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Fidelity, Bright Horizons, WHOI Honored with 2017 AIM Vision Awards

Posted by Rick Lord on Mar 30, 2017 9:07:00 AM

Three organizations that have transformed Massachusetts by carving out preeminent places in their disciplines – Fidelity Investments, Bright Horizons Family Solutions and the Woods Hole Oceanographic Institution -  will be honored with 2017 Vision Awards by Associated Industries of Massachusetts.

The largest employer association in Massachusetts will present the Vision Awards at its Annual Meeting on May 5 in Boston. Accepting the awards on behalf of the honorees will be Abigail Johnson, Chairwoman and Chief Executive Officer of Fidelity Investments; Linda A. Mason, Co-Founder of Bright Horizons; and Mark Abbott, Director and President of Woods Hole Oceanographic Institution.

Governor Charles D. Baker will deliver the keynote address.

The Vision Award recognizes companies, organizations and individuals who have made unique contributions to the cause of economic opportunity in Massachusetts. The award reflects AIM’s mission to stand for jobs, economic prosperity, innovation and a government that acknowledges that the private sector has the unique responsibility to create the common wealth for the people of Massachusetts.

“The 4,000 member employers of Associated Industries of Massachusetts are delighted to honor three world-renowned organizations that have truly changed the way we live,” said AIM President and Chief Executive Officer Richard C. Lord.

“Fidelity Investments became a cornerstone of the financial industry by offering investment services to a broad set of customers from individual investors to advisors and large companies. Bright Horizons is the largest provider of employer-sponsored day care in the United States. And Woods Hole Oceanographic Institution remains both a global leader in ocean science and a key driver of the economy on Cape Cod.”

Johnson1.jpgFidelity Investments is the fourth largest investment firm in the world. With assets under administration of $6.0 trillion, including managed assets of $2.2 trillion as of February 28, 2017, the firm focuses on meeting the unique needs of a diverse set of customers: helping more than 26 million people invest their own life savings, 23,000 businesses manage employee-benefit programs, and providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money.

Founded in 1946 by Edward C. Johnson 2d, Fidelity was an early pioneer in the development of mutual funds. Fidelity was also innovator in many other areas throughout its history, including check writing for money market accounts, selling mutual funds over 800 number phone lines, the development of sector funds, the growth of the defined-contribution retirement savings industry, and using online and mobile technology to make investing quicker and easier for millions of customers.

The company has used innovation and an unrelenting focus on customer service to mold itself into a diversified financial services firm that is a leader in personal investing, workplace investing, and tools and services for financial intermediaries. Fidelity is now the nation's No. 1 record keeper of 401(k) retirement savings plans and is also the largest US online brokerage firm, with 17.9 million accounts and $1.7 trillion in client assets.  

Abigail Johnson became chief executive officer in 2014 and assumed the title of Chairman in December 2016. A recent Investor’s Business Daily article on Fidelity’s 2016 financial results praised the company’s ability to change: "Fidelity is profitable, strong, innovative and driven to growth," said Jim Lowell, editor-in-chief of Fidelity Investor, an independent newsletter. "That's not true for many financial services companies."

Mason1.jpgBright Horizons Family Solutions – Watertown-based Bright Horizons has forged a trusted global presence as an indispensable resource for employers and their workers seeking to address an increasingly complex array of work-life issues.

Linda Mason and her husband, Roger Brown, founded Bright Horizons with the goal of providing high quality child care at work sites. Together, they created a company with the mission to nurture each child’s unique qualities and potential, support families through strong partnerships, and collaborate with employers to build family-friendly workplaces.

Bright Horizons today operates more than 1,000 child-care centers in the U.S., the UK, Ireland, the Netherlands, India, and Canada. It also works with more than 1,000 employers to provide a complete family of employer solutions, including child care, back-up care for children and adults/elders, and educational advising for employees and their college-bound dependents.

And they do it well. Eighty organizations on Working Mother magazine’s "100 Best Companies" list are Bright Horizons clients. Bright Horizons itself has consistently been named to the "100 Best Companies to Work for in America" list by FORTUNE magazine and the Top Places to Work in Massachusetts by The Boston Globe.

Bright Horizons employs 2,100 people in Massachusetts and more than 20,000 worldwide. The company’s revenue jumped 8 percent during 2016 to $1.6 billion, while net income rose 1 percent to $95 million.

The company’s blue-chip client list reads like a who’s-who of global business leaders, from Allstate Insurance, Comcast NBC Universal and Booz Allen Hamilton to Sprint, Target, Discovery Communications, General Mills and Memorial Sloan Kettering Cancer Center.

Ms. Mason and Mr. Brown in 1988 also created an independent, nonprofit organization, Horizons for Homeless Children (formerly The Horizons Initiative) dedicated to providing high-quality child care and educational services to homeless children and their families.

Abbott1.jpgWoods Hole Oceanographic Institution (WHOI) is the world’s largest, private non-profit oceanographic research institution and a global leader in the study and exploration of the ocean. An unmatched reputation for intellectual discovery under the water has allowed the organization to contribute to its economic surroundings out of the water as well.

Woods Hole scientists and engineers have played a part in discoveries that form the modern understanding of the ocean and how it interacts with other parts of the planet, including human society. WHOI professionals combine access to specialized tools, ships, labs, and underwater vehicles with knowledge of how to explore the ocean to create a detailed understanding of the global ocean system.

The institution, founded in 1930, employs more than 1,000 researchers, engineers, information technology specialists, and crews for ships and underwater vehicles like the Alvin that famously explored the wreck of the Titanic in 1986. A combination of government grants and contracts, foundation and private donations and industry contracts provide the organization with an annual operating budget of $215 million.

Increasingly WHOI is involved in projects that apply the knowledge gained from basic research to societal issues, providing high-quality data and analysis across a range of topics, from climate to biodiversity to resources to natural hazards mitigation. These efforts have given WHOI’s work reach into new and important arenas.

In 2010, the Institution rapidly mobilized researchers from several different disciplines to assist the Coast Guard and other responders during the Deepwater Horizon oil spill. In response to the Fukushima disaster in March 2011, WHOI mounted another rapid response and mobilization to gather data and water samples quickly to determine the amount of radioactivity released into the ocean. That monitoring effort continues.

Engineers and scientists at WHOI worked for nearly two years to successfully locate, in May 2011, the deep-water wreckage of Air France flight 447, using the WHOI-designed and -built REMUS 6000 autonomous vehicle.

Topics: AIM Annual Meeting, Massachusetts economy, AIM Vision Award

Employer Confidence Hits 13-Year High

Posted by Christopher Geehern on Mar 7, 2017 8:45:12 AM

Confidence among Massachusetts employers hit a 13-year high during February, fueled by optimism among manufacturers and an increasingly positive view of the national economy.

BCI.February.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) rose 0.7 points to 62.1 last month, seven points higher than its level of a year earlier and the highest reading since August 2004. Driving the increase was the U.S. Index of national business conditions, which has risen 11.5 points during the past year, and the Manufacturing Index, which surged 9.1 points.

The results came amid increasingly mixed economic signals that included a 2.8 percent Massachusetts unemployment rate and a significant slowdown in economic growth both in Massachusetts and nationally during the fourth quarter.

“The increase in confidence was more modest than we have seen in previous months. Employers projected a generally positive view of the economy, but were also taking the measure of potential economic policy changes in Washington,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Employers remain more optimistic about the future than about the present - a good indicator of the potential for continued growth and investment both in Massachusetts and nationally.”

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.

Almost all of the sub-indices based on selected questions or categories of employer were up during February.
The notable exception was the Massachusetts Index, assessing business conditions within the commonwealth, which declined 0.2 points to 63.2. The state index nevertheless remained 6.8 points higher than in February 2016.

Meanwhile, the U.S. Index of national business conditions gained ground for the fifth consecutive month. Employers appear encouraged by the possibility that Congress and the new administration will pass growth measures that could include tax and regulatory reform.

February marked the 82nd 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, increased 0.5 points to 59.9 while the Future Index, measuring expectations for six months out, rose 1.1 points to 64.4. The future outlook was 8.5 points better than a year ago and higher than at any point since May of 2004.

The sub-indices bearing on survey respondents’ own operations were mixed.

The Company Index, reflecting overall business conditions, rose 0.9 points to 62.8 while the Employment Index gained two points to 60.4. The Sales Index lost 0.4 points to 62.6.

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 were stable – 37 percent hiring and only 10 percent downsizing.

Michael Tyler, Chief Investment Officer, Eastern Bank Wealth Management, and a BEA member, noted that the traditional confidence gaps between manufacturing companies and non-manufacturers, and between companies located in the eastern and western portions of Massachusetts, have closed in recent months.

“Confidence among Massachusetts manufacturers has risen 9.1 points during the past year and now stands at 61.2 compared to 63.0 for non-manufacturers. And confidence among companies in western and central Massachusetts hit 61.8 in February compared to 62.6 for companies in the eastern part of the state,” Tyler said.

"Those results suggest that the benefits of economic growth are finally spreading from Greater Boston to the entire state. What's more, as the dollar's rise has stabilized, manufacturers are finally sharing the positive view that service sector employers have felt for several years."

AIM President and CEO Richard C. Lord, also a BEA member, said the 2.8 percent unemployment rate in Massachusetts and the commonwealth’s designation last week as the best state in the nation by US News and World Report underscore the fact the Bay State economy remains strong.

At the same time, Lord said, employers face an uncertain mix of policy initiatives in Washington.

“Employers are certainly enthusiastic about lower corporate taxes, streamlined regulation and a meaningful infrastructure program. They are not as enthusiastic about withdrawing from trade agreements and once again having to process major changes in health reform,” he said.

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

Immigration Chaos Poses Unique Threat to Massachusetts Economy

Posted by Christopher Geehern on Feb 24, 2017 3:15:37 PM

The ongoing chaos surrounding US immigration policy poses a unique threat to the Massachusetts economy in its role as a global center for technology and medical science. Employers should be concerned.

FinancialServicesGraph-1.jpgThe Boston Globe published two compelling articles this week illustrating the vulnerability that knowledge-economy states like Massachusetts face amid potential travel bans, visa limitations and expedited removal proceedings.

The first article detailed how limits on H1B visas for skilled foreign workers hinder the growth of technology and other companies in Massachusetts. The Globe told the story of Brightcove, a high-flying video cloud services company and its fruitless attempts to obtain an H1B visa for a British software engineer who worked for 18 months to create the company’s new media delivery platform.

The H1-B program, as most employers know, is capped at 65,000 visas, with an additional 20,000 available to graduates of US universities with advanced degrees. Employers sought more than 236,000 H1B visas last year, so visas are awarded through a highly competitive lottery run by the US Citizenship and Immigration Services.

Technology companies fear that President Donald Trump, who has called the H1B a “cheap labor program,” may reduce the already strained visa cap.

The issue is an important one for Massachusetts. Brightcove employs 500 people and added 100 new employees last year, according to the Globe, but finds it increasingly difficult to attract skilled people in an economy running at 2.8 percent unemployment.

Brightcove ended up sending its key engineer back to England and creating a five-person product team overseas.

“If you want to go hire someone out of a top engineering school like MIT, by the time you get there, they’ve got five offers from big software companies that are many times larger than us,” Brightcove CEO David Mendels told the newspaper.

The second article reported that Massachusetts’ teaching hospitals are under intense pressure to reject qualified international medical students applying for residencies in the United States because of fears that President Trump’s immigration policies may bar the students from entering the country. Those fears escalated after an Iranian scientist who had obtained a visa to conduct research at Brigham and Women’s Hospital was twice prevented from entering the United States under President Trump’s initial immigration order.

Dr. Darrell G. Kirch, chief executive of the Association of American Medical Colleges, said “hospitals are being given an impossible choice” between hiring the best candidates, regardless of nationality, and ensuring they have residents ready to care for patients in July.

“This has served our country so well,” he said of the system used to funnel foreign medical graduates into the United States, “and it’s a tragedy that it’s being disrupted by uncertainty.”

Massachusetts has a significant stake in the issue not only because health care represents a significant contributor to the economy, but also because a shortage of primary care physicians put upward pressure on health-insurance premiums.

Both articles provide vivid reminders that the global industries upon which the Massachusetts economy is built are particularly sensitive to federal policy changes and budget decisions. And immigration issues will be child’s play compared to the potential fallout of changes to federal health care reform and Medicaid funding.

Should be an interesting spring.

Topics: Massachusetts economy, Donald Trump, Immigration

Massachusetts Exports Rise; Trade Policy Remains Unclear

Posted by Kristen Rupert on Feb 16, 2017 9:16:13 AM

Recently-released year-end 2016 trade statistics tell a positive story for Massachusetts.

Product exports from the commonwealth increased 2 percent last year, outperforming many other US states.  Massachusetts exports totaled nearly $26 Billion in 2016.

international.flagssmall.jpgAt the same time, the relationship with our top three trade partners—Canada, Mexico and China—is likely to change as a result of new trade policies sought by the Trump administration.  What might this mean for Massachusetts companies?

The new president and his executive team have committed to renegotiating long-standing trade relationships and agreements.  First in line is NAFTA—the trilateral North America Free Trade Agreement among the US, Canada and Mexico that took effect 23 years ago.

 Many experts agree that changes to NAFTA are long overdue.  However, there is concern that the Trump administration may abandon NAFTA altogether and pursue separate bilateral agreements—one with Canada and a separate one with Mexico.  This would create significant disruption for many companies with global supply chains across North America. 

The new Trump trade team is not yet installed, which will likely delay negotiations about NAFTA.  Advocates within the manufacturing community, however, are already gathering stories about how individual US companies have grown jobs as a result of business with Canada and Mexico.   Getting this data to Congressional leaders and the new presidential administration will be critical in persuading Trump trade professionals to tweak, and not eliminate, NAFTA. 

Another proposal in play is the border tax.  Imports would be taxed at a rate up to 20 percent.  A complementary plan to reduce the overall US corporate tax rate is being touted as a potential offset.  The border tax would mean that large importers such as Walmart and Target would suffer and likely pass along cost increases to customers, while big exporters—Caterpillar, GE, Boeing - would benefit.  Small companies dependent on components produced in China or Mexico would also be hard hit by an import tax.  As with all tax rate changes, we’ll see winners and losers. 

No China trade announcements have been made since President Trump was inaugurated.  His telephone call last week with China president Xi Jinping was a first step toward repairing the damage caused by Mr. Trump’s earlier denunciation of the US’ long-standing “one China” policy.  Mr. Trump had suggested imposing tariffs of up to 45 percent on imports from China, but that proposal has not yet gained traction.

In a promising development, Mr. Trump last week signaled his support for the US Export-Import Bank, which has been operating for more than a year without a board quorum and unable to approve loans of more than $10 million.  Mr. Trump’s statement represents a departure from his previous skepticism about Ex-Im Bank. The president may make a statement about Ex-Im during his visit to Boeing in South Carolina tomorrow. 

If you are one of the more than 10,000 exporting companies in Massachusetts and you have concerns, praise or questions about proposed federal trade policy, please let AIM know.  We are in regular communication with industry and government leaders and your insights are invaluable as we convey what’s important about trade and growing the Massachusetts economy. 

Topics: International Trade, Massachusetts economy, Donald Trump

Employer Confidence Rises for Fifth Consecutive Month

Posted by Christopher Geehern on Feb 7, 2017 8:42:41 AM

Confidence among Massachusetts employers rose for the fifth consecutive month during January despite a marked slowdown in economic growth during the fourth quarter of 2016.

BCI.January.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) rose one point to 61.4 last month, a full 5.6 points higher than a year earlier and the highest reading since December 2004. The confidence increase came during a month when the Massachusetts unemployment rate fell to 2.8 percent and Bay State employers created more than 72,000 new jobs for the year.

At the same time, national economic growth slowed to an annual rate of 1.9 percent during the final three months of 2016, while the Massachusetts economy downshifted to a 0.5 percent growth rate from 3.1 percent during the third quarter.

“The good news is that unemployment in Massachusetts remains well below the national rate of 4.7 percent, but that low jobless rate may also be creating labor-force capacity constraints that are slowing output,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Employer confidence seems to be tracking the overall optimism of financial markets that continue to hit record highs. It will be instructive to see how that enthusiasm holds up as Congress and the new administration get down to the business of governing.”

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.

Constituent Indicators Uniformly Higher

All of the sub-indices based on selected questions or categories of employer were up to start 2017.

The Massachusetts Index, assessing business conditions within the commonwealth, rose to 61.8, leaving it 5.2 points ahead of the same time last year.

The U.S. Index of national business conditions inched up 0.1 points to 57.6 - 7.5 points higher than in January 2016. January marked the 81st 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, increased 0.3 points to 59.4 while the Future Index, measuring expectations for six months out, rose 1.6 points to 63.3. The future outlook was 6.1 points better than a year ago and higher than at any point since March 2015.

Operational Views Strengthen

The sub-indices bearing on survey respondents’ own operations also strengthened.

The Company Index, reflecting overall business conditions, rose one point to 61.9 while the Employment Index gained 1.2 points to 58.4 and the Sales Index 0.7 points to 62.1.

The AIM survey found that nearly 39 percent of respondents reported adding staff during the past six months while 18 percent reduced employment. Expectations for the next six months were stable – 37 percent hiring and only 10 percent downsizing.

“One of the elements driving the overall increase in employer confidence is a rapidly brightening outlook among manufacturers,” said Katherine A. Kiel, Ph.D., Professor of Economics, College of the Holy Cross in Worcester and a BEA member.

“The AIM Manufacturing Index has risen 8.5 points during the past five months, driven by a positive outlook on sales and hiring. Manufacturing optimism also bodes well for capital investment and research and development going forward.”

Companies in the eastern part of the Massachusetts were more optimistic at 63.0 than those in the western part of the state at 59.0.

AIM President and CEO Richard C. Lord, also a BEA member, said the emerging labor-force constraints underscore the importance of maintaining a world-class training and education system in Massachusetts. He noted that in the area of manufacturing, AIM has filed legislation to provide a 50 percent tax credit for eligible expenses for employees who receive certification through the Massachusetts Manufacturing Advancement Center Workforce Innovation Collaborative’ s (MACWIC) Applied Manufacturing Technology Pathway Certification Program.

“As employers find it increasingly difficult to locate appropriately skilled employees, we are reminded that our economic future depends upon the ability of Massachusetts to educate all children and all incumbent workers with the knowledge our companies need to prosper in a complex global economy,” Lord said.

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Business Leaders Share Outlook for 2017

Posted by Christopher Geehern on Jan 23, 2017 10:10:11 AM

What lies ahead for Massachusetts employers as a new administration comes to Washington in 2017? Listen as three distinguished business leaders - Robert Reynolds, President and Chief Executive Officer of Putnam Investments in Boston; Donna Cupelo, region president of Verizon in New England; and Lisa Chamberlain, managing partner of The Chamberlain Group in Great Barrington – share their opinions as part of the AIM Economic Outlook Forum. Moderator is Jeff Brown, Business Editor of WBZ Radio in Boston.

Topics: Massachusetts economy, Massachusetts employers, AIM Executive Forum

IBM Watson Health Redefines Boundaries of Health, Information Technology

Posted by Christopher Geehern on Jan 20, 2017 2:24:55 PM

Associated Industries of Massachusetts President Richard C. Lord used his annual State of Massachusetts Business Speech this morning to highlight IBM Watson Health in Cambridge as emblematic of the commonwealth's growing economy.

IBM Watson Health is prospering by exploring the still unknown boundaries between health care and information technology. The company seeks nothing less than to redefine the relationship between technology and humanity in a manner that improves the quality of medical care for all of us. IBM Watson Health could have located anywhere, but decided to establish its operations and hundreds of employees in Kendall Square, Cambridge, the epicenter of the global biosciences and software industries.

The idea behind IBM Watson Health is to use cognitive computer systems that understand, reason and learn to make sense of the estimated 80 percent of health data that is currently invisible to computer systems because it is unstructured.

Topics: Massachusetts economy, Technology, State of Massachusetts Business Address

State of Massachusetts Business - The Age of Uncertainty

Posted by Christopher Geehern on Jan 20, 2017 10:47:52 AM

The success of diverse Massachusetts companies like VIBRAM and IBM Watson Health underscores the need for employers to engage in public policy debates, Associated Industries of Massachusetts President Richard C. Lord said Friday.

Lord used his annual State of Massachusetts Business address to more than 350 business leaders to call for call upon elected officials and all involved in public policy to set aside polemics and engage instead in civil debate on behalf of the large number of Americans who clearly feel restive, uneasy and suspicious of institutions like government and business.    

“Let us resolve to talk with each other, not at each other. Let us resolve to speak in full sentences, not 140-character missives that reduce to two dimensions the complex issues with which we must wrestle,” Lord said just hours before Donald J. Trump took the oath of office as the 45th president of the United States.

“Let us seek bipartisan consensus rather than intractable fiscal cliffs and government by inaction. Let us make hope and hard work our watchwords and not allow cynicism to leave undone the important work of business and government.”

Lord warned that conservative administrations in Washington often prompt progressives in Massachusetts to make the commonwealth an example of big government, higher taxes, inefficient regulation and fiscal instability. Employers are already on the defensive, he said, having barely held off scores of expensive social-engineering bills ranging from a ban on non-compete agreements to the creation of a state-run pension system for private-sector workers.

The first step for business, according to Mr. Lord, is to articulate a positive agenda for economic growth. He noted that AIM is attempting to do that through its Blueprint for the Next Century, which makes four primary recommendations to create economic growth and opportunity for the people of Massachusetts:

  • Government and business must develop the best system in the world for educating and training workers with the skills to allow Massachusetts companies to succeed in the global economy.
  • Massachusetts must create a uniformly competitive economic structure, including an efficient transportation infrastructure, across all industries, geographic regions and populations.
  • Establish a world-class state regulatory system that meets the highest standards for efficiency, predictability, transparency, and responsiveness.
  • Massachusetts must find a way to moderate the substantial burden that health care and energy costs place on business growth.

A panel of business leaders responded to Lord’s speech and underscored the sense of uncertainty surrounding the transfer of power in Washington.

Robert Reynolds, Chairman and Chief Executive Officer of Putnam Investments, expressed optimism that the new Trump Administration and Republican Congress will accelerate economic growth and move away from the monetary approach that has dominated US economic policy.

“They already have so-called shovel ready plans,” on taxes, replacement of federal health reform and other issues, Reynolds said.

Donna Cupelo, New England Regional President of Verizon, said that a national technology sector that did not strongly support Trump is now “getting its boots back on” to address issues such as infrastructure, taxes and work-force development.

Lisa Chamberlain, Managing Partner of The Chamberlain Group in Great Barrington, said the potential repeal of the Affordable Care Act’s tax on medical-device companies is good news for her company’s customers, but repeal also creates uncertainty for small employers like herself.

“The instability of the present moment brings me some concerns and it concerns some of my neighbors,” she said.

Topics: Associated Industries of Massachusetts, Massachusetts economy, Donald Trump

Business Confidence Hits 12-Year High

Posted by Christopher Geehern on Jan 3, 2017 7:30:00 AM

Confidence among Massachusetts employers hit its highest level in 12 years during December amid the prospect of growth initiatives from the new administration in Washington and a continued strong state economy.

BCI.December.2016.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) rose 2.3 points to 60.4 last month, a full 5.1 points higher than its level in December 2015 and the highest reading since December 2004. It marked the fourth consecutive monthly increase in sentiment among employers in a commonwealth where the unemployment rate recently fell to 2.9 percent.

The November and December BCI readings mirror the post-election rally in U.S. financial markets, which have risen five percent as President-Elect Donald Trump prepares to work with a Republican Congress on business-friendly issues as tax reductions, regulatory reform and infrastructure spending. The AIM survey showed a 5.5-point jump in confidence in the national economy last month, leaving that indicator at its highest level since 2007.

“Massachusetts employers are taking the president-elect at his word that he will prioritize economic growth at the national level, especially if he is able to work with Congressional Democrats on a $1 trillion infrastructure initiative,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“But employer enthusiasm is also based upon a solid economic expansion during 2016 that most analysts believe will continue in a methodical manner though the first half of 2017.”

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.

Constituent Indicators Mostly Higher

Almost all of the sub-indices based on selected questions or categories of employer were up in December.

The Massachusetts Index, assessing business conditions within the commonwealth, gained 2 points to 61.8, leaving it 5.5 points ahead of the same time last year.

The increase in the U.S. Index of national business conditions put that figure 7.5 points higher than its level of a year ago, but still short of the Massachusetts index. It marked the 80th 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, increased 2.2 points to 59.1 while the Future Index, measuring expectations for six months out, rose 2.5 points to 61.7. The future outlook was 5.5 points better than a year ago and higher than at any point since March 2015.

Operational Views Strengthen

The sub-indices bearing on survey respondents’ own operations also strengthened considerably.

The Company Index, reflecting overall business conditions, rose 1.4 points to 60.9 while the Sales Index increased 3.2 points to 61.4. The Employment Index was the only indicator to lose ground, falling 0.2 points to 57.2.

The AIM survey found that nearly 38 percent of respondents reported adding staff during the past six months while 19 percent reduced employment. Expectations for the next six months were stable – 37 percent hiring and only 10 percent downsizing.

“One of the most positive results of the December survey is that business confidence is strengthening uniformly across almost every sector of the economy,” said Elliot Winer, Chief Economist, Winer Economic Consulting and a BEA member.

“Employers both large and small, manufacturers and non-manufacturers, from the Pioneer Valley to Great Boston are more optimistic about their prospects than at any time since prior to the Great Recession.”

The BCI Manufacturing Index jumped 0.6 points during the month and 2.6 points for the year. The overall Business Confidence Index among non-manufacturers was 63.3 compared to 56.7 for manufacturing companies.

Companies in the eastern part of the Massachusetts were slightly more optimistic at 61.4 than those in the western part of the state at 57.6.

AIM President and CEO Richard C. Lord, also a BEA member, said employers appear to be encouraged by the prospect that President-Elect Donald Trump and a Republican Congress will be able to pass their tax and regulatory agenda.

At the same time, Lord said, there remains uncertainty about a possible repeal of federal health Care reform and the future of international trade agreements that are critical to Massachusetts companies.

“The only certainty appears to be uncertainty for the next six months,” Lord said.

“The key will be to ensure that any tax reductions and regulatory reforms made on the national level are not obviated by state measures intended to make Massachusetts a progressive ‘model’ for the rest of the country.”

Topics: AIM Business Confidence Index, Massachusetts economy, Donald Trump

GE Tops 2017 Massachusetts Business Stories

Posted by Christopher Geehern on Dec 21, 2016 10:40:03 AM

It didn’t take long for 2016 to become a year of watershed events for the Massachusetts employer community.

GE.Boston.jpgThe year wasn’t two weeks old when General Electric Company announced plans to move its corporate headquarters and other operations from suburban Connecticut to the heart of Boston’s seaport Innovation District. The stunning GE announcement kicked off a year that eventually saw an iconoclastic real estate developer pull the upset of the century to win the presidency; Massachusetts become one of the first states in the nation to pass a wage-equity law; and the state economy post its lowest unemployment rate since January 2001.

Here are the top 10 Massachusetts business stories of 2017:

  1. General Electric announces plans to move its corporate headquarters and 800 high-paying jobs to Boston. The move electrified the Bay State economy as GE maintained that Boston was a logical location for a company seeking to marry manufacturing with advanced technology. “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,” said Chairman and Chief Executive Officer Jeffrey Immelt.

  2. Donald J. Trump is elected President of the United States on a platform of lowering business taxes, repealing federal health-care reform, boosting infrastructure spending and reworking trade agreements. The most unconventional and vitriolic election in US history ended at 3 am on November 9 as Trump rode a populist wave of economic disaffection and upset Democrat Hillary Clinton. Republicans also maintained control of both houses of Congress, raising the probability that the new president will make good on many of his campaign promises.

  3. Unemployment in Massachusetts drops to a 15-year low of 2.9 percent. The jobless rate ended the year with five consecutive monthly declines as employers created 67,200 jobs from January through November. The largest private sector percentage job gains were in Construction; Professional, Scientific and Business Services; Education and Health Services; and Leisure and Hospitality. Since the rate peaked at 8.8 percent in September 2009, there are now 332,700 more residents employed and 198,700 fewer residents unemployed as the labor force increased by 134,100.

  4. Massachusetts passes a balanced wage-equity law. Governor Charlie Baker signed a compromise wage-equity measure on August 1 designed to ensure that workers are fairly compensated without regard to gender, and according to the value they bring to the business enterprise. The compromise followed months of negotiations between AIM, House Speaker Robert DeLeo and Attorney General Maura Healey. The legislation explicitly recognizes legitimate market forces such as performance and the competitive landscape for certain skills that cause pay differences among employees.
     
  5. Judge Amos Mazzant of the Eastern District of Texas puts a last-minute hold on new federal overtime regulations a week before they are due to take effect on December 1. The injunction put Massachusetts employers in the difficult position of either undoing the changes they had made to comply with the regulations or leaving those changes and associated costs in place. The new regulations would have raised the threshold for exemption from overtime to $913.00 per week, or $47,476.00 per year. The rules face an uncertain future under the Trump administration.

  6. Massachusetts voters legalize recreational marijuana over the objections of employers high-profile elected officials. The vote on the statewide ballot question 6 percent to 46.4 percent. AIM opposed the measure because of its potential to reverse decades of hard-won progress by employers to create safe and drug-free workplaces. AIM maintained that the new law would place employers in the untenable position of determining whether an employee who tests positive for marijuana, used legally under state law, is too impaired to operate a machine or drive a company vehicle safely.

  7. Health-insurance premium costs accelerate after several years of modest increases. Total health care spending in Massachusetts in 2015 was $57.4 billion, a 4.1 percent increase over 2014 that surpassed the state's official cost growth benchmark of 3.6 percent, according to the Center for Health Information and Analysis (CHIA). Spending on MassHealth was up 4.6 percent, and spending on commercial health insurance and Medicare were both up 5.3 percent last year, according to CHIA. And the net cost of private health insurance was up 12.6 percent in 2015. Prescription drug spending of about $8.1 billion last year (an increase of 10.2 percent over the previous year)  was one of the factors driving up health care costs, accounting for about 36 percent of the overall growth last year, CHIA reported.

  8. The Massachusetts Legislature declines to restrict the use of non-compete agreements as the state Senate rejects a compromise reached between House Speaker Robert DeLeo and the business community. The breakdown of negotiations brought a stunning, if temporary, end to a contentious effort by venture capitalists to do away with current law governing non-competes. The House bill would have limited the duration of non-competes to one year and required employers who did not compensate workers at the time they signed a non-compete to pay 50 percent of the worker’s salary during the non-compete period.

  9. Lawmakers expand the scope of solar-energy subsidies, effectively imposing an $8 billion tax on electric ratepayers and putting that money into the pockets of solar-energy developers. The bill, passed in March, raised the cap on net metering – the process by which solar developers sell excess electricity back to the power grid – by 60 percent for private projects and 75 percent for public projects. The primary reform contained in the measure would lower the net metering credit to 60 percent of the retail rate, but that reduction would not apply to facilities owned by municipalities and government entities.

  10. Former Associated Industries of Massachusetts President John Gould dies at 86. Gould, a passionate advocate for business and education who built AIM into the predominant employer association in Massachusetts, passed away in July. He became chief executive of AIM in 1988 and guided its transformation from a manufacturing association to one representing the interests of employers from all sectors of the economy. He also made AIM a pivotal voice on a series of issues ranging from workers compensation reform to taxation to the development of education standards for the commonwealth.

Topics: Massachusetts economy, Massachusetts employers, Top 10

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