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Employer Confidence Rebounds in May

Posted by Christopher Geehern on Jun 6, 2017 8:29:22 AM

Massachusetts employer confidence resumed its upward trajectory during May as companies expressed renewed optimism about their own business prospects and hiring plans.

BCI.May.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) edged up 0.6 points to 60.8 last month after retreating from a 13-year high in April. The Index has increased in eight of the past nine months and now stands 3.1 points higher than in May 2016.

The May advance was led by strengthening employer confidence in their companies, rather than their overall views of the state and national economies. Manufacturers were particularly bullish, ending May a full 7 points higher than a year earlier.

“We were not surprised to see confidence readings correct slightly in April, and the May results suggest that employers still feel positive about the future,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“In fact, employers seem to have more confidence in their own economic prospects than in the broader economies in which they operate.”

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 index has remained above 50 since October 2013.

The constituent indicators that make up the overall Business Confidence Index were mixed during May.

The Massachusetts Index, assessing business conditions within the commonwealth, lost 1.2 points to 62.1, leaving it a slim 1.8 points higher than in May 2016.

The U.S. Index of national business conditions shed 2.3 points to 57.2, its second consecutive decline. May marked the 86th consecutive month in which employers have been more optimistic about the Massachusetts economy than the national economy.

The Current Index, which assesses overall business conditions at the time of the survey, rose 0.5 points to 60.4 while the Future Index, measuring expectations for six months out, increased 0.8 points to 61.3. The Future Index was 3.2 points higher than a year ago.

The Company Index, reflecting overall business conditions, gained 2.2 points for the month and 3.2 points for the 12-month period to 60.2. The Employment Index rose 2.3 points to 58.5, and the Sales Index was up 1.5 points to 62.

The AIM survey found that nearly 39 percent of respondents reported adding staff during the past six months while 19 percent reduced employment. Expectations for the next six months are more optimistic – 38 percent hiring and only 10 percent downsizing.

Sara L. Johnson, Senior Research Director, Global Economics, IHS Markit, and a BEA member, said it is encouraging that employers are looking at their own balance sheets and feeling confident enough to anticipate stepped-up hiring.

“The overall AIM Index continues to move in a range that suggests solid optimism among employers, both in the current time frame and six months into the future. As optimism turns to hiring, the tight labor market is likely to put upward pressure on wages,” Johnson said.

The changing dynamics of the labor market were underscored last week when the government issued a jobs report that reflected a decline in the share of working-age adults who have a job or are in the market for one. Overall participation in the labor force has hovered below 63 percent during the recovery, compared with more than 66 percent before the recession.

For the second time in three months, Western Massachusetts companies were more confident in May than those in the eastern portion of the commonwealth. Western Massachusetts employers posted a 61.2 confidence reading in May versus 60.9 for employers in the western part of the state.

AIM President and CEO Richard C. Lord, also a BEA member, said employers appear to be drawing encouragement from within rather than looking for clues amid the chaotic and often contradictory signals of the overall economy and political debate.

“Employers, like everyone else, are still trying to digest the economic implications of the United States pulling out of the climate-change accord. They are also trying to balance the promise of meaningful federal tax reform with concern about renegotiated trade agreements and Medicaid changes that could blow a $2 billion hole in the state budget,” Lord aid.

“Amid all those factors, the potential acceleration of hiring speaks to the resiliency of Massachusetts employers and the global pre-eminence of their products and services.”

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Business Owners, Managers Talk about Their First Summer Jobs

Posted by Christopher Geehern on Aug 3, 2016 11:56:53 AM

They may be running the most successful companies in Massachusetts today, but many senior executives at AIM-member businesses began their work lives with summer jobs delivering newspapers, working clam shacks on the Cape or picking vegetables.

Caddy.jpgAIM asked business owners and managers participating in the monthly Business Confidence Index what they did for their first summer jobs.  The responses underscored the fact that everyone pays his or her dues when entering the work force, whether working on farms, in gas stations or at summer camps.

“Paper boy at age 11, janitor at age 14, construction at 15, marine mechanic at 17, engineer at 22, global manager of sustainable operations at 28,” responded one manager who believes the experiences of his early summer jobs prepared him well for later career challenges.

“I loved it and it gave me great experience dealing with people, cash handling and generally just being required to think on my feet and make responsible decisions,” said another participant whose first summer job was working in the Snack Shack at the Orchards Golf Course in South Hadley.

Golf courses were a common source of summer employment, whether in lawn maintenance, caddying or food service. Other popular jobs were landscaping, construction, restaurants, commercial fishing and babysitting.

Many people fondly recalled working at iconic locations around the state.

“Serving Ice Cream at the Rt. 1 Saugus (Dinosaur) Mini-Golf and Ice Cream,” recalled one survey participant.

The list of summer jobs also provides reminders of how much things have changed, and continue to change, in the regional economy.

“Pumping gas at a full-service gas station.”

“Stocking shelves at First National stores.”

“Flipping burgers at Hardees.”

“Boat yard worker at 85 cents per hour.”

Indeed, there is no shortage of nostalgia about summer jobs.

“I use to mow lawns outside an office building and always told myself that someday I wanted to work inside the building. Now that I work inside an office building, there are plenty of days I look outside at the young people mowing the lawn in the beautiful sunny weather and wish I could be back outside the building,” one participant wrote.

Topics: Massachusetts employers, Jobs

AIM Executive to Lead Career Center Board

Posted by Christopher Geehern on Mar 30, 2016 4:04:31 PM

Gary MacDonald, Executive Vice President of the Associated Industries of Massachusetts Employers Resource Group, has been elected president of the Board of Directors of FutureWorks Career Center in Springfield, the organization announced today.

MacDonaldSmallVerticle.jpgMacDonald, a veteran human resource executive who has directed AIM’s HR and training operations since 2013, will serve a two-year term. He succeeds MacArthur Starks Jr., an Assistant Vice President at AIM-member MassMutual, who served in the position for four years.

FutureWorks, part of the Massachusetts One-Stop Career Center system, provides job seekers and businesses a range of services such as job postings; workshops on resume writing, interviewing, and salary negotiations; use of computers, FAX machines, phones and copiers; and access to trained professionals to assist members in their job search, career planning and management. 

During Fiscal Year 2015, FutureWorks served 11,740 job seekers who visited the career center 51,160 times. The organization served nearly 600 business during that time with recruiting and staff development.

“I am honored to serve as president of the FutureWorks Board of Directors as the career center celebrates its 20th anniversary,” MacDonald said.

“At a time when employers cite the ability to hire and retain qualified workers as their primary challenge, organizations like FutureWorks are indispensable for their ability to match talented job seekers with the needs of business.”

MacDonald has worked with hundreds of Massachusetts employers on leadership development, organizational effectiveness and HR management. He joined AIM in 2002 after building three decades of business experience with global companies such as Thomson Financial and General Electric, and his expertise ranges from facilitating strategic planning with top management to teaching foundational management skills to brand new supervisors

Also elected as officers at the March 23 meeting of the FutureWorks board of directors were Marylou Fabbo, a Partner with the law firm Skoler Abbott & Presser, vice-president; Josephine Sarnelli, a CPA, treasurer; and George Kohout, Director ABE/ESOL Services and Workforce Development at Springfield Technical Community College, secretary.

Other members of the board of directors include:

  • Joanne Berwald, Vice-President Human Resources, Mestek
  • Brian Connors, Deputy Director Economic Development for the City of Springfield
  • Kermit Dunkelberg, AVP Workforce Development, Holyoke Community College
  • Mike Grandfield, Senior VP Commercial Relationship Manager, Berkshire Bank
  • Ronn Johnson, President CEO, Martin Luther King Jr. Family Services
  • Denise Jordan, Chief of Staff, Mayor of Springfield
  • Paul Judd, Vice-President Human Resources, Baystate Health
  • Vicki Shrewsbury, Director Talent Acquisition, Smith & Wesson

The volunteer board oversees FutureWorks program services and provides financial oversight.

 

Topics: Associated Industries of Massachusetts, Human Resources, Jobs

The State of Massachusetts Business

Posted by Christopher Geehern on Jan 20, 2016 1:58:45 PM

Associated industries of Massachusetts President and Chief Executive Officer Richard C. Lord delivered his annual State of Massachusetts Business address on January 15, 2016 to more than 250 business leaders from throughout the commonwealth.

Lord said the decision by General Electric Company to base its headquarters in Boston underscores a coalescing of economic activity in major global cities, a development that simultaneously benefits Massachusetts and challenges leaders to spread the benefits beyond Route 495.

Topics: Massachusetts economy, AIM Executive Forum, Jobs

Why the 'Millionaire Tax' Will Hurt Jobs

Posted by John Regan on Jan 19, 2016 7:30:00 AM

Editor's note - John R. Regan, Executive Vice President of Government Affairs for Associated Industries of Massachusetts (AIM), will deliver the following comments today to the Joint Committee on Revenue in opposition to H.3933, An Initiative Petition for An Amendment to the Constitution of the Commonwealth to Provide Resources for Education and Transportation through an additional tax on Incomes in excess of One Million Dollars (Ballot Initiative 15-17)

ManufacturingWorkerSmall.jpgIt is no accident that we call ourselves a “commonwealth.” 

The preamble of the Massachusetts Constitution says, “the body politic is formed by a voluntary association of individuals: it is a social compact, by which the whole people covenants with each citizen, and each citizen with the whole people.”

This notion is affirmed in the language of Article XLIV of the Constitution, which states that taxes “shall be levied at a uniform rate throughout the commonwealth upon incomes derived from the same class of property.”

Now comes this petition for an amendment changing the language of Article XLIV in a manner that would increase by 78 percent taxes paid by those with incomes in excess of $1 million, adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets.

As a mathematical proposition, those earning $1 million of income per year currently pay 95 percent more tax than those making $50,000 annually. Income of $50,000 generates a tax obligation of $2550, while the $1 million dollar income generates $51,000 of income tax (all things being equal).  According to the ballot question language, every dollar of income above a million will be subjected to a surtax of 4 points over the current 5.1%

Since the procedural options for the committee are limited, AIM will leave to the wisdom of the voters the equity and advisability of a 78 percent increase of the tax obligation for fewer than 1 percent of our fellow citizens 

Some facts are important to note:

  • This significant new tax burden will fall on individuals and certain business entities paying taxes at the individual rate; it is hard to imagine that this new obligation will not impede investment, employment and certain locational decisions.
  • The Department of Revenue estimates (with some assumptions) that the proposal could generate $1.6 billion to $2.2 billion, with $1.9 billion identified as the median.
  • The $1.9 billion tax increase would be paid by roughly 19,500 filers, 80 percent of whom are anticipated to file with some business income.
  • Those 19,500 filers represent half of 1 percent of all tax returns filed with the Department of Revenue.
  • Eighty-six percent of the affected taxpayers would be married couples filing jointly, and 11 percent would be individual filers with earnings of more than $1 million.

Many advocates for this ballot question focus on the revenue derived therefrom as opposed to the uneven method of its generation.  Setting aside the fairness, or lack thereof, I would like to turn to the issue of how the new revenue is to be used.

The language of the question states that the revenues raised by the new tax shall be used “…to provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes.”

Section 2 of Article XLVIII of the Constitution clearly enumerates so-called “Excluded Matters” by stating in part, “No measure… that makes a specific appropriation of money from the treasury of the commonwealth, shall be proposed by an initiative petition…”

So for the question to be constitutionally valid, the legislature would retain the ability to use the new revenue derived from the 78 percent tax increase for any public purpose the legislature deems appropriate. 

Any representation about how the money is used is wishful thinking that the constitution itself prohibits.

Last week, the commonwealth was successful in landing the eight largest corporation in the world to Boston.  This company is leaving its current home state in part because of concerns about unfair taxation.  We should look long and hard at this question that raises so much from so few and ask, does this imbalance make the commonwealth a better, or a worse place?

AIM would suggest that it makes Massachusetts an unfair place.

Topics: Massachusetts economy, Taxes, Jobs

GE Move to Boston Represents Watershed for Economy

Posted by Christopher Geehern on Jan 13, 2016 2:55:26 PM

Today’s decision by General Electric Company to locate its corporate headquarters in Boston represents a watershed for the Massachusetts economy, the commonwealth’s most influential employer association said.

GE.jpgAssociated Industries of Massachusetts, which counts GE among its charter members, is proud to have played a significant role in the months of discussions that took place among the company, Boston and state officials and several cornerstone Bay State employers. The decision burnishes Greater Boston’s already strong reputation as a rapidly growing center of ideas and innovation.

“It’s a great day for Massachusetts as General Electric Company, one of the most respected companies in the world and a charter member of Associated Industries of Massachusetts (AIM), has chosen to locate its corporate headquarters in Boston,” said AIM President and Chief Executive Officer Richard C. Lord, who participated in a meeting with GE executives in the North End of Boston in September.

“GE’s move brings a host of benefits to the Massachusetts economy, from top-level jobs to innovation to an unmatched global market presence. AIM and its 4,500 member employers welcome GE headquarters to the commonwealth and congratulate the Baker and Walsh administrations for recognizing that taxes, work force and other elements of the business climate really matter in corporate location decisions.”

The company said Boston is a logical location for a company seeking to marry manufacturing with advanced technology.

“GE aspires to be the most competitive company in the world,” GE Chairman and CEO Jeff Immelt said in a statement.

“Today, GE is a $130 billion high-tech global industrial company, one that is leading the digital transformation of industry. We want to be at the center of an ecosystem that shares our aspirations. Greater Boston is home to 55 colleges and universities.

“Massachusetts spends more on research and development than any other region in the world, and Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.”

GE will bring roughly 800 jobs to Boston - 200 from corporate staff and 600 digital industrial product managers, designers and developers split between GE Digital, Current, robotics and Life Sciences. A GE Digital Foundry will be created for co-development, incubation and product development with customers, startups and partners.

GE already has a significant presence in Massachusetts, with nearly 5,000 employees across the state in businesses including Aviation, Oil & Gas and Energy Management. In 2014, GE moved its Life Sciences headquarters to Marlborough, and in 2015 GE announced its energy services start-up, Current, would also be headquartered in Boston.

AIM worked with Governor Charlie Baker and Boston Mayor Marty Walsh to bring a handful of business leaders together to meet with GE’s site selection team for a dinner at Tresca in the North End on September 14. Representatives from two AIM member companies – EMC and State Street Corporation – joined Lord, Baker, Walsh and Secretary of Housing and Economic Development Jay Ash.

“One of the strengths I talked about was the fact that the governor, Legislature and the mayor have worked together in a bipartisan manner to create a predictable business climate,” Lord said.

He noted that GE was the second company to join AIM in 1915 and that GE Executive Richard Rice, served as the first chairman of the association from 1915-1917.

Topics: Massachusetts economy, Technology, Jobs

The Future of the Massachusetts Economy

Posted by Christopher Geehern on Nov 17, 2015 11:47:00 AM

Associated Industries of Massachusetts last night marked 100 years of creating jobs and economic opportunity for the people of Massachusetts. Check out our new video about the three talented people who represent the future of the Massachusetts economy.

 

Topics: Associated Industries of Massachusetts, Massachusetts economy, Jobs

100 Years of AIM and the Value of a Job

Posted by Rick Lord on Nov 16, 2015 7:30:00 AM

Editor's note - Richard C. Lord is President and Chief Executive Officer of Associated Industries of Massachusetts. His comments come as AIM prepares to celebrate its 100th anniversary tonight.

I grew up in North Adams, in a world defined by family, community and work.

The three elements existed symbiotically – families bonded around common values; neighborhoods
joined together to form communities; and innovative employers created jobs that allowed hard-working people to support their families.

North Adams was a tightly-knit Berkshire County mill town where almost everyone you knew (and you knew most everyone) worked either at Sprague Electric, GE Pittsfield or North Adams Regional Hospital.

Few people in North Adams could tell you what Associated Industries of Massachusetts was, but we all grew up breathing the air of its accomplishments. So did kids raised in Southbridge around American Optical, in Springfield near UT Diesel Systems or in Quincy by the shipyard.

lord_alternate.medium

Not to mention the ballfields, parks and street signs that companies often donated.

All this came back to me late last year when my father, who spent 40 years working for General Electric in Pittsfield, passed away on the eve of the 100th anniversary of AIM. I thought about all the fathers and mothers who have worked hard at AIM-member companies during the past century so they might create a future for their children, take them on vacation, pay for trips to the emergency room, send them to college and then and enjoy a bit of retirement.

Associated Industries of Massachusetts conducts its public policy advocacy in the marble halls of the State House on Beacon Hill, but the ultimate value of what we and our 4,500 member employers do each day is found in thousands of living rooms around the commonwealth.

We work with government to help employers create the kind of economic opportunity that will allow more moms and dads to set down their tools, computers, briefcases and research notes at the end of the day and enjoy the kind of life for which we all hope in the next century.

Topics: Associated Industries of Massachusetts, Massachusetts economy, Jobs

The Seeds of Spring Hiring

Posted by Christopher Geehern on Nov 9, 2015 7:30:00 AM

The economic landscape may look a bit fallow in this fall season of China worries and political gridlock, but several recent reports suggest that the seeds of significant spring of job growth lie just beneath the surface.

ManufacturingWorkerSmallThe Associated Industries of Massachusetts Business Confidence Index released last week found that 32 percent of Massachusetts employers surveyed during October plan to add workers during the next six months while only 7 percent anticipate cutbacks. That’s a far brighter picture than that of the previous six months when 27 percent of companies hired people and 18 percent reduced their staff levels.

The news was even better on Friday as the government reported that the U.S. economy added 271,000 jobs last month on strong hiring that brought the unemployment rate down to a seven-year low of 5 percent. Average hourly earnings also bounced back, rising 0.4 percent in October and 2.5 percent over the last 12 months, the healthiest pace since 2009.

The unemployment rate for Massachusetts, which has consistently outperformed the national economy throughout the recovery, was 4.6 percent for September. October state data is scheduled for release on November 19.

Employers remain circumspect in the face of an economy that slowed to a 1.5 percent growth rate during the third quarter (the state growth rate also slipped to 2.0 percent), but they appear to regard the slowdown as a cyclical pause rather than a structural shift. It’s the same view that experts believe will now persuade the Federal Reserve to increase interest rates before the end of the year.

“The employment responses reveal optimism,” said Fred Breimyer, regional economist at the FDIC and a member of the AIM Board of Economic Advisors that oversees publication of the Business Confidence Index.

Analysts say almost every element in the Friday jobs report was positive. For example, the broader U-6 measure that takes account of underemployment and discouraged workers fell below 10 percent at 9.8 percent.

“It was pretty much everything you could ask for in a jobs report,” Michelle Meyer, deputy head of United States economics at Bank of America Merrill Lynch, told The New York Times. “Not only was the headline number strong, but there were upward revisions for prior months, the unemployment rate fell and wage growth accelerated.”

The degree to which that wage growth continues depends upon whether hiring by employers is broad enough to finally eliminate the slack that built up in the labor market after the recession of 2009. Annual surveys by AIM and other organizations have found that wage growth has remained consistently at 3 percent throughout the steady if unspectacular job growth of the recovery.

Wages could become a particular issue in fast-growing states like Massachusetts where technology driven industries continue to face a shortage of qualified workers.

“Massachusetts continues to out-perform the nation as a whole economically, which is reflected in persistently higher readings for the Massachusetts Index compared to the U.S. Index,” said Alan Clayton-Matthews, professor at the School of Public Policy and Urban Affairs at Northeastern University, and another member of the AIM Board of Economic Advisors.

Our local economy is of course affected by national and global conditions, but its underlying strengths are keeping us competitive through ups and downs.”  

Topics: Massachusetts economy, Economy, Jobs

Confidence Remains Steady Despite Political Uncertainty

Posted by Andre Mayer on Nov 3, 2015 9:38:37 AM

The Associated Industries of Massachusetts Business Confidence edged off three-tenths of a point in October to 55.6 as employers across the commonwealth balanced weaker current conditions against expectations of improvement in the first half of 2016.

BCI.October.2015“This was the Index’s third consecutive monthly decline, but the big story here is what didn’t happen.   What didn’t happen is a sharp drop in business confidence due to political deadlock in Washington,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Nearly all our survey responses were in before the latest federal debt ceiling ‘crisis’ and the House speakership election were resolved, but these threats did not have the same impact as in the past. In the October 2013 debt ceiling standoff, for example, the Index fell 5.8 points to 46.7.”

Torto noted that U.S. economic growth slowed to 1.5 percent in the third quarter and the Massachusetts rate to 2.0 percent, both well down from the second quarter.

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.

Current Conditions Weaker, but Future Brighter   

The sub-indices based on selected questions or categories of respondent were mixed in October, with most moving only fractionally from September, while most were up year-over-year.

The Massachusetts Index, assessing business conditions within the commonwealth, lost six-tenths to 54.1, but was up eight-tenths from last October. The U.S. Index of national business conditions, at 50.9, was up three-tenths on both the month and the year.

“The fact that the national indicator actually rose in October is further evidence that the debt ceiling deadlock had little or no effect on confidence,” said Alan Clayton-Matthews, professor at the School of Public Policy and Urban Affairs at Northeastern University, a BEA member.

“Meanwhile, Massachusetts continues to out-perform the nation as a whole economically, which is reflected in persistently higher readings for the Massachusetts Index compared to the U.S. Index.  Our local economy is of course affected by national and global conditions, but its underlying strengths are keeping us competitive through ups and downs.” 

The Current Index, which assesses overall business conditions at the time of the survey, was off 1.8 points on the month at 54.9, while the Future Index, measuring expectations for six months out, added 1.2 to 56.2.

“Even as current conditions are seen to be weakening, with five declines in six months, employers expect modest improvement over the coming period,” Clayton-Matthews pointed out. “Again, it appears that neither negative current trends nor domestic and global uncertainties are undermining the foundations of business confidence.”  

Employment Poised for Upswing?

The three sub-indices bearing on survey respondents’ own operations were mixed but basically steady in October.

The Company Index, reflecting overall business conditions, was off a half-point at 57.6, the Sales Index edged up a half-point to 58.2; and the Employment Index also added a half to 55.2.

“Like our Current and Future indices, the employment responses reveal optimism,” said BEA member Fred Breimyer, regional economist at the FDIC. “Whereas 27 percent of respondents reported adding staff in the previous six months while 18 percent reduced employment, expectations for the next six months were much stronger – 32 percent hiring and only 7 percent downsizing.”

 

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

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