above its reading in September 2013 and has now increased in each of the first three quarters of 2014.

What stands out in the report, however, is the variation between what employers see inside the walls of their companies and what they see outside those walls.

The Company Index, which measures survey respondents’ confidence in the situations of their own operations, rose 1.5 points in September to 58.0, recouping an August decline. The Employment Index gained a point to 55.1, and the Sales Index added eight-tenths to 59.3.

Meanwhile, the U.S. Index of business conditions prevailing nationally was off 1.8 points at 47.0, and the Massachusetts Index of conditions within the Commonwealth declined 2.0 to 50.7.

“Economic growth has probably decelerated since the second-quarter rebound, but it is possible that these declines reflect political dissatisfaction, concerns about effective leadership and policy,” said Katherine A. Kiel, Professor of Economics at the College of the Holy Cross.

“If actual business conditions were driving the drop, we would expect to see that in the company indicators, which remain strong.”

Adds Michael Goodman, Associate Professor of Public Policy and Director of the Center for Policy Analysis at the University of Massachusetts, Dartmouth, “These are good, solid numbers indicating that the commonwealth’s moderate expansion is continuing.

“Notably, respondents report plans to increase net job creation – 23 percent expect to add staff in the next six months and 11 percent anticipate reducing headcount – which is a very encouraging sign.”

If employers do have concerns about political leadership, the Business Confidence Index suggests they do not expect the November elections to address them. The Current Index, tracking employers’ assessment of existing business conditions, added half a point in September to 53.9, while the Future Index, measuring expectations for the next six months, shed two-tenths to 54.9.

Manufacturers and firms with 25 or fewer employees rated Massachusetts conditions negatively, while other employers were generally positive about the state.

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a 100-point scale on which 50 is neutral, the Index attained a historical high of 68.5 in 1997 and 1998; its all-time low was 33.3 in February 2009. 

Richard C. Lord, President and CEO of AIM, said the contrast between lower scores for state and national conditions and higher ratings for company-specific factors underscores the need for political candidates to debate economic issues.

“I believe that employers – and indeed voters generally – would like to see a greater focus in this election cycle on substantive economic issues,” Lord went on.

“In the Massachusetts gubernatorial contest, for example, the candidates themselves are meeting with business leaders and offering economic policy proposals, but media coverage tends to be all about the ‘horserace’ aspect and the candidates’ personal images. Our nation and state face critical real-life economic decisions in the next few years, so we cannot afford to treat the upcoming elections for Congress, constitutional offices, and the legislature as sports events or celebrity showcases.”

Topics: AIM Business Confidence Index, Massachusetts employers, Economy

Economic Growth Takes a Summer Holiday

Posted by Andre Mayer on Sep 5, 2014 9:58:02 AM

Economic growth appears to have taken a summer holiday during August.

BCI.August.2014Two separate economic reports released this morning suggest that steady, upward momentum in national hiring and in Massachusetts business confidence paused last month during the dog days of summer. Economists are disappointed with the numbers, but stress that both the state and national economy remain far stronger than they were at this time last year.

Associated Industries of Massachusetts announced that its Business Confidence Index lost two points in August to 54.2, while remaining well above its level of a year before (48.7).

“As the elections approach, political uncertainty – particularly at the national level – may be contributing to unease in the employer community,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Historically, the Index has declined in August more often than not,” Torto added. “Economic indicators for the month – financial markets, employment, consumer confidence, the ISM manufacturing index – have been generally positive. On the down side is international news, including conflict in the Middle East and Ukraine and economic problems in Europe.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The business confidence numbers came during a month when U.S. employers hired at a surprising weak pace. The Labor Department reported today that the economy created 142,000 jobs during August, the first time since January that job growth remained below the 200,000 threshold needed to absorb new workers into the labor force.

Economists had been estimating a 225,000 jump in payrolls. The unemployment rate dropped 0.1 percentage point to 6.1 percent last month.

Overall, the economy expanded at a 4.2 percent annual rate in the second quarter, compared with a 2.1 percent contraction in the first three months of 2014. Economists foresee a growth rate of about 3 percent in the second half of this year.

Many observers believe the economy is still finding equilibrium after swinging from first-quarter contraction to a catch-up period during the second quarter as companies restocked inventories and resumed normal activity delayed by bad weather at the beginning of the year.

U.S. employers had been creating an average of 230,000 per month prior to the summer slump.

Massachusetts employers remain more bullish about their own companies than about the economy as a whole.

The Company Index of the AIM confidence report, reflecting survey respondents' assessments of conditions for their own operations, was up 4.1 points on the year to 56.5. The Employment Index was up 5.4 at 54.1; and the Sales Index, the only component to gain from July to August, was up 4.6 points to 58.5.

“We continue to see a moderate upward trend in the employment results,” said BEA member said Alan Clayton-Matthews, professor at the School of Public Policy and Urban Affairs at Northeastern University. “The great majority (69%) of employers responding to the survey planned to stand pat on staffing over the next six months, but those expecting to add personnel outnumbered those foreseeing reductions by almost three to one (23%-8%).”

Topics: AIM Business Confidence Index, Jobs, Unemployment

Strengthening Employer Confidence Spurs Job Growth

Posted by Andre Mayer on Aug 5, 2014 9:45:16 AM

Employer confidence surged again in Massachusetts during July amid a growing sense of economic normalcy.

BCI.July.2014The Associated Industries of Massachusetts Business Confidence Index (BCI) added 2.5 points to 56.2, up 6.2 points from January and 3.7 points from its level of July 2013. The results were noteworthy in part because employer perceptions of the national economy returned to positive territory for the first time since before the Great Recession in August 2007.

"Business confidence in Massachusetts, after sliding into the neutral range for more than a year, has climbed back to within a point of its post-recession high of 57.1 in April 2012," said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design. The Index was up 3.7 points compared to July 2013.

"The biggest year-to-year gainers among our sub-indices are those tracking general business conditions in the state and nation, which appears to reflect a growing sense among employers that they are operating in something like a 'normal' economy."

The recent upturn in employer confidence follows 18-months in which attitudes meandered without clear direction in a narrow range. Uncertainty arising from political deadlock in Washington and the threat of financial crisis in Europe, plus fiscal drag from tax increases and unsteady economic growth in the U.S. and globally, held down confidence.

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a 100-point scale on which 50 is neutral, its historical high was 68.5, attained in 1997 and 1998; its all-time low was 33.3 in February 2009. 

The biggest dividend from improving employer confidence is accelerated job growth. The BCI Employment Index added 1.4 points to 56.0, and the Sales Index edged up three-tenths to 57.9. Each was up between two and three points on the year.

"Many Massachusetts employers added staff in the first half of the year, with additions outweighing reductions by almost three to one (34 percent-12 percent), and expectations for the next six months are similar," said Sara L. Johnson, Senior Research Director of Global Economics at IHS Global Insight, a BEA member. "Greater confidence in the stability of the economy is at last making employers more willing to hire."

The Current Index, tracking employers’ assessment of existing business conditions, added three points from June to 55.8, while the Future Index, measuring expectations for the next six months, rose two points to 56.6.

The U.S. Index of business conditions prevailing nationally rose 3.7 points in July to 51.9, and the Massachusetts Index of conditions within the commonwealth gained 4.9 to 55.8. Compared to last July, these sub-indices were up 5.9 and 6.4 respectively.

"For the first time since before the Great Recession, our U.S. Index has returned to positive ground above 50," said Richard C. Lord, President and Chief Executive Officer of AIM.

"This sub-index was the laggard, and in fact it is clear that lack of confidence in the ability of the federal government to provide effective policy direction on fiscal and economic matters substantially impeded the recovery as a whole. The growth of business confidence in recent months appears to be based in large part on an expectation that private-sector demand has finally turned a corner, rendering the economy less vulnerable to political disruption."

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Massachusetts Employer Optimism Grows at Halfway Point of 2014

Posted by Andre Mayer on Jul 1, 2014 9:41:47 AM

BCI.June.2014As the Massachusetts economy reaches the halfway mark of 2014, we know several important things about the mindset of Bay State employers:

  • They are far more confident about the sustainability of the economic recovery than they were are the beginning of the year;
  • Their persistent skepticism about the inability of government to manage fiscal issues has abated, at least for the moment;
  • Small companies, which held a far darker view of the economy than their larger counterparts for 18 months, have now grown equally optimistic as the overall economy has strengthened;
  • They remain more bullish about the Massachusetts economy than the national outlook, though the gap between the two is closing.

The Associated Industries of Massachusetts Business Confidence Index (BCI) declined slightly to 53.7 percent in June, but the gauge remains almost three points above its January reading and 4.7 points more than in June 2013. The Index, released this morning, posted an overall confidence reading of 53.8 for the second quarter.

"The positive quarterly average, reflects the diminution in recent months of major economic policy conflict in Washington which has contributed to stronger business confidence," Raymond Torto, global Chairman of research at CBRE and Chair of the AIM Board of Economic Advisors (BEA) noted.

"With less ambient uncertainty, employers are becoming more positive about adding personnel, a sign of confidence that is reflected in our survey," Torto added. "The other notable improvement is in responses from small employers, those with 25 or fewer employees, who are now about as optimistic as mid-size firms."

The AIM Index has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009. In June 2013 it stood at 48.9.

Every measure of employer confidence has strengthened during the past 12 months.

The Current Index, which assesses overall business conditions at the time of the survey, was 4.1 points above last June’s level at 52.8, and the Future Index, measuring expectations for six months out, was up 6.7 from a year before at 54.6. The Massachusetts Index, assessing business conditions within the commonwealth was up 3.3 points on the year to 50.9, and the U.S. Index of national business conditions was 7.6 ahead of last June at 48.2.

"Massachusetts has generally outperformed the nation economically since the onset of the recession," said Alan Clayton-Matthews, professor at the School of Public Policy and Urban Affairs at Northeastern University, a BEA member."Our state is well positioned to continue to thrive, but is inevitably standing out less as the rest of the country returns to normal performance."

"The employment results, even with a marginal loss for the month, continue to reflect a moderate upward trend," said BEA member Elliot Winer, Chief Economist, Northeast Economic Analysis Group LLC. "Among employers responding to the survey, 41 percent expected to add personnel in the next six months, while only 10 percent foresaw staff reductions, a marked improvement from the already positive 38 percent-23 percent split for the prior six months."

Richard C. Lord, President and CEO of AIM and a BEA member, said two areas of improvement are particularly significant.

"Small employers are much more confident than they had been, and are looking to add jobs, which speaks to a revival of the entrepreneurial spirit so important to our economic future," he noted. And, he added, the overall change of attitude among employers towards a great willingness to hire "offers hope that we are definitively past the ‘jobless recovery’ phase and can continue to bring unemployment down across the commonwealth."

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Employer Confidence Hits 21-Month High

Posted by Andre Mayer on Jun 3, 2014 9:47:00 AM

Confidence among Massachusetts employers surged to its highest level in 21 months during May, raising expectations that hiring and capital investment will follow.

BCI.May.2014The Associated Industries of Massachusetts Business Confidence Index rose 1.8 points to 54.8, its highest reading since August 2012 (55.2).

"With its gains in April and May, the Index appears to have broken out of the narrow range within which it had fluctuated for the previous 18 months," said Raymond G. Torto, global Chairman of research at CBRE and Chair of AIM's Board of Economic Advisors (BEA).

"Economic conditions have been improving at the state and national levels, and in fact globally, but until now sentiment among Massachusetts employers has lagged behind. As a higher level of confidence becomes established, we should see more investment and job creation in our commonwealth."

The rise in employer confidence crossed industry sectors, company sizes and regions of the commonwealth. Even small businesses, which have been far more bearish than larger employers throughout the recovery, tilted toward the positive side in May.

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a scale on which 50 is neutral, its historical high was 68.5, attained in 1997 and 1998; its all-time low was 33.3 in February 2009. 

Business confidence had been treading in a narrow range around neutral for the past 18 months as a sluggish recovery and fiscal battles in Washington left employers reluctant to take risks. The three-month confidence rally comes amid accelerating job growth that has reduced the U.S. unemployment rate and boosted Massachusetts job levels to an all-time high. The Massachusetts economy grew at an estimated 2.6 percent annual rate in the first quarter after surging 4.4 percent during the final three months of 2013.

The Current Index, tracking employers’ assessment of existing business conditions, added 2.1 points from April to 53.5, while the Future Index, measuring expectations for the next six months, rose 1.6 to 56.1.

"These results, though only moderately positive, look reasonably good against the background of the national economy's uneven performance so far this year," remarked Fred Breimyer, regional economist at the FDIC. "Among survey respondents, expectations of stability and growth are now predominating over fear of uncertainty."

The U.S. Index of business conditions prevailing nationally rose 3.3 points in May to 49.7, and the Massachusetts Index of conditions within the commonwealth was up three points to 53.0.

"The U.S. Index, although literally neutral, is at its best level since October 2007, which was its last reading above 50 (51.0)," Breimyer said. "Also, it is worth noting that the national index has been below its state counterpart every month for five years."  

The Company Index, which measures survey respondents’ overall confidence in the situations of their own operations, added a point in May to 57.1. The Sales Index gained 1.9 points to 58.2, while the Employment Index, after surging in April, held at 54.8.

Richard C. Lord, President and Chief Executive Officer at AIM, said the AIM index underscores the important of policymakers creating a stable economic environment for employers.

"We are on the right course," he concluded, "and we should stay the course. Concluding the debate about UI reform and enacting a constructive jobs bill that does not change the current policy on non-compete agreements would end the session on a positive note. The best public policy right now is to avoid rocking the boat."

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Economic Warmup Thaws Employer Confidence

Posted by Andre Mayer on May 6, 2014 11:46:00 AM

Is a warming economy finally melting employers’ frosty view of the recovery?

BCI.April.2014The Associated Industries of Massachusetts Business Confidence Index for April suggests that the answer may be yes.

The Index added 1.9 points in April to 53.0, its best reading more than a year and a half. It marked the second consecutive month of improving employer confidence and left the Index a full 2.5 points above its level at the beginning of the year.

"The last time the Index was at or above this level was in August 2012, just before the impending 'fiscal cliff' crippled confidence in fiscal policy leadership," said Raymond G. Torto, global Chairman of research at CBRE and Chair of AIM's Board of Economic Advisors (BEA).

"Since then we have been stumbling along, with ups and downs but no real forward momentum. While this could be another more or less random fluctuation, we have reason to hope that employer confidence is finally beginning to catch up with improving economic fundamentals."

Those fundamentals include accelerating job growth that has reduced the U.S. unemployment rate to 6.3 percent and boosted Massachusetts job levels to an all-time high. The Massachusetts economy grew at an estimated 2.6 percent annual rate in the first quarter after surging 4.4 percent during the final three months of 2013.

“We are seeing steady if not spectacular job creation both nationally and here in Massachusetts, where we have set a new record for total employment," Torto said.

The AIM Index has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009. In April 2013 it stood at 50.5

Nearly all the components that make up the Index were up from March and from last April.

The Company Index, reflecting survey respondents' assessments of conditions for their own operations, rose 2.5 points in April to 56.1.  The Sales Index added 1.6 to 56.3, and the Employment Index was up 4.7 at 54.8.

Thirty-two percent of employers responding to the survey expect to add personnel in the next six months, while only 11 percent foresee staff reductions – much more positive than the 26 percent-18 percent split reported for the previous six months, which was itself an improvement from past surveys.

"The employment results are striking," noted BEA member Michael A. Tyler, Chief Investment Officer at Eastern Bank Wealth Management.

"They may mark a shift from a post-recession to an expansion mindset, as employers become more open to adding staff."

Confidence was lower in the manufacturing sector (51.9, +1.5) than among other employers (54.6, +2.5), and lower outside Greater Boston (50.0, -5.5) than within the metropolitan area (54.3, +3.3). Smaller employers were much more negative than larger ones.

"These differences fit into the big picture of how our economy is changing," Tyler pointed out. "Centers of innovation, like the Boston area, and innovative companies are thriving; we see predominantly positive responses from eastern Massachusetts manufacturers as well as service providers.  More traditional industries, like many in central and western Massachusetts, have little ability to raise prices as costs increase, and face the disruption and consolidation of supply chains in which the occupy intermediary positions."

Topics: Employers, AIM Business Confidence Index, Massachusetts economy

Employers Maintain 'Show Me' Attitude Toward Economy

Posted by Andre Mayer on Apr 1, 2014 9:55:00 AM

Massachusetts employers might just as well be from Missouri these days as they continue to exhibit a “show me” attitude about the strength of the economy.

BCI.March.2014The Associated Industries of Massachusetts Business Confidence Index rose 1.1 points in March to 51.1, holding close to a neutral 50 on its 100-point scale. Bay State employer sentiment has remained locked for 18 months in a narrow range between optimism and pessimism as both the state and national economies have failed to develop sustained growth momentum.

"Business confidence in Massachusetts has been in neutral range for a year, dipping below neutral when there was a threat of federal default and when the government shut down in October, but otherwise with not much upside," said Raymond G. Torto, global Chairman of research at CBRE and Chair of AIM's Board of Economic Advisors (BEA).

Torto and other analysts point to several factors that are holding down confidence, including a generally negative view of national conditions, deadlocked national politics, weak readings among small employers and hiring levels that have been less robust than might be expected during a recovery period.

The AIM confidence index is up a point from its level of last March, but below where it was as recently as September.

The Current Index, tracking employer assessment of existing business conditions, added nine-tenths of a point from February to 49.3, while the Future Index, measuring expectations for the next six months, rose 1.2 to 52.9.

"The numbers are a bit better than February's, and last March's, but still reflect some fear of economic uncertainties," remarked Sara L. Johnson, Senior Research Director of Global Economics at IHS Global Insight, a BEA member. "The fundamentals driving consumer and business spending (incomes, balance sheets, and credit availability) are improving."

The U.S. Index of business conditions prevailing nationally rose 1.9 points in March to 46.2, and the Massachusetts Index of conditions within the commonwealth had a similar gain to 48.6.

Neither increase ignited much hiring, the survey shows. The Employment Index lost 1.3 points to 50.1. Employers, many of them facing pressure on prices, are reluctant to add staff.

"It is increasingly clear that lack of confidence among smaller employers is a serious concern for Massachusetts," said Richard C. Lord, AIM’s President and CEO, a BEA member.

"In our March survey, larger employers were positive about business conditions in our state, but those with 25 employees or fewer were markedly negative. Ours is predominantly a small-employer economy, and our hopes for creating jobs to bring down the unemployment rate – particularly in regions of the commonwealth that are being left behind in the recovery – depend on the growth of those small firms."

Topics: Small Business, AIM Business Confidence Index, Massachusetts economy

Maintain Local Property Tax Exemption: File by April 1 Deadline

Posted by Brad MacDougall on Mar 19, 2014 4:08:00 PM

april 1 deadline for tax exemptionManufacturing or research and development companies entitled to local property-tax benefits must file the Annual Certification of Entity Tax Status online with the Massachusetts Department of Revenue (DOR) by April 1, 2014 to claim those benefits.

Click here for the DOR resource page for the April 1 filing deadline.

Corporations seeking to maintain (or acquire) favored property-tax status must file by the deadline to ensure that they appear on DOR’s Division of Local Services List of Corporations for 2014.  Cities and towns use “The List” to determine which corporations and entities treated as corporations are entitled to local property tax relief. The List also specifies for Massachusetts tax purposes, businesses that have been granted the “manufacturing corporation” classification.

Joseph X. Donovan, a tax lawyer at Sullivan and Worcester, says because of tax law changes in 2009, the Department of Revenue could no longer use filings with the Secretary of the Commonwealth to alert local officials about the tax status of a company.

“While the change to a new procedure was necessary, there is a real risk that companies —unaware of the new annual filing requirement to protect favored local property tax statuswill find themselves effectively declassified, with potentially very harsh consequences,” Donovan said.

“While they will be able to cure the declassification by challenging it in the Appellate Tax Board, that route can be quite costly. Moreover,  the resolution of any dispute before the Board can take a long time.   We should hope that taxpayers who find themselves before the Board in such circumstances will be permitted to quickly and informally resolve with opposing counsel the ‘foot fault’ of failure to file the form.”

The DOR publishes “The List” electronically on its Web site on or about April 1. Omission from the list or any particular classification may be appealed by the employer.

Here are some resources for employers:

If you have trouble with the registration process, or with accessing your account, please contact DOR Customer Service at 617-887-6367.  If you have questions about completing the Annual Certification of Entity Tax Status online application after reviewing the FAQs, please contact the Division of Local Services.

Should you have any additional questions, please contact Brad MacDougall, Vice President for Government Affairs or 617-262-1180.

Topics: A.I.M. Mutual Insurance Company, AIM Employer Issues Survey, Financial Services, Associated Industries of Massachusetts, AIM Business Confidence Index, Massachusetts economy, Employment Law, Taxes, John Regan, Annual Certification of Entity Tax Status, Certification of Entity Tax Status, DOR, Department of Revenue, DOR List of Corporations

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