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Business Confidence Drops to 17-Month Low

Posted by Christopher Geehern on Nov 6, 2018 8:04:29 AM

Business confidence in Massachusetts declined to its lowest level in 17 months during October as the uncertainties that roiled global financial markets seeped into employer outlooks.

BCI.October.2018The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 1.6 points to 61.0 last month, the fourth decline in the last five months.

The reading remains well within optimistic territory, but the BCI now sits 1.7 points lower than its level of a year ago and at its lowest point since May 2017.

Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design, said the October decline is noteworthy because of large declines in employer confidence in their own operations, and among manufacturers.

“Fears about slowing growth, trade wars and rising interest rates buffeted financial markets this month, and some of those same fears, combined with an increasingly acrimonious mid-term election, affected employers as well,” Torto said

“The good news is that the fundamentals of the economy remain strong. MassBenchmarks reports that the Massachusetts economy grew at a 3.3 percent annual rate during the third quarter and the national economy added 250,000 jobs last month.”

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 almost all lower during October.

The one exception was the Massachusetts Index assessing business conditions within the commonwealth, which rose 0.2 points to 64.7. Confidence in the state economy has declined 0.4 points since October 2017.

The U.S. Index lost 2.0 points to 61.6, leaving it 0.9 points lower than a year ago.

The Company Index measuring employer assessments of their own operations dropped 2.0 points to 59.6, down 2.4 points year-to-year. The Employment Index lost 0.3 points during October while the Sales Index tumbled 3.1 points to 57.4.

The Current Index, which assesses overall business conditions at the time of the survey, fell 1.0 point last month to 63.3 and 0.3 points for the year. The Future Index, measuring expectations for six months out, lost 2.1 points for the month and 3.2 points for the year.

Non-manufacturers (61.7) were slightly more optimistic that manufacturing companies (60.3). Companies in the eastern part of Massachusetts (61.7) were more bullish than those in the west (60.3).

Medium-sized companies (62.1) registered higher confidence readings than either large companies (59.5) or small companies (60.6), an unusual result since large companies typically show the most optimism on the BCI.

Katherine A. Kiel, Professor of Economics at The College of the Holy Cross in Worcester and a member of the BEA, suggested that large companies may be particularly concerned about the ratcheting up of trade tensions between the United States, China and other trading partners.

“Employers responding to the survey are expressing fears about the potential effects of rising tariffs both on the price of raw materials and their ability to expand overseas markets,” Kiel said.
Intersection of Politics, Economy

AIM President and CEO Richard C. Lord, also BEA member, agreed that international trade friction and uncertainty about the duration and scope of new tariffs are clouding employer views of an otherwise solid economy.

“Concerns about trade and tariffs are likely to influence employer decisions as we move toward the end of 2018 and into the New Year. Hopefully, the results of the mid-term elections today will shed some light on the direction of trade policy moving forward.”

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

Confidence Slips, But Overall Outlook Remains Positive

Posted by Christopher Geehern on Oct 2, 2018 8:00:00 AM

Business confidence in Massachusetts declined slightly during September as employers balanced optimism about economic fundamentals with concerns about tariffs and new state regulations.

BCI.September.2018The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 0.6 points to 62.6 last month, leaving it almost even with its level of year ago. The BCI has been moving for most of 2018 within a narrow range that is well within optimistic territory.

Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design, said the steady business confidence readings may reflect the lack of any significant economic or political changes that threaten the nine-year-old recovery.

“The underlying direction of the state and national economies remains positive. The Massachusetts economy grew at a staggering 7.3 percent annual rate during the second quarter and unemployment remains near historic lows at 3.6 percent,” Torto said.

“At the same time, employers remain wary of raw-material price increases brought about by new tariffs. The September survey was taken prior to the announcement Sunday of a new trade agreement between the United States, Mexico and Canada, so it will be interesting to learn whether that deal affects employer attitudes moving forward.”

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 mostly lower during September.

The Massachusetts Index assessing business conditions within the commonwealth ended the month at 64.5, falling 0.2 points for the month and 0.9 points for the year.

The U.S. Index lost 1.1 points to 63.6, still 3.8 points higher than in September 2017.

The Company Index measuring employer assessments of their own operations declined half a point to 61.6, down 0.7 points from September 2017. The Employment Index gained 0.3 points during September while the Sales Index lost 0.5 points to 60.5.

The Current Index, which assesses overall business conditions at the time of the survey, fell 1.8 points last month to 64.3. The Future Index, measuring expectations for six months out, gained 0.6 points. The Current Index rose 1.4 points during the year while the Future Index lost 1.1 points.

Manufacturing companies (63.3) were more optimistic than non-manufacturers (61.8), reversing a long-term trend in the confidence survey. Companies in the eastern part of Massachusetts (64.4) were more bullish than those in the west (60.2).

Michael D. Goodman, Executive Director of the Public Policy Center (PPC) at UMass Dartmouth and a BEA member, noted that the persistent shortage of skilled workers in key occupations and the tightening labor market at long last appear to be exerting upward pressure on wages, even if the benefits of rising incomes remain concentrated in the Greater Boston region and among the state’s highest earning households.

“Aggregate wage and salary income as measured by state withholding tax collections in Massachusetts grew at a 19.2 percent annualized rate in the second quarter, while nationally, U.S. workers saw their biggest pay increase in nearly a decade during the 12 months ending in June.” Goodman said.  “While the rising tide is not yet lifting boats in every corner of the Commonwealth, economic conditions in Massachusetts were undeniably very strong in the second quarter.”

AIM President and CEO Richard C. Lord, also BEA member, said the solid level of employer confidence during the past year bodes well for job growth in the months ahead.
“Confident employers hire new workers, invest in capital equipment, develop new markets and expand their plants and offices,” Lord said.

“It’s particularly encouraging to see year-over-year gains in both the Manufacturing Index and the Employment Index. Jobs and economic opportunity are, after all, the ultimate benefits of a strong economy.”

Topics: AIM Business Confidence Index, Tariff, Massachusetts economy

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

Twelve Companies Honored with 2018 AIM Next Century Awards

Posted by Christopher Geehern on Sep 4, 2018 8:30:00 AM

NextCentury2018

A world-renowned wellness resort in the Berkshires, a Southbridge manufacturer that has made cutlery since James Monroe was president, and a clean-technology incubator that has launched more than 170 companies are among 12 organizations and individuals that will receive Next Century awards from Associated Industries of Massachusetts at a series of regional celebrations in September, October and November.

Next Century awards honor employers, community organizations and individuals who have made unique contributions to the Massachusetts economy and the well-being of the people who live here.

AIM announced today that 2018 Next Century awards will go to Greentown Labs of Somerville; Cityscapes of Boston; 99 Degrees Custom of Lawrence; Gem Group Inc. of Lawrence; Lancaster Packaging of Hudson; Dexter Russell Inc. of Southbridge; Six Flags New England of Agawam; United Personnel of Springfield; Canyon Rach of Lenox; B & B Micro Manufacturing of North Adams; Accurounds of Avon; and Sensata Technologies of Attleboro.

“AIM created the Next Century Award to honor the accomplishments of companies and individuals creating a new era of economic opportunity for the people of Massachusetts. These remarkable people and institutions - world leaders in their fields – inspire the rest of us by exemplifying the intelligence, hard work and dedication to success that has built our commonwealth,” said Richard C. Lord, President and Chief Executive Officer of AIM.

Award winners will be honored at AIM regional celebrations in Boston on September 27, Lawrence on October 4, Worcester on October 11, Holyoke on October 18, Pittsfield on October 25, and Easton on November 1. Each event will run from 4:30-6:30 and is free to AIM members.

Here are summaries of each recipient, along with the date and location of the celebration when each will receive the award.

Greentown Labs | September 27 | 100 High Street Amenity Center | Boston

Somerville-based Greentown Labs is the largest hardware-focused, cleantech incubator in the country, providing 100,000 square feet of prototyping lab and office space to entrepreneurs building products to address society’s biggest environmental challenges.

Greentown Labs was born in 2011 when five entrepreneurs - Jason Hanna of Coincident, Sam White and Sorin Grama of Promethean Power Systems, Jeremy Pitts of Oscomp Systems and Adam Rein of Altaeros Energies - were looking for affordable space to keep building prototypes after they graduated from MIT. The organization has since nurtured more than 170 startup companies that have together created 1,200 jobs and raised more than $350 million in funding.

The organization currently houses 90 companies that are building and commercializing solutions for renewable-power generation, sustainable transportation, energy efficiency, battery storage, industrial- waste recycling, and water conservation. In late 2017, Greentown Labs expanded its campus within the Union Square neighborhood of Somerville and added 58,000 square feet of coworking, prototyping lab, chemistry lab, and event space.

Among the companies to grow out of Greentown are Bevi, Accion Systems, NBD Nano, RightHand Robotics, Open Water Power, and Piaggio Fast Forward. 

Greentown Labs also maintains a Manufacturing Initiative that allows startups to establish working relationships with manufacturers throughout the commonwealth. The Manufacturing Initiative has facilitated nearly 800 connections between startups and manufacturers leading to more than 75 contracts.

Cityscapes| September 27 | 100 High Street Amenity Center | Boston

“I transform people’s lives with the power of plants.”

Janice Goodman, founder and CEO of the interior-scape company Cityscapes, has built a thriving business by bringing the outdoors inside at glass-and-steel office structures throughout Boston.

Forget the single plant in the corner of your office – Goodman and her 70 employees believe the business is about biophilia, the concept developed by Harvard biologist E.O. Wilson identifying the innate human and emotional connection to nature. Cityscapes has made that connection everywhere from the Wintergarden at the Prudential Center to the renovated atrium at 100 Federal Street, where the company installed two “living walls” of plants.

Cityscapes blossomed in 1992 from a retail flower business called Fleurtacious that Goodman operated in Copley Square. Cityscapes provides design consultation, weekly guaranteed plant maintenance, flowering plant programs, seasonal displays and exterior landscape services for property management companies, office buildings, corporations and hotels throughout the greater Boston area.

Cityscapes uses live plants in areas where nature is sparse. Goodman says the process is especially important today amid a worldwide building boom of office towers.

“Traditionally, with urban expansion, many natural open spaces are lost, but designing with nature in mind will benefit us all in the end,” she says.

“Today’s built environments can and quite often do cause stress. Biophilic design is a solution to this issue, decreasing negative effects on people and nature alike, while facilitating the connection between the two.”

Goodman is a professional speaker and registered instructor for the American Institute of Architects Continuing Education system; and for BOMI, Building Owners Managers Institute, offering educational credits and programs to architectural and commercial property professionals.

Cityscapes is heavily invested in supporting community organizations. The company donates plant material and holiday decorations to local charities and non-profit organizations such as the Brookview House, Friends of the Elderly, The Home for Little Wanderers, The Pine Street Inn, The American Cancer Society, Hope in Bloom, Rosie’s Place, and the Veterans Hospitals throughout Boston.

Goodman and her staff also invite children from local day-care centers to the greenhouse, so they can learn about plants and how they help the environment.  Cityscapes has provided jobs for people with disabilities for more than 18 years.

99 Degrees Custom | October 4 | The Riverwalk, Lawrence

“Apparel, meet your future.”

99 Degrees Custom of Lawrence is seeking to create nothing less than a second industrial revolution in a city that was a cradle of the first.

The company launched in 2013 with a vision of melding technology, design, just-in-time manufacturing and socially conscious management into a new model for the apparel industry. Thirty-four-year-old founder and CEO Brenna Nan Schneider calls her vision “inclusive innovation.”

99 Degrees Custom fills specialty orders for activewear – everything from oven mitts to running jackets.   Applications include military, medical, and consumer markets. The company offers full development services, sample making, small-batch manufacturing, and production.

Customers include start-ups and established brands like New Balance. Schneider has grown by helping apparel companies complement their forecast-based global supply chain with demand-driven domestic production. That allows the companies to keep inventory in stock, reduce mark-downs, and eliminate sold out styles, colors, and sizes.

“By combining a smart and responsive supply chain model with wearable technology integration, we envision a bright future for US apparel manufacturing and jobs,” the company says.

99 Degrees Custom is known for lean process, a team committed to continuous improvement, and production lines engineered for agility. It works “on the cutting edge of sew-free and wearable technology integration as well as on-demand and mass customization manufacturing.”

Schneider’s long-term plan is to become a major apparel manufacturer with 1,000 jobs that allow employees to support themselves and their families.

“You have families working fulltime jobs living in poverty and more jobs that are being created that place people in poverty,” says Schneider.  “So how do we change that?”

Schneider starts by paying her workers above the minimum wage.   She has also created a culture in which learning is a priority.   Speed and quality are important, but what she wants most from her employees is to continuously learn – technical skills and executive ones, like solving problems.

99 Degrees Custom has garnered numerous awards, including the 2017 Massachusetts Legislative Caucus Manufacturing Award, the MIT Inclusive Innovation Prize and The Boston Globe’s Game Changers list.

The Gem Group | October 4 | The Riverwalk | Lawrence

The Gem Group is a multi-award winning, industry leader selling primarily into the promotional products market.

Going to market under the line name, Gemline, they are one of the Promotional industry’s largest suppliers as ranked by the Advertising Specialty Institute. Gemline is headquartered in Lawrence, Massachusetts and has a technical center in Southern China.

The company is run by Jonathan Isaacson, who bought the company from family members in 1994. Gem moved to Lawrence in 1997 and has experienced significant growth since they arrived in the Merrimack Valley. They currently employ almost 400 people in the Lawrence facility

Known for their on-trend, high quality merchandise, their product line consists of a wide range of bags, business accessories, gifts, stationary, and electronics. Beyond the Gemline brand of products, they also have exclusive brand partnerships with high-quality consumer brands such as Moleskine, Samsonite, American Tourister, Hartmann, Igloo, Brookstone, and Zebra. They recently added food gifts to their assortment.

Key to Gemline’s success is their focus on “Pride in People and Pride in Product”. This is the foundation of their continuous improvement program, called the Gem Performance System (GPS), which is based on the principals of Lean Manufacturing.

The core of the GPS system revolves around developing great people, who in turn develop the exceptional products and services that drive corporate growth. Each associate in the company is expected to participate in the GPS activity, which is seen both as a cultural framework as well as a vehicle for continuous improvement.

For example, the company asks each associate to implement at least 50 ideas for improvement within their span of control. Since the program has been implemented, the company has harvested more than 35,000 individual ideas to improve performance.

The engagement of the associates at Gem with the GPS system begins from day one. New associates are trained in core values such as trust, integrity, and humility. They are encouraged to seek personal development through a framework Gem describes as “respect for people”. This system is supported with continual investment in the development of their people, teaching them to make problems visible, and to create solutions with a data driven methodology that seeks to get to a root cause.

Beyond the obvious benefits around quality, cost, and delivery, this system has led to Gem being seen as an employer of choice, with the better ability to recruit and retain talented individuals.

Equally important, Gem is exceedingly proud that, with a corporate focus on training and development, many managers have come up through the ranks. A number started at entry level positions, some entering with no degrees, few skills, and limited English language ability.

Gem recognizes that, in many cases, this was indicative of an opportunity gap rather than a talent gap. So, with Gem’s focus on training and development, and through the hard work and abilities of these individuals, many have risen to become exceptional managers with broad responsibility.

Outside of Gem, and in keeping with their corporate values around engagement, Gem is a proud partner with the local community. Gem works with local organizations that provide advancement opportunities for the many talented individuals in the community, who might only require an opportunity to help realize their potential.

Gem believes that it is a corporate obligation to be a part of the community. And, by being an active participant in community development, they not only make a better community, but they also make a better place for their associates to live. This ultimately will help the company itself to better realize its full potential.

Dexter-Russell Inc.| October 11 | Mechanics Hall | Worcester

The oldest and largest maker of professional cutlery in the United States celebrates 200 years in business in 2018, an extraordinary accomplishment that underscores the adaptability and foresight of manufacturers who continue to thrive in Massachusetts.

Dexter-Russell Inc. employs more than 200 people at its plant in Southbridge just west of Worcester. The company manufacturers about 2,400 different products, from steak knives to pizza cutters, many of which end up in restaurants or meat and seafood processing plants. Many New England fisherman prefer a Dexter knife to cut their stripers, fluke or tuna.

Efficiency and automation are the reasons that the company has been able to prosper during a period when many manufacturers have not, according to President and CEO Alan Peppel, a longtime member of the AIM Board of Directors.

“We have always believed in continuous improvement, and now are overlaying more aggressive lean manufacturing concepts. In addition, we have always reinvested back into the business using the most advanced machinery in the world to make our products world class in quality and efficiency,” Peppel says.

Dexter-Russell, Inc. is successor to two venerable American cutlery manufacturers: The Harrington Cutlery Company and the John Russell Cutlery Company.

Henry Harrington, a New England craftsman and inventor, established the first cutlery company in the United States on June 18, 1818 in Southbridge. Harrington manufactured surgical equipment and shoe knives.

He introduced the Dexter trade name in 1884. Named after Henry Harrington’s son, the Dexter line of fine kitchen and table cutlery soon gained a reputation for quality in America's homes and restaurants.

Another New Englander, John Russell, founded his Green River Works on March 1, 1834. After having made his fortune in the cotton industry, Russell, at age 37, turned his energies to the manufacturing of quality cutlery. He built his water powered factory on the banks of the Green River near Greenfield.

On May 1, 1933, the Harrington Cutlery Company and the John Russell Cutlery Company merged, bringing together the two most respected names in cutlery. The new company, Russell Harrington Cutlery Company, offered a broad range of quality cutlery products from the famous knives that "won the west" to innovative cutlery for the professional and industrial markets.

After an ownership change in 1968, the company changed its name to Dexter-Russell, Inc. in 2001 to reflect its long history of product brand identity.

Just as John Russell paid generous wages in the nineteenth century to attract skilled craftsmen from Europe, Dexter-Russell today competes for talent with pay and benefits such as a profit-sharing plan that is available to all employees. It was one of the first profit-sharing plans created in the country at the time.

The program gives workers the opportunity to contribute up to 5 percent percent of their earnings into their 401-K retirement fund each year. When combined with the company’s match and separate contribution based on profitability, an employee can save 20 percent of earnings annually into their own retirement account. More than 90 percent of employees participate.

Another element of the company’s success and longevity, according to Peppel, is its practice of being close to the customer and listening to customer needs. The company is often able to identify a need, then engineer and manufacture a knife, turner, or other product and have it delivered in less time than it would take to make and ship the product from overseas.

“Our success is evaluated every day: how well do we meet our customers’ needs; and as a manufacturer, how well do we improve our products and our manufacturing processes to improve quality and efficiency,” Peppel says.

Lancaster Packaging | October 11 | Mechanics Hall | Worcester

Marianne Lancaster has built the Hudson-based supply management and wholesale packaging distribution firm she started straight out of college 29 years ago into a national company with 18 employees operating out of two buildings.

It’s a small-business success story forged against challenges ranging from the 2008 recession to competition from large national players to the unique financial and operational issues that confront minority women business owners. She has persevered not only by growing her own company but also by becoming a respected voice helping fellow minority entrepreneurs access the resources they need.

Lancaster Packaging can source industrial packaging, often with military specifications, from multiple suppliers with which it has built relationships over the years. The company also keeps a supply of packaging in its Hudson warehouse to help clients who need it quickly. Certain sizes and types of packaging built to military specs can take time to order from a custom shop - having it available in Lancaster's warehouse allows a quick drop shipment.

Faced with increasing competition in the packaging space from logistics and trucking companies, and after losing her biggest customer in 2005 (a bank that was bought out by a larger bank), Lancaster was forced to reinvent her business model.

She launched a procurement services division in 2008 that focused her services on unique items companies purchase once but likely won't again. That allows procurement managers to focus on their core purchasing, while outsourcing smaller bits to Lancaster.

"This is stuff that comes up that's unexpected that they may never buy from that supplier again," she told the Worcester Business Journal. "(Procurement managers) don't want to deal with a $20 flashlight someone needs in Alabama. That's what we do."

The bulk of her customers are in the aerospace industry, including BAE Systems and Sikorsky Aircraft Corp. Engineering teams are often the ones purchasing one-off items.

Lancaster credits the procurement division with most of the company's revenue growth over the past few years. It’s the sort of growth that lands Lancaster Packaging regularly among the Boston Globe’s Top 100 women-led companies.

Lancaster has used her own business success to address the broader issues facing women and people of color seeking to build companies. In 2013, she testified before the U.S. Senate Committee on Small Business and Entrepreneurship, which held a hearing on how to strengthen the entrepreneurial ecosystem for minority women.

Lancaster told the committee that lack of financing initially inhibited the development of her company, a story consistent with studies showing that minority-owned firms have a disproportionate challenge in accessing capital. According to a study by the U.S. Department of Commerce, minority-owned firms are less likely to receive loans, more likely to be denied loans, and pay higher-than-average interest rates.

Ultimately, according to Lancaster, success is built upon relationships.

“The key to our success has been the development of amazing, trusting and collaborative relationships between both our customers and suppliers.”

Six Flags New England | October 18 | Wistariahurst Museum | Holyoke

The economic footprint of Six Flags New England is every bit as imposing as the Superman roller coaster that marks the largest amusement park in New England along the banks of the Connecticut River.

Six Flags, which began to operate the former Riverside Park in 1998, has spent millions of dollars over two decades to expand its lineup of 100 rides, shows and attractions, along with the largest water park in the Northeast. The company is the region’s largest seasonal employer, hiring more than 3,000 people each year during a nine-month season that stretches from the spring through the summer to the holidays.

The 235-acre park is also a lynchpin of the tourism economy both for western Massachusetts and the entire commonwealth. The organization’s 13 roller coasters draw thousands of visitors to the region and provide national media exposure for Massachusetts as a destination.

The property is one of 20 across the United States, Canada and Mexico operated by Six Flags, a $1.4 billion-a-year enterprise that is the nation’s largest owner of regional amusement parks. More than 30 million people visit a Six Flags park each year.

Capital investments at Six Flags during the past six years include vertigo-inducing rides such as Harley Quinn Spinsanity, the Joker 4D Free Fly Coaster, Wicked Cyclone and New England Sky Screamer. In between the thrills, Six Flags welcomes visitors with entertainment figures ranging from Bugs Bunny and Daffy Duck to Batman and Wonder Woman.

Six Flags maintains a similarly high profile in the western Massachusetts community.  The company supports more than 3,000 non-profit organizations ranging from the Juvenile Diabetes Research Foundation and the American Red Cross to the March of Dimes and Baystate Children’s Hospital in Springfield. The support includes cash donations, ticket donations and on-site charity events.

United Personnel | October 18 | Wistariahurst Museum | Holyoke

At a time when finding qualified employees remains a defining challenge for Massachusetts companies, United Personnel of Springfield connects more than 700 people each day to good jobs throughout Massachusetts and Connecticut.

It’s been that way for 35 years since Mary Ellen Scott and her late husband, Jay Canavan, started the company with the goal providing employment opportunities to match the skills and aspirations of a range of western Massachusetts residents.  The company has thrived during the intervening decades by deftly weaving itself into the fabric of a western Massachusetts economy that operates uniquely on personal contact and trust.

United Personnel and its staff of 40 people provide clients with everything from temporary and contract workers to direct-hire employees in areas ranging from administrative and professional to information technology, light manufacturing, medical, dental and hospitality. The business puts the company on the front lines of complex and rapidly changing employment issues such as diversity, work-force development and education to meet ever-changing skill demands and the need to bring new participants into the work force.

Headquartered in downtown Springfield, United Personnel offers staffing support services throughout Massachusetts and Connecticut. The company operates additional offices in Northampton, Pittsfield and Chelmsford, along with Hartford and New Haven, Connecticut.

United Personnel is now led by Tricia Canavan, Mary Ellen and Jay’s daughter, along with a committed team of managers and staff. Canavan serves as a member of the Associated Industries of Massachusetts Board of Directors, in addition to serving on the boards of the Economic Development Council of Western Massachusetts, the Springfield Public Forum, the Springfield Regional Chamber of Commerce, Springfield Business Leaders for Education and the Massachusetts Workforce Development Board.

The company regularly appears on the Boston Globe list of Top 100 Women-Led Business in Massachusetts and this year received Inavero Best of Staffing awards for both client satisfaction and talent satisfaction.

"With a tight labor market and growing economy, finding the right recruiting partners is critical to success," said Inavero CEO Eric Gregg. "Best of Staffing winners provide consistently remarkable service to their clients and job candidates, and I couldn't be prouder to feature United Personnel as true leader in the industry."

The company underscored its ties to the Pioneer Valley two years ago when it opened new offices in Springfield in the historic Stearns Building, which dates to 1912. The offices face a corner of Steiger Park, once the site of the Steiger’s Department Store, and are across Bridge Street from the Springfield Innovation Center at 270-280 Bridge Street

The company marked its new headquarters and ongoing commitment to work-force development and education by creating a scholarship fund in the company's name that will help deserving students from the Gateway Cities of the Pioneer Valley continue their educations. The fund will be administered by the Community Foundation of Western Massachusetts.

Canyon Ranch Lenox | October 25 | Hotel on North | Pittsfield

Canyon Ranch Lenox, which rose from the ruins of the 19th-century Bellefontaine Mansion in 1989, has firmly established itself -and the Berkshires - as one of the top wellness destinations in the world.

It has also established itself as a centerpiece of the Berkshire County economy, attracting nearly 45,000 guests annually and employing about 560 people.

The resort encompasses nearly 120 acres, with the historic, stately 1897 Bellefontaine as the centerpiece. The structure was once as a private home, a seminary and a boarding school, but was empty and gutted by fire when Canyon Ranch Founders Mel and Enid Zuckerman and Jerry Cohen spent $10 million to restore the building as the East Coast presence of the company they started in Tucson, Arizona in 1979.

Canyon Ranch offers a lengthy selection of treatments that range from deep tissue massage to Ayurvedic treatments and detoxifying seaweed wraps. Board certified physicians are on staff to provide evidence-based prevention, science-based precision, and high-touch personalization as part of integrative medical solutions. The facility also offers diagnostic laboratory testing.

The Lenox resort is part of a sprawling wellness enterprise that includes the original flagship in Tucson, the world’s largest day spa at The Venetian® & The Palazzo® hotels in Las Vegas, and 22 Canyon Ranch at Sea wellness facilities on Cunard Cruise Line, Oceania® Cruises, Regent Seven Seas Cruises®, and Celebrity Cruises®. The company is now owned by John Goff, Chairman of Canyon Ranch, and is headquartered in Ft. Worth, Texas. Helmed by former auto executive Susan Docherty as its chief executive, Canyon Ranch is committed to the Lenox property and has recently accelerated its investments there.

Two years ago, the brand embarked upon a multi-million-dollar renovation of its dining room and guest rooms. The company also constructed 19 luxury condominiums called the Residences at Bellefontaine, providing owners a world-class wellness at their doorstep. The residential project is valued at $20 million to $22 million and contributes around $300,000 a year in property taxes to the Town of Lenox.

It’s a project that fits into a global “wellness real estate” market estimated at $134 billion by the Global Wellness Institute, with a pipeline of more than 740 projects worldwide.

Docherty told The Berkshire Eagle last year: "Canyon Ranch is a very wise sanctuary. We're trying to impart wisdom in whatever way guests seek it, so they can have a transformative experience."

B&B Micro Manufacturing | October 25 | Hotel on North | Pittsfield

Tiny houses are making a big impact on the Berkshire County economy.

B&B Micro Manufacturing – founded in 2016 by Hoosac Valley High classmates Chris St. Cyr, Mitch Bresett and Jason Koperniak – now employs 42 people in the Windsor Mill in North Adams making the kind of tiny houses that have become a staple of Home & Garden Television. B&B makes mostly contracted units for a vacation rental company, but also does custom tiny houses and its own designs.

North Adams Mayor Richard Alcombright told iBerkshires recently that the company's growth has been a bright spot in reviving the city's manufacturing base, an integral part of its creative economy. 

"You can say that there's going to be 100 new jobs when a hotel is being built and people here will say, 'OK'," he said. "Now you have 42 on the payroll since April in manufacturing and that, here, strikes a very cool chord."

Tiny homes, usually 500 or fewer square feet and capable of being moved on a trailer, have become enormously popular during the past decade among individuals and families looking to save money, simplify their lives and adopt an environmentally sustainable life. The market has been buoyed by television shows and tony home villages sprouting up around the country.

Tiny houses cost between $30,000 and $75,000 and can be built quickly. All units are built to Recreational Vehicle Industry Association standards.

St. Cyr, Bresett and Koperniak all grew up in Adams but came to the business from different directions. St. Cyr graduated from Williams College and worked for a hedge fund; Koperniak graduated from Bowdoin College and worked in the financial sector; and Bresett learned the home-building trade from his father, who founded B&B as a traditional home-building business. 

The B&B Micro Manufacturing partners see the next step as creating modular units for families or small custom homes. These could be an affordable housing solution for young people or empty-nesters, especially in expensive housing markets like eastern Massachusetts.  The company is newly certified as a modular manufacturer in the state of Massachusetts.  

"If we can take a $70,000 unit and put in the Boston area on a tract of land that may not support a large home — east of 495, housing is an issue," Koperniak told iBerkshires.

"We're trying to be that architecturally chic niche where you can have something very nice in a small size, at an affordable price point, and relatively fast."

Sensata Technologies | November 1 | Easton Country Club | Easton

The name Sensata comes from the Latin word sensate, which means “those gifted with sense.” It’s an appropriate name for century-old, $3.5 billion global company that engineers critical sensing systems embedded within automobiles, heavy vehicles and off road equipment, industrial and telecommunications equipment, and commercial and military airplanes.

Sensata designs and manufactures sensing, electrical protection, control and power management systems with operations and business centers in 12 countries globally.  The company’s products improve safety, efficiency, emissions and comfort for millions of people every day in transportation, appliance, aircraft, and industrial applications.

“We focus on solving the world’s need for a cleaner, more efficient, electrified and connected world,” says CEO Martha Sullivan, a member of the AIM Board of Directors.

With a US base in Attleboro, Sensata employs more than 1,000 people in Massachusetts.

A key priority remains developing and attracting engineering talent in a competitive global marketplace.

“We have a compelling vision and purpose and technologies that are vital to changes underway in the industrial landscape. This attracts talent and has served us well,” Sullivan says.

“Retaining our talent is just as important as attracting them,” Sullivan says. “We have built a culture that is based on a set of core values that helps define who we are as an organization; these values are built on teamwork and interdependency – we call it One Sensata – they are built on integrity, striving for excellence, bringing passion to the solutions and systems that we create and offering flexibility to our teams. This is how we are winning for our customers and for our teams.”

Winning for Sensata means being a world leader and early innovator in mission-critical sensor-rich solutions and electrical protection, helping engineers accomplish tasks as varied as:

  • Enabling electrification in cars, trucks and industrial equipment;
  • Lowering  emissions;
  • Improving industrial equipment efficiency;
  • Preventing electrical fires; and
  • Enabling smart and connected products.

The company sells 47,000 unique products and ships more than 1.1 billion units annually. Much of its market growth has come in China, which now represents 15 percent of company revenues.

AccuRounds | November 1 | Easton Country Club | Easton

AccuRounds and its CEO, Michael Tamasi, have become symbols of the new generation of hyper-efficient, advanced manufacturing companies driving the Massachusetts economy.

Founded in 1976, Avon-based AccuRounds is a contract manufacturer that machines and assembles precision turned components for the medical, defense, aerospace, semiconductor, robotics and emerging-technology markets. The company makes everything from the metal shafts used in the flu-vaccine manufacturing process to the top spires on all the "Freedom Trail" signs in Boston.

The company employs 80 people in its 45,000-square-foot facility on Bodwell Street.

AccuRounds was a manufacturing pioneer in 1995 when it embarked on a quest to implement lean manufacturing. These techniques were applied throughout the organization, and in 2006, AccuRounds won the Shingo Prize Northeast Silver Medallion, the first contract metalworking company in North America to do so.

The company later reorganized into value streams utilizing a comprehensive lean management system that has dramatically increased speed to market. It is a pattern that traces the transformation of manufacturing in Massachusetts from high-volume commodity goods made on vast assembly lines to complex, engineered parts made by highly-skilled workers.

Recently, AccuRounds has introduced automation, robotics, machine monitoring, big data and 3D printing to its production floor.  These new technologies are the future of manufacturing.  The team has embraced them as part of their continuous-learning culture.

CEO Tamasi has become an evangelist for the value of manufacturing in creating economic opportunity for the people of Massachusetts. He currently co-chairs the Massachusetts Advanced Manufacturing Collaborative, a state initiative to enhance the competitiveness of Massachusetts Manufacturers, and also chairs Business Leaders United, a group led by the National Skills Coalition in Washington, DC.

Tamasi went to the White House four years ago as one of only two small-business CEOs to participate in a high-level conference with former President Barack Obama on dealing with long-term unemployment. He has spent significant time addressing the persistent shortage of skilled manufacturing workers that threatens to slow the growth of the state economy.

“There is a renaissance in manufacturing taking place in this country. We have a golden opportunity to capitalize on it and grow our economy, but we need people to be trained and skilled,” he told Fox News after the White House conference.

“We need critical thinkers and problem solvers. We need people who want to improve, and most importantly, we need people with a positive attitude.”

Topics: Massachusetts employers, AIM Next Century Award, Massachusetts economy

Slow and Steady Approach to Clean Energy Protects Ratepayers

Posted by Robert Rio on Aug 27, 2018 8:30:00 AM

The energy bill passed in July by the Massachusetts Legislature, signed by Governor Charlie Baker and supported by AIM has been criticized by environmental advocates for not being “aggressive” enough in promoting the use of renewable energy.

WindTurbinesOceanSmallThe new law doubled the requirement for purchasing new renewable power over the next ten years and allowed the procurement of an additional 1600 MW of offshore wind, in addition to the 1600 MW of offshore wind and 1200 MW of hydro power already on tap.

It’s true that AIM urged lawmakers to take a cautious approach on the measure, especially since a sweeping 2016 energy bill that created a host of new initiatives is still being phased in.

But AIM has learned over the years that moving slowly and deliberately often leads to a better environmental and economic outcome than reacting quickly to the latest fad.   

Remember Cape wind? 

Back in 2010 the same environmental advocates and the administration of then-Governor Deval Patrick fell all over themselves supporting the Cape Wind project, even when it became obvious the development was in trouble. AIM recognized Cape Wind for what it was – a no-bid project with sky high prices that would have added hundreds of millions of dollars to 
the electric bills of Massachusetts ratepayers.

The 30 cents-per-kilowatt hour average price of Cape Wind would have become even worse than it seemed at the time because the wholesale cost of electricity has plummeted over the last eight years due to low natural-gas prices. 

Abandoning Cape Wind allowed offshore wind technology (and the law) to catch up to a place where we now have zero carbon-energy at reasonable costs. New offshore wind turbines are expected to produce electricity at less than a third of the cost of Cape Wind.   

AIM and its 4,000 member employers deserve a share of the credit for that cost shift.

It was AIM, not the environmental advocates, that ensured that the 2016 energy bill required all future offshore wind contracts to be transparent and competitively bid, because we knew competition would drive down prices. The bidding process also attracted world-renowned companies because they knew the process would be fair and open.

The 2016 law included two other important provision pushed by AIM. First, any future offshore wind contracts would have to be cheaper than any existing contract, guaranteeing lower prices in the future as technologies and experience levels become better. Second, these contracts would have to be cost-effective to the ratepayers of Massachusetts.

When Thomas Jefferson wrote the first draft of the Declaration of Independence it was widely criticized. Eighty-six changes were eventually made to that first draft, and the final document was shortened by one-fourth.   

 Our country’s founders weren’t against independence – they just wanted to make sure they got it right.

It worked backed then and we think it’s the best approach now.    

Topics: Energy, Massachusetts Legislature, Massachusetts economy

Business Confidence Flat During July

Posted by Christopher Geehern on Aug 7, 2018 9:07:47 AM

Confidence levels among Massachusetts employers were virtually unchanged during July as strong economic growth balanced persistent concerns about tariffs and escalating international trade tensions.

BCI.July.2018The Associated Industries of Massachusetts Business Confidence Index (BCI) dropped 0.1 point to 61.2 last month after tumbling more than five points in June. The drop left the BCI three-tenths of a point lower than a year ago, though still comfortably within optimistic territory.

Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design, said employers grew justifiably bullish about the state and national economies during July while expressing uncertainty about their own prospects.

“The Manufacturing Index has dropped more than eight points during the past two months, pretty much concurrent with the escalation of trade tensions that are increasing prices, disrupting global supply chains and putting some companies in the crosshairs of retaliatory tariffs,” Torto said.

One BCI survey participant in the construction industry wrote: “The tariffs are escalating building costs. We get several price increases per week. It’s harder for most people to have the means to spend on up-keep, much less renovation or new construction.”

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 mixed during July.

The Massachusetts Index assessing business conditions within the commonwealth gained 2.3 points to 65.1, leaving it 1.9 points ahead of July 2017.

The U.S. Index ended the month at 61.9, rising 1.9 points after sliding 9.3 points the previous month. The US Index was 4 points better than a year ago.

July marked the 101st 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 0.1 point to 63.6. The

Future Index, measuring expectations for six months out, fell 0.4 point. The Current Index gained 2.4 points during the year while the Future Index lost 3.1 points.

Operational Views

Employer views of their own companies weakened.

The Company Index declined 1.5 points to 59.7, down 2.5 points for 12 months. The Employment Index ended the month at 54.5, a 0.5-point decrease for the month and 1.2 points lower than a year ago. The Sales Index lost 0.6 point for the month and 2.3 points for the year.

Non-manufacturing companies (63.0) were more optimistic than manufacturers (58.6). Companies in the eastern part of Massachusetts (63.6) were more bullish than those in the west (57.6).

“The Massachusetts economy itself remains strong and it accelerated sharply in the second quarter, bucking the expectation of slower growth due to low unemployment and demographic constraints,” said Elmore Alexander, Dean of the Ricciardi College of Business, Bridgewater State University.

“The recent surge in state economic growth reflects strong gains in employment, earnings, and consumer and business spending.”

New Laws in Massachusetts

AIM President and CEO Richard C. Lord, also BEA member, said employers spent much of July digesting a raft of new public policies passed by the Massachusetts Legislature as it wrapped up the formal portion of its 2017-2018 session.

“Employers face new restrictions on the use of non-compete agreements, imposition of paid family leave, an increased minimum wage and a wholesale shift in the generation of the energy they use,” Lord said.

“And that’s on top of the $200 million annual assessment on employers to close a budget gap in the MassHealth program. Employers clearly have a lot to think about.”

Topics: AIM Business Confidence Index, International Trade, Massachusetts 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

Employer Confidence Surges during May

Posted by Christopher Geehern on Jun 5, 2018 9:28:26 AM

Business confidence surged during May to its highest level since the summer of 2000, driven by improving employer outlooks about the state and national economies.

BCI.May.2018The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 2.4 points to 66.6 last month after increasing modestly during April. The BCI has risen in five of the last six months and now stands 5.8 points higher than its level of a year ago.

Confidence remains well within the optimistic range. The only whiff of concern came in the index that measures hiring, which dropped 1.5 points for the month and 0.2 points during the year.

Economists believe the weakness in the AIM Employment Index reflects the persistent shortage of workers in Massachusetts that has forced some employers to postpone expansions or to decline new business opportunities.

Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design, cautioned that major month-to-month movements in the Index like those in May sometimes reflect statistical or sampling anomalies. He noted, however, that the numbers are consistent with a general sense that the US and state economies are picking up steam in the second quarter after a slow start to 2018.

“There are signs GDP growth gathered momentum early in the second quarter, with solid consumer spending, business investment on equipment and industrial production,” Torto said.

The nation’s economy grew at a 2.2 percent rate during the first quarter. Hiring across the US remains strong, with the government reporting on Friday that employers added 223,000 jobs during May.

“And the Massachusetts economy continues to operate at virtually full capacity, creating significant constraints on the availability of labor,” said Torto.

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 in May.
The Massachusetts Index assessing business conditions within the commonwealth surged 5.9 points to 70.0, leaving it 7.9 points higher than in May 2017.

The U.S. Index ended the month at 69.3, up 5.4 points for the month and 14.4 points for the year.
May marked the 99th 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, gained 1.5 points to 66.6. The Future Index, measuring expectations for six months out, increased 3.3 points to the same 66.6 level. The Current Index has risen 6.2 points and the Future Index 5.3 points since May 2017.

Employer views of their own companies were mixed.

The Company Index increased slightly to 64.5, up 2.1 points for 12 months. The Employment Index ended the month at 58.3, a 1.5-point decrease for the month and 0.2 points lower than a year ago. The Sales Index rose 1.7 points for the month and 3.3 points for the year.

Manufacturing companies (66.8) and non-manufacturers (66.3) were equally optimistic about the economy. Companies in the eastern part of Massachusetts (67.9) were more bullish than those in the west (64.6).

“Massachusetts employers remain confident, but economic growth in the commonwealth is increasingly bumping up against the structural shortage of skilled workers,” said Alan Clayton-Matthews, a BEA member and professor in the School of Public Policy & Urban Affairs, Northeastern University.

Clayton-Matthews told MassBenchmarks earlier this year: “Retiring baby boomers will continue to dampen labor force growth this year and throughout the next decade unless the commonwealth is able to attract young workers from across the country and the world.”

The BCI increase came as 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 the increase in business confidence underscores the underlying strength of the economy at a time when employers are receiving mixed signals from government.

“On the one hand, employers are seeing benefits from federal tax reform. On the other hand, they are struggling to process the new Massachusetts health-care surcharge and looking ahead warily to the possibility that Massachusetts voters may approve a graduated income tax that could harm small businesses,” Lord said.

“AIM and the employer community are seeking to negotiate reasonable compromises on issues such as paid family/medical leave and a $15 per hour minimum wage, compromises that would allow employers to continue creating jobs for Massachusetts residents.”

Topics: AIM Business Confidence Index, Massachusetts economy, Skills Gap

Video Blog | Lt. Governor Karyn Polito Discusses Economic Growth

Posted by Christopher Geehern on May 31, 2018 9:28:46 AM

Lt. Governor Karyn Polito, dubbed the “road warrior” because of a travel schedule that has taken her to every city and town in Massachusetts, told AIM members recently that the measure of economic growth is the degree to which prosperity is shared throughout the commonwealth.

The lieutenant governor spoke to more than 850 business leaders gathered for the AIM Annual Meeting.

Here is her entire speech:

Topics: AIM Annual Meeting, Lt. Governor Karyn Polito, Massachusetts economy

Natural-Gas Constraints Bad for Business, Bad for Environment

Posted by Bob Rio on May 8, 2018 11:41:13 AM

A shortage of natural-gas capacity during the December/January cold snap added $1.7 billion to the electric bills of business and residential customers in New England while erasing all the environmental benefits from solar energy in Massachusetts during 2017.

coal_power_plantNow you know why Massachusetts employers support the idea of expanding natural-gas infrastructure in the region.

New data released yesterday by the Massachusetts Coalition for Sustainable Energy (MCSE) and compiled by Concentric Energy Advisors underscores the economic and environmental damage wrought by our energy status quo. AIM is a member of the Coalition, along with scores of other business associations and labor unions.

Natural gas supplies in the region are tight during the winter. Despite abundant supplies just a few states away, pipeline infrastructure to get it here is inadequate and efforts to address this issue have been stymied by those who believe upgrading our natural gas infrastructure will stall progress on transitioning to clean energy. 

Electricity generators simply don’t have enough natural gas to operate during the bitter cold because most of the available gas is used to serve businesses and homeowners.

To satisfy the increased demand for electricity, power plants burn stored back-up oil and coal. The lights stay on, but greenhouse gas emissions increase exponentially since oil and coal emit more carbon than natural gas. The cold-weather shortage of natural gas has become so common in recent winters that power generators are paid to store oil, whether or not it is needed, as sort of an insurance policy funded by ratepayers through higher electric rates.

According to the Concentric report, the amount of coal and oil burned during just a two-week period generated 1.3 million tons of extra greenhouse gas emissions over what would have been emitted if gas had been available. The ratepayer cost was $1.7 billion higher than the previous winter – most of which will show up in next winter’s energy bills. 

In fact, Eversource yesterday sought a 15 percent increase in electric rates for customers in western Massachusetts for the period July through December.

How much is 1.3 million tons? The extra greenhouse gases negated all the greenhouse gas saving from all the solar energy produced in Massachusetts throughout 2017. It’s a problem that cannot be solved by adding more solar capacity since the highest need for natural gas is in the winter, when solar output is at its lowest.

Had the cold period continued (or if another came later in the year), brownouts would likely had occurred. ISO-NE, the regional power grid operator, reports that the system was about three days away from crashing as some plants were already running out of oil and had to curtail their output.       

This dangerous mix of rising costs, rising emissions and brownouts comes at a time when other states are dangling low energy costs in front of Massachusetts employers to persuade those companies to expand elsewhere. It’s not a tough sell – our energy costs are nearly double those of states in other regions of the country.

AIM, along with other members of the Coalition for Sustainable Energy, support a balanced approach to address the region’s energy problems. That approach embraces renewables - AIM has supported the development of both hydro power and offshore wind – while at the same time acknowledging the stresses on our current system and the economic and environmental damage that is occurring.

Read the Concentric Report

Please contact me at rrio@aimnet.org for more information.

 

Topics: Energy, Environment, Massachusetts economy

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