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Strong Economy Boosts Business Confidence

Posted by Christopher Geehern on Sep 11, 2018 5:10:00 AM

Massachusetts employers were equally confident about the national and state economies during August, breaking an eight-and-a-half-year run in which they were more bullish about the commonwealth than the nation as a whole.

BCI.August.2018The brightening view of the US economy boosted overall business confidence as employers headed for the end of the third quarter.

The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 2 points to 63.2 last month after tumbling more than five points during June and July. The gain left the BCI two points higher than a year ago, comfortably within optimistic territory.

Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design, said the last time employers were more optimistic about the national economy than the state was during the nadir of the Great Recession in May 2009 when the AIM BCI Massachusetts Index was 33.1 and the US Index was 34.4.

“The confluence of opinion reflects gathering optimism about the US economy rather than any weakness in the Massachusetts business climate. The Massachusetts Index rose 1.5 points during the year, but the US Index soared 4.5 points during that same period,” Torto said.

The optimism about national prospects came despite persistent concerns about rising production costs generated by tariffs and other factors.

“Steel tariffs are causing major cost escalation on goods and equipment ordered for installations. Freight costs are also rising rapidly. Many manufacturers of our equipment orders are refusing to quote freight until day of shipment and will not even give estimate of freight costs,” wrote one BCI participant.

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

The constituent indicators that make up the overall Business Confidence Index were largely higher during August.

The Company Index measuring employer assessments of their own operations rose 2.4 points to 62.1, up 1.2 points from August 2017. The Employment Index gained 2.4 points to end the month at 57.0 while the Sales Index lost 0.8 points to 61.0.

The Current Index, which assesses overall business conditions at the time of the survey, rose 2.5 points to 66.1, leaving it 4.8 points higher than the year earlier. The Future Index, measuring expectations for six months out, rose 1.5 points during August, but remained down 1.0 point for the year.

Non-manufacturing companies (63.6) were slightly more optimistic than manufacturers (62.8). Companies in the eastern part of Massachusetts (65.2) were more bullish than those in the west (60.8).

“All of these numbers are well within optimistic range and reflect the views of employers operating in a state economy that grew at a 7.3 percent annual rate during the second quarter. The acceleration in economic growth underscored strong gains in employment, earnings, and consumer and business spending,” said Elliot Winer, Chief Economist, Winer Economic Consulting, LLC, and a BEA member.

“Underlying economic strength is, for the moment, overshadowing a somewhat unpredictable public policy environment.”

Historically strong economy

AIM President and CEO Richard C. Lord, also BEA member, agreed that employers are driving a Massachusetts economy that remains historically strong.

“The state unemployment rate remains at 3.5 percent, wage and salary income surged 19.2 percent during the second quarter and economic output has accelerated,” Lord said. 

He cautioned, however, that the escalating series of tariffs and retaliatory tariffs among the US and its trading partners are starting to take a toll on Massachusetts employers.

“The thousands of member employers of Associated Industries of Massachusetts (AIM) are increasingly concerned about the negative effect of current and proposed tariffs on Massachusetts companies. Particularly alarming are tariffs on raw materials, components and finished goods coming from China,” Lord said.

“While we concur with the need to address China’s unfair trade practices, we do not believe that tariffs are the best strategy. Tariffs are already hurting our companies here in Massachusetts and additional damage is anticipated, by business owners and leaders.”

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Employer Confidence Weakens in June

Posted by Christopher Geehern on Jul 3, 2018 9:21:05 AM

Confidence among Massachusetts employers weakened considerably during June as tariffs, rising raw-material costs and approval of paid family and medical leave in the Bay State raised concerns about business growth.

BCI.June.2018The Associated Industries of Massachusetts Business Confidence Index (BCI) dropped 5.3 points to 61.3 last month, its lowest level since August 2017. Confidence remains well within the optimistic range, but the June decline left the BCI slightly below its level of a year ago.

Though analysts say the volatility in business confidence during May and June may reflect some statistical anomalies, the comments provided by employers on the monthly AIM survey suggest that companies are becoming increasingly concerned about a perfect storm of issues on the federal and state levels.

“EMAC (employer MassHealth assessment) and paid sick time are going to put me out of business if something doesn’t change quickly,” wrote one employer.

Another wrote: “A trade war with China is going to cost jobs, not add them.”

“It is certainly significant that the AIM Business Confidence Index is lower than it was in June 2017. It is also significant that many of the individual indicators that make up the overall index - ranging from employer hiring plans to their views of the Massachusetts economy – are also lower than they were a year ago,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design. “It will be interesting to see how confidence changes during the summer as Massachusetts continues to operate at virtually full capacity.”

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

The constituent indicators that make up the overall Business Confidence Index all lost ground during June.

The Massachusetts Index assessing business conditions within the commonwealth fell 7.2 points to 62.8, leaving it 1.4 points lower than in June 2017.

The U.S. Index ended the month at 60.0, down 9.3 points for the month but 2.6 points better than a year ago.
June marked the 100th 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, declined 2.6 points to 63.5. The Future Index, measuring expectations for six months out, fell 7.5 points to 59.1. The Current Index gained 1.6 points during the year while the Future Index lost 2.6 points.

Employer views of their own companies also weakened.

The Company Index declined 3.3 points to 61.2, down 1.2 points for 12 months. The Employment Index ended the month at 55.0, a 3.3-point decrease for the month and 3.1 points lower than a year ago. The Sales Index lost 2.9 points for the month and 0.2 points for the year.

Manufacturing companies (62.5) were slightly more optimistic than non-manufacturers (60.2). Companies in the eastern part of Massachusetts (63.3) were more bullish than those in the west (58.7).

“It’s interesting to note that medium and small companies remain significantly more optimistic than larger companies, reversing the typical pattern,” said Edward H. Pendergast, Managing Director, Dunn Rush & Co. “Entrepreneurial companies continue to drive growth here in Massachusetts.”

The BCI decrease came a month after the Mass Insight index of consumer confidence in Massachusetts suffered its biggest quarterly decline in years, from 134 in February to 121 in May. The index remined in optimistic territory, but fell below a comparable index for national consumer confidence for the first time since 2014.

Mixed Signals

AIM President and CEO Richard C. Lord, also BEA member, said employers are feeling threats from all directions.

“Member employers are deeply concerned about a potential trade war with China and with key US trading partners such as Canada, Mexico and the European Union,” Lord said.

“At the same time, the Legislature last week passed a ‘grand bargain’ that will create a family- and medical-leave requirement and increase the state minimum wage from $11 per hour to $15 per hour. Those requirements, on top of the MassHealth assessment and other elements, continue to challenge employers.”

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Economic Development Chief Staying Busy

Posted by Christopher Geehern on Mar 23, 2018 12:22:16 PM

Jay Ash acknowledges that it’s a great time to be Secretary of Housing and Economic Development in Massachusetts.

Ash.jpg“I am getting a call a week from a company talking to me, not about bringing 100 or 200 or 500 jobs, but 1,000, 5,000 or 10,000 jobs,” Ash told 300 business leaders during a presentation to the AIM Executive Forum this morning.

Ash has recently played a key role in the recruitment or expansion in Massachusetts of major employers ranging from Amazon, General Electric and MassMutual to IBM Watson Health, Kronos and Siemens. These expansions promise thousands of high-quality new jobs for Massachusetts residents while cementing the state’s reputation as a global center of innovation and growth.

“What an unbelievable time to be involved in economic development, and what an unbelievable time to be involved in a great state like Massachusetts,” he said.

Ash, an avuncular Democrat who has overseen economic development for the Baker Administration during its first three years, said Massachusetts benefits from a uniquely bipartisan approach to issues affecting the economy. He noted that the economic development bill announced by the Republican governor just two weeks ago has already been scheduled for a hearing Tuesday by the Democratically controlled Legislature.

The bill would commit $100 million to regionally significant economic development projects throughout the commonwealth, establish an apprenticeship tax credit, double grants to community colleges and vocations high schools to purchase equipment and establish a permanent sales-tax holiday.

Ash said the administration is pursuing its economic agenda in tandem with efforts to expand the availability of housing and to address persistent educational achievement and funding gaps. He thanked Associated Industries of Massachusetts for efforts to streamline the process used by communities to permit both low-income and market-rate housing.

 “There’s reason to be optimistic. Let’s roll up our sleeves because the best jobs done are the one we do ourselves.

Topics: Economic Development, Economy, AIM Executive Forum

Employer Confidence Dips; Overall View Remains Optimistic

Posted by Christopher Geehern on Sep 5, 2017 7:30:00 AM

Massachusetts employer confidence edged lower for the second consecutive month during August, but remained comfortably in optimistic territory.

BCI.August.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) shed 0.3 points to 61.2 last month, leaving it 7.1 points higher than a year ago. The Index has been essentially flat since April and now stands 0.2 points lower than at the beginning of 2017.

Last month’s slip reflected offsetting trends in employer attitudes about conditions inside and outside their walls. Employers grew less bullish about their own companies during the month, but showed growing optimism about the national economy and about prospects for manufacturers.

“Employer confidence continues to move in a narrow range defined by broad optimism about both the state and national economies,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“The steady level of confidence readings above the 60 mark reflect a state economy that grew at a 4 percent annual rate during the second quarter while maintaining a steady level of employment growth.”

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 August.

The Massachusetts Index, assessing business conditions within the commonwealth, remained unchanged at 63.2, still 6.3 points higher than in August 2016.

The U.S. Index of national business conditions rose 2.3 points to 60.2 amid strong signs of job expansion nationally. The US Index has risen 10.6 points during the past year, more than any other element of the overall Business Confidence Index.

Still, August marked the 89th 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, edged up 0.1 points points to 61.3 while the Future Index, measuring expectations for six months out, dropped 0.6 points to 61.2. The Future Index ended the month 6.3 points higher than a year ago.

The Company Index, reflecting overall business conditions, lost 1.3 points to 60.9. The employment Index surged 2.3 points to 58.0 after losing ground during July.

Executives at manufacturing companies and those at non-manufacturing enterprises maintained almost identical confidence readings – 61.1 for manufacturers, 61.3 for non-manufacturers. The AIM Manufacturing Index has surged 9.9 points during the past year.

“Manufacturers in Massachusetts remain optimistic even though national economic signals for that sector remain mixed. The Institute for Supply Management manufacturing index was strong August, but the IHS Markit US Manufacturing PMI showed manufacturing expanding at its slowest pace since June 2016,” said Edward H. Pendergast, Managing Director of Dunn Rush & Co. in Boston and a BEA member.

Confidence was also remarkably consistent across all geographic regions of the commonwealth. Eastern Massachusetts companies posted a 61.3 reading during August versus 61.1 for companies in western Massachusetts.

AIM President and CEO Richard C. Lord, a BEA member, noted that a significant number of employers who responded to the August survey expressed frustration with the new $200 million health-insurance surcharge and the proliferation of complex and expensive employment laws.

“Amid a generally strong economy, employers feel under siege from a government and an electorate that seem willing to impose crushing financial burdens on job creators in the name of social progress,” Lord said.

“Employers are telling us that additional measures that may be headed to the statewide ballot – paid family leave, a $15 minimum wage and a punitive surtax on incomes of more than $1 million – may force them to relocate.”

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Business Confidence Retreats After Seven-Month Rally

Posted by Christopher Geehern on May 2, 2017 9:46:20 AM

Massachusetts employers hit the pause button on a seven-month rally in business confidence during April, but their outlook remained solidly optimistic in the face of mixed political and economic signals.

BCI.April.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) lost 2.2 points to 60.2 last month, 4.0 points higher than its level of a year earlier. Every constituent element of the confidence index lost ground after reaching a 13-year high during March.

The results came as the Massachusetts economy contracted at a 0.5 percent annual rate during the first quarter and the state unemployment rate rose to 3.6 percent.

“We should not be surprised to see confidence readings correct slightly after advancing six points since September,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“It bears watching to determine whether the broad April decline becomes a trend as we move into the summer.”

Analysts believe the numbers may reflect growing concern among employers about the ability of the Trump Administration to deliver the many pro-growth policies it promised during the campaign.

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.

Employers grew less confident about both the overall economy and their own operations during April.

The Massachusetts Index, assessing business conditions within the commonwealth, lost 0.4 points to 63.3, leaving it 6 points higher than in April 2016.

The U.S. Index of national business conditions shed 2.7 points after gaining ground for the previous sixth months. April marked the 85th 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, declined 1.9 points to 59.9 while the Future Index, measuring expectations for six months out, dropped 2.5 points to 60.5. The future outlook remained 3.2 points higher than a year ago.

The Company Index, reflecting overall business conditions, fell 2.6 points to 60.2. The Employment Index fell 2.8 points to 56.2, and the Sales Index declined 2.1 points to 60.5.

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.

Barry Bluestone, Stearns Trustee Professor of Political Economy at Northeastern University and a BEA member, noted that the Massachusetts economy is running up against tightness in the labor market that makes it difficult for employers to grow.

“The combination of a prolonged economic recovery and the demographics of skilled workers retiring with no one to replace them is creating an impediment to growth for Massachusetts employers. The shortage underscores once again the importance of creating an education and training system that responds to the demands of the economy,” Bluestone said.

The April survey also reversed an unusual result in March when Western Massachusetts companies were more confident than those in the eastern portion of the commonwealth. Eastern Massachusetts employers posted a 61.7 confidence reading in April versus 58 for employers in the western part of the state.

AIM President and CEO Richard C. Lord, also a BEA member, said employer confidence is also facing headwinds from accelerating health-care and health-insurance costs. Massachusetts has exceeded its objective for health-care spending in each of the past two years and employers continue to pay some of the highest costs in the nation.

“The good news is that Massachusetts is beginning to identify some answers. And there appears to be enough common ground and political will on the issue to pursue some solutions,” Lord said.

“New research conducted by the Massachusetts Health Policy Commission suggests that Massachusetts employers, insurers and policymakers could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making several key improvements to the health-care system.”

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

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

Employer Confidence Rebounds in September

Posted by Christopher Geehern on Oct 4, 2016 9:17:07 AM

Business confidence broke a three-month slide during September as Massachusetts employers, particularly in the service sector, discovered newfound optimism in their own business operations.

BCI.September.2016.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) rose 1.8 points to 55.9 last month, the same level recorded 12 months earlier. The increase was driven by a 3.1-point surge in the Company Index, which reflects overall business conditions at employer companies, and similar jumps in readings based on employment and sales.

The uptick came as the Federal Reserve continued to suggest that the economy is strong enough to raise interest rates before the end of the year.

“Employers remain ambivalent about both the U.S. and national economies ahead of the presidential election, but companies clearly have regained a sense of buoyancy about their own futures,” said Michael A. Tyler, CFA, Chief Investment Officer, Eastern Bank Wealth Management and a member of AIM's Board of Economic Advisors (BEA).

“Large increases in the sales and employment indexes bode well for a Massachusetts economy that already enjoys a 3.9 percent unemployment rate.”

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 Mixed

The sub-indices based on selected questions or categories of employer were mixed during September.

The Massachusetts Index, assessing business conditions within the commonwealth, shed 0.3 points during the month, but gained 2.3 points over the year to 57.0. The U.S. Index of national business conditions remained slightly pessimistic, dropping 0.4 points to 49.2, 1.4 points lower than its level of a year ago.

Employers have been more optimistic about the Massachusetts economy than about the national economy for 77 consecutive months.

The Current Index, which assesses overall business conditions at the time of the survey, increased 2.3 points to 55.7 while the Future Index, measuring expectations for six months out, rose 1.1 points to 56.0. The future view is a point higher than it was in September 2015.

Operational Views Strengthen

The 3.1-point increase in the Company Index reflected a surge of 3.8 points in the Sales Index to 58.1 and a 1.9-point jump in the Employment Index to 54.5. 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 – 38 percent hiring and only 10 percent downsizing.

Non-manufacturing companies maintain a significantly brighter outlook than manufacturers. The overall Business Confidence Index among non-manufacturers was 61.1 compared to 50.9 for manufacturing companies.

“The uptick in employer assessments of their own prospects comes as welcome news following three consecutive months of declines. At the same time, manufacturers continue to struggle with economic weakness in key export markets,” said Paul Bolger, President, Massachusetts Capital Resource Company and a BEA member.

The Economy and the Election

AIM’s President and CEO Richard C. Lord, also a BEA member, said the 2016 presidential election has become a referendum on the degree to which the economic recovery is benefitting middle-income Americans.

“Peter Canellos, Executive Editor of Politico, told the AIM Executive Forum on September 16 that the legacy of the 2016 campaign will be an ongoing debate about the economic future of blue-collar, middle-class workers who have not felt the benefits of the recovery. It is incumbent upon all of us to create an economic that encourages the development of jobs across all sectors to train people effectively for those jobs,” Lord said.

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Politico Editor: 2016 Election Highlights Blue-Collar Concerns

Posted by Christopher Geehern on Sep 16, 2016 2:18:05 PM

Donald Trump has more social-media followers than the number of votes normally needed to be elected president of the United States.


It’s a statistic that Peter Canellos, Managing Editor of Politico, says helps to explain why the media coverage of the 2016 presidential election, and the election itself, is different from any other in history.

“These changes are themselves a major factor in the 2016 presidential campaign,” Canellos told more than 250 business leaders at the AIM Executive Forum this morning.

“We can’t establish the political dialog, as we did in the past, but we cannot ignore it.”

Recalling his work covering the 2002 presidential race when he was often the only reporter present when Bill Clinton and other candidates spoke, Canellos said that every word a candidate says today is recorded on a dozen iPhones, often held by representatives of the opposing campaigns, and posted online before any formal media outlet can post the story.

“Even if a news organization tries to exercise restraint, or tries to make decision about the news, the conversation is already galloping ahead without them,” said Canellos, who spent 26 years at the The Boston Globe before moving to Politico.

He acknowledged that many people were uncomfortable with the degree of control that “media mandarins” from The New York Times and other establishment publications once exerted over the narrative of presidential campaigns. The new reality of social media, he said, has recast the role of reporters to one of monitoring the veracity of campaign statements, tracking the connection between money and politics and looking at some of the issues “that candidates seek to avoid.”

Canellos believes the two major political parties will survive an election with two relatively unpopular nominees, but that each will change significantly.

“If you look at the history of the country the two parties’ positions have shifted dramatically. Who would have thought that the Democrats would be the party of Wall Street now? And the migration of working- class blue-collar voters to the Republican party seems to have accelerated strongly with the Trump nomination.”

The Democrats, according to Canellos, will have to sort out whether their future lies with the insurgent wing represented by Senators Bernie Sanders and Elizabeth Warren, or the establishment block led by Hillary Clinton.

“On the Republican side there will be quite an identity crisis. Even if Trump is elected, there will be questions within the Republican party about who they should be and what they should be,” he said.

Canellos said that early predictions that Democrats would regain control of the U.S. Senate appear to have been premature. Control of the Senate is now “a 50-50 proposition” as senators such as John McCain who trailed badly in the polls during the summer appear to be making up ground.

He believes the long-term legacy of the 2016 presidential election will be a sustained debate over the plight of middle-class workers, especially in traditional manufacturing areas now struggling to find new ways to grow.

“Trump has played   a role in putting that constituency front and center...Even some of the Democratic proposals like free college tuition and retraining through community colleges are responding to that constituency."

Topics: Economy, AIM Executive Forum, Policy

AIM Honors GE, Nuance Communications and Dr. Ann McKee with Inaugural Vision Awards

Posted by Christopher Geehern on Apr 25, 2016 7:30:00 AM

Two companies that have transformed the Massachusetts economy and a distinguished brain researcher who has changed the manner in which Americans view sports injuries have been named inaugural recipients of the Vision Award from Associated Industries of Massachusetts.

General Electric of Boston, Nuance Communications of Burlington and Boston University brain researcher Dr. Ann McKee will receive the honors during AIM’s 2016 annual meeting May 13 at the Westin Boston Waterfront hotel.

The Vision Award recognizes companies, organizations and individuals who have made unique contributions to the cause of economic opportunity in Massachusetts and the well-being of the people who live here. The award reflects AIM’s mission to stand for jobs, economic opportunity, 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 4,500 member employers of Associated Industries of Massachusetts are delighted to honor two companies and one individual who have truly changed the way we live,” said AIM President and Chief Executive Officer Richard C. Lord.

“GE has redefined the way we view Massachusetts. Nuance has shaped the way we interact with technology. And Dr. Ann McKee has outlined an entirely new set of assumptions for athletic safety from the professional level to youth leagues.”

GeneralElectric2.jpgGeneral Electric, a founding member of AIM in 1915, altered the economic development landscape of Massachusetts when it announced in January that it would relocate its corporate headquarters to the Seaport in South Boston. GE will bring roughly 800 jobs to Boston and create a GE Digital Foundry for co-development, incubation and product development with customers, startups and partners.

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

CEO Jeffrey Immelt explained the move to Boston: “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… 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.”

Nuance.jpgNuance Communications is a global pioneer in voice-recognition and imaging software that bridges the gap between humans and the technology they create. 

The $2 billion-a-year company is best known for providing the voice recognition technology that underpins many digital personal assistants, including Apple’s Siri, Samsung’s S-Voice and Ford’s Sync. 

But Nuance’s largest business segment is providing software that allows healthcare professionals to dictate and capture patient information that streamlines electronic medical records.  Today, more than 500,000 medical professionals use Nuance's products in some capacity.

Nuance employs 14,000 people – with more than 1,000 in Massachusetts – and maintains regional offices in 35 countries. Its international headquarters is located in Dublin.

The company describes its work this way: “Technology should work in service of people, and adapt to the way people communicate instead of forcing people to adapt to the machines.

“We are pioneers in making technology fluent in all things human: from understanding spoken words and extracting their meaning to adaptively and seamlessly interpreting the swipe of a fingertip…And we continuously evolve the ability to perceive the nuance of words, actions and meaning – to fit into your life, your business and your world.”

Mckee.jpgDr. Ann McKee has brought the issue of chronic brain trauma and its effect on athletes and members of the military into the forefront of American consciousness. Her research establishing a link between repetitive head impacts and chronic traumatic encephalopathy (CTE) in former professional football players prompted the National Football League to acknowledge in March a connection between the sport and degenerative brain disorders.

The league’s admission came at a Congressional hearing just moments after Dr. McKee had presented findings showing that dozens of former players who had died were afflicted with the disease. The NFL reached a $765 million settlement in 2015 over concussion-related brain injuries among its 18,000 retired players.

Dr. McKee’s research is also influencing youth sports. PopWarner, the world’s largest youth football league, made rule changes in 2012 to begin limiting contact during practices “in light of developing concussion research.”

Dr. McKee serves as chief of neuropathy for the Veterans Administration, Boston Health Care System. She directs the CTE Center and Brain Banks for the Boston University Alzheimer’s Disease Center and Framingham Heart Study. She is also professor of Neurology and Pathology at Boston University School of Medicine.

The AIM Annual Meeting is expected to draw some 750 senior business leaders form throughout Massachusetts. The event will feature a keynote address by Massachusetts House Speaker Robert DeLeo and presentation of the annual John Gould Education and Workforce Development Award.

 

Register for the 2016 AIM Annual Meeting

Topics: AIM Annual Meeting, Economy, AIM Vision Award

Employer Confidence Weakens in February

Posted by Christopher Geehern on Mar 1, 2016 11:16:49 AM

Confidence among Massachusetts employers weakened for the fifth time in seven months during February, but businesses remain optimistic overall about the ability of the Massachusetts economy to ride out uncertainty abroad and an increasingly curious election season in the United States.

BCI.February.2016.jpgThe Associated Industries of Massachusetts (AIM) Business Confidence Index shed 0.7 points to 55.1 last month, still comfortably above the 50 mark that denotes a positive economic outlook.

However, the reading was 4.7 points below its level of a year earlier, weighed down by growing concern about the slowing U.S. economy. That concern was confirmed Friday when the government said U.S. economic growth slowed to 1 percent during the fourth quarter of 2015.

“We’re seeing some ambivalence among employers as they look at the economy, especially the turmoil in some overseas markets, but all within the range of general optimism about 2016,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Ambivalence indeed seems to define most views of the US economy, as we saw last week when the annual Economic Report of the President noted the strong rebound since 2008 while acknowledging that economic forces, including the rapid pace of technological change, are weighing on American industry.”

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.

National, State Indicators Decline

Virtually all of the sub-indices based on selected questions or categories of employer declined during February and dropped significantly from their levels of February 2015.

The Massachusetts Index, assessing business conditions within the commonwealth, slid 1.7 points to 56.4 in February, down 3.4 points from the year earlier. The U.S. Index of national business conditions remained in negative territory, declining by 2.5 points to 47.4 for the month and by almost eight points during the past year.

The Current Index, which assesses overall business conditions at the time of the survey, dropped by 0.3 points, while the Future Index, measuring expectations for six months out, declined 1.1 points to 55.9.

"Employer views of current conditions and future prospects are almost identical, unlike a year ago when companies were more upbeat looking forward. The February 2016 survey reflects an environment of global uncertainty, characterized by financial market volatility, weakening corporate earnings, and rising credit risk,” said Sara L. Johnson, Senior Research Director, Global Economics, IHS Global Insight and a BEA member.

Operational Views Strengthen

The three sub-indices bearing on survey respondents’ own operations strengthened in February.

The Company Index, reflecting overall business conditions, rose 0.3 points to 57.3, while the Sales Index surged a full point to 58.1. The Employment Index declined slightly by 0.2 points to 54.7.

“Companies feel pretty good when they look at their own prospects and hiring plans,” said Barry Bluestone, Professor of Political Economy at Northeastern University.

The survey found that 38.8 percent of respondents reported adding staff during the past six months while 19 percent reduced employment. Expectations for the next six months were even stronger – 37 percent hiring and only 10 percent downsizing.

“Once you get past the immediate economic issues, the real story of the Massachusetts economy will be the ability of these growing employers to find people with the skills and education needed for the high-value jobs that are being created,” Bluestone said.

Confidence levels in February were higher in Greater Boston (52.5) than in the rest of the commonwealth (49.4). Employers in the manufacturing sector continued to be less positive (52.1, -1.7) than other employers (58.3, -0.1).
Employers of all sizes recorded positive confidence levels, with the mid-size group lagging behind both larger and smaller companies.

Government Actions Key to Business Climate

AIM’s President and CEO Richard C. Lord, a BEA member, said the February Index underscores both the underlying resilience of the Massachusetts economy and the persistent challenge of ensuring that economic growth benefits all areas of the state.

Noting the difference in confidence levels inside the Boston/Cambridge technology corridor and the rest of the state, Lord said, “How do we as a ‘common wealth’ address the widening imbalance between the economically thriving economy of Greater Boston and the more traditional economy that dominates the commonwealth from Route 495 to Berkshire County?

“The economy outside Boston depends for its growth upon an industry mix that is far more affected by the high cost structure and heavy regulatory tradition of Massachusetts. That is why it is so important for Beacon Hill lawmakers to be vigilant about controlling the costs of energy, health care and other factors that drive job creation.”

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

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