Massachusetts employers began 2011 with a dose of measured optimism that pushed the Associated Industries of Massachusetts Business Confidence Index (BCI) up 2.8 points in January to 55.2.
The increase left the BCI in positive territory for a fourth consecutive month after a slump in the third quarter of 2010. Employer confidence now rests more than 20 points above the historic low of 33.3 posted at the height of the financial crisis in February 2009.
“Four consecutive months in the positive range, above 50 on the Index’s 100-point scale, points to cautious but real optimism about the economy and business climate,” said Raymond G. Torto, Global Chief Economist at CB Richard Ellis Group, Inc. and Chair of AIM's Board of Economic Advisors (BEA).
“The January survey results show that Massachusetts employers are regaining confidence in state and national economic conditions, and expect further improvement over the next six months.”
Fifty-three percent of employers who responded to the monthly BCI survey said they expect “continued slow, halting growth” while 41 percent foresee robust or accelerating economic growth and 6 percent ‘deteriorating conditions.’ Torto said the balance is towards the positive side amid signs that we may be approaching the end of the jobless phase of the recovery.
AIM’s Business Confidence Index has been issued monthly since July 1991. The January reading was up 9.4 from a year earlier, 18.5 over two years, and 4.6 compared to January 2008, the first month of “official” national recession.
Most components of the BCI gained ground in January along with the main Index. The Current Index of conditions prevailing at the time of the survey was up 1.1 points at 52.4, while the Future Index of expected conditions six months ahead surged 5.1 to 58.3.
“The Current Index is holding above 50, about 10 points better than a year ago, but the improvement in the Future Index is more significant,” commented BEA member Michael Goodman, chair of the Department of Public Policy at the University of Massachusetts Dartmouth. “We have not seen Massachusetts employers this optimistic about immediate future prospects in almost four years.”