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Eleven Companies Earn AIM Next Century Awards

Posted by Christopher Geehern on Sep 5, 2019 10:25:10 AM

A global center of classical music in the Berkshires, a company attracting diverse workers to the construction industry and a technology mainstay on Cape Cod are among 11 Massachusetts companies to be honored with AIM Next Century Awards for 2019.

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.

TanglewoodAIM announced today that 2019 Next Century awards will go to iCorps Technologies of Boston; DRB Facility Services of Boston; Zogics of Lenox; Tanglewood of Lenox; MGM of Springfield; Peerless Precision Inc. of Westfield; Lynn Tokarczyk and Business Development Strategies Inc. of Medway; Onset Computer Corporation of Bourne; Rand-Whitney Container LLC of Worcester; Lampin Corporation of Uxbridge; and Interstate Electrical Services Corporation of North Billerica.

“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 John R. Regan, President and Chief Executive Officer of AIM.

Award winners will be honored at AIM regional celebrations in Boston on September 12, Pittsfield on September 19, Holyoke on October 3, Easton on October 10, Worcester on October 16 and Lawrence on October 24.

Each event will run from 5-7 pm 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.

iCorps Technologies | Boston Regional Celebration, September 12, 5-7 pm, District Hall

iCorps Technologies has been providing comprehensive, visionary information technology outsourcing to businesses across the Northeast since its founding in 1994.  

What began as a part-time business called Off-Hours Consulting quickly grew to the iCorps Technologies of today, with cofounders Mike Hadley and Chris Stephenson continuing to prioritize service while empowering clients through technology. 

Today, iCorps is ranked by the Boston Business Journal as one of the 25 largest IT consulting companies in Massachusetts. It earned Microsoft’s 2018 Partner Award Recipient for Security and Compliance. The company employs 65 people and is rapidly expanding both its geographic footprint and the industries it serves.

iCorps has moved beyond its Boston roots, with an established presence in New York, Philadelphia, Detroit, and Charleston. The company is expanding offerings to meet emerging needs within the legal, life science, professional service, and start-up sectors, while upgrading services in stronghold verticals such as finance and construction. 

iCorps provides a broad selection of on-site and remote IT services including outsourced IT support, cloud computing and optimization, managed programs for cybersecurity and business continuity, staff augmentation, and technology assessments. The company provides advanced technical expertise for clients leveraging products from Microsoft, AWS, Dell, Citrix, VMware, Sophos, Datto, SonicWALL, MimeCast, and more. 

It’s a crucial service for any company looking to thrive in a rapidly changing technology landscape.  

"The iCorps team has either known how to do things right off the bat or has been able to find the answers very quickly. Once I hit the limits, that’s where I can have the iCorps team finish things up for me, or take it to the next level,” said Austin Brinson, VP of Data Analytics, B.GOOD restaurant chain. 

Hadley remains at the helm of iCorps, ensuring that the next generation of business leaders experience “the high standards, expertise, ethics, intense customer focus, and comprehensive IT services offerings on which the company was founded.” 

DRB Facility Services | Boston Regional Celebration, September 12, 5-7 pm, District Hall

Boston-based DRB Facility Services, formerly known as Done Right Building Services, has established a sizable presence in the New England building maintenance industry in a short period of time. Founded by Anthony Samuels in 1993, DRB has grown to more than 600 employees and provides a full range of facilities services for both corporate and government clients.

That rapid growth has continued this year, as DRB expects to grow revenue by 50 percent.

DRB’s success has created economic opportunity in communities where it is most needed. The company, a 100-percent minority-owned enterprise, is committed to developing a workforce that reflects the proportion of people in the community that are of color, females, veterans,and handicapped. 

“As our company has grown, we have worked to develop the people, processes, and tools required to address the changing needs of our clients,” said Samuels. “Building systems have become more complex, as have the needs of building owners and managers, and our clients have asked for greater attention toward safety, environmental, and diversity requirements.”

“Integral to our success is our people. DRB continually recruits and develops the greatest talent in the building services industry,” Samuels said. “With over 11 years industry experience on average, and an optimal balance between management and staff, our management team is the best in the business.”

DRB provides janitorial, landscaping and snow removal services to some of the largest companies in the United States.  Employees are assigned to project teams to establish and enforce expectations for each facility. Project teams are cross-trained to ensure proper coverage.

Samuels was among the first participants in Eastern Bank’s Business Equity Initiative, an initiative designed to help enterprises of color grow.

Tanglewood | Berkshire Regional Celebration, September 19, 5-7 pm, Hotel on North

The economic benefit provided by the summer home of the Boston Symphony Orchestra is music to the ears of Berkshire County.

Tanglewood’s renowned summer-long festival of classical and popular music draws more than 300,000 concert-goers annually and generates an estimated $127 million in economic activity, according to research conducted by Williams College Professor Stephen Sheppard.

That impact includes a new $30 million performance, education and visitor complex to support  both the orchestra's summer institute for advanced young performers and the new Tanglewood Learning Institute for adults. The new center sits adjacent to the Koussevitzky Music Shed, Seiji Ozawa Hall and facilities housing the Tanglewood Music Center and its 300 students.

"Tanglewood has an enormous impact on the economy of Berkshire County," Sheppard concluded in a 2018 report.

Tanglewood generates between 930 and 1,100 jobs directly or indirectly, representing a payroll of $35 million. Although many are seasonal, these jobs provide an overall average income exceeding $40,000 a year, generating $15 million in federal, state and local tax revenues.

Sheppard found a 51 percent increase in visitor spending at Tanglewood, where average attendance has increased by 11 percent in the past 10 years. The effects on the county's economy result in an unemployment rate that is 1.8 percentage points below what it would be otherwise.

Tanglewood anchors a vibrant arts and tourism economy that also includes the Berkshire Theater Festival, Jacob’s Pillow Dance Festival, the Williamstown Theater Festival and the Normal Rockwell Museum. The Tanglewood festival regularly draws musical superstars such as Joshua Bell, Renee Fleming, YoY o Ma, Emanuel Ax and John Williams.

The history of Tanglewood began with a series of concerts held in 1934 at the Interlaken estate of Daniel Hanna, about a mile from today’s festival site. The Boston Symphony Orchestra first performed in 1936 and the festival moved a year later to "Tanglewood," an estate donated by Mrs. Gorham Brooks and Miss Mary Aspinwall Tappan.

"Tanglewood" took its name from Tanglewood Tales, written by Nathaniel Hawthorne, while he lived in a cottage located on the estate.

Zogics | Berkshire Regional Celebration, September 19, 5-7 pm, Hotel on North

It’s been a dizzying ride for fitness industry supplier Zogics from its origins in founder Paul LeBlanc’s Richmond garage 12 years ago to two consecutive years on the Inc. magazine list of 5,000 fastest-growing private companies in the United States.
 
Dizzying, but far from disruptive, for a laid-back company that offers employees flexible time off, an on-site gym, $500 a year to spend on Berkshire cultural events, subsidized organic community supported agriculture (CSA) shares, and an office where dogs comfortably share the space with workers.
 
Zogics is one of the wellness industry’s largest suppliers for fitness professionals. The company sells products ranging from exercise equipment to gym flooring and lockers to eco-friendly cleaning supplies to organic bath/body products. They serve more than 20,000 commercial gyms, schools, and workplace wellness programs around the world.
 
The company employs 20 people at its headquarters in Lenox and has distribution facilities throughout North America and Europe. Annual sales are approaching $15 million, and the company has been growing at between 25 and 30 percent annually.
 
“Our culture centers around creating the right environment for each employee to excel. Our employees are the heart of our success,” said LeBlanc, “We strive to cultivate a dynamic, engaging, and challenging workplace that inspires employees to give their very best every day.”

Appearing on the Inc. 5,000 list for a second time is rare and comes on top of Inc. honoring Zogics as among the Best Workplaces in America.
 
“In an incredibly competitive business landscape, it takes something extraordinary for a business to succeed. At Zogics, that ‘extraordinary’ is a mix of products we all stand by and employees that believe in the work they’re doing. Our team isn’t just one that sells health and fitness — we fully embrace it,” LeBlanc said.

MGM | Holyoke Regional Celebration, October 3, 5-7 pm, Wistariahurst Museum

The $960 million MGM Springfield has redefined the term "transformative development" in downtown Springfield as New England’s premier resort casino destination.

The commonwealth’s first full-gaming property has created thousands of jobs and drawn more than six million visitors since opening a year ago in a South End neighborhood of Springfield that for years struggled with economic development and the after-effects of a 2011 tornado. MGM Springfield generated $253 million in gross gaming revenue during its first 49 weeks of operation.

Forty percent of MGM Springfield employees live in Springfield. The company, part of MGM Resorts International, partnered with Holyoke Community College and Springfield Technical Community College to establish the Massachusetts Casino Career Training Institute to train people for an industry that was, at the time, brand new to Massachusetts.

Built with a unique “inside-out” design intended to integrate the resort and its customers with the neighborhood, MGM Springfield has been a catalyst for development up and down Main Street in Springfield.

MGM Springfield’s real estate partner, Davenport Companies, is building a $2 million CVS store in its Davenport Square site across Main Street from the casino. Balise Auto Group is building a $6 million Mazda dealership on property it has acquired over the years adjacent to its Hyundai dealership. And there are hotel and apartment proposals for the old York Street Jail site, where city development efforts have been frustrated for years. 

Neighborhood businesses like Red Rose Pizzeria are expanding to deal with an uptick in customer traffic.

“The unique design of our resort is something that is very special to us, and we wouldn’t change it for the world,” said MGM Springfield President Michael Mathis. "As Main Street in downtown Springfield becomes more activated, you're going to see more people bouncing back and forth.”

MGM Springfield has also ramped up the entertainment scene in downtown as manager of both the MassMutual Center and Symphony Hall venues. The company has brought big names such as Cher, Aerosmith, Stevie Wonder, Aaron Lewis, Steve Martin and Martin Short to downtown Springfield. 

Peerless Precision Inc. | Holyoke Regional Celebration, October 3, 5-7 pm, Wistariahurst Museum

Peerless Precision of Westfield lives up to its name. The 20-person, family-owned machine shop in Westfield specializes in making parts for the aerospace, defense, and medical devices industries that require precision to .0001 inch.

“Peerless Precision Inc. believes that you should design your products within 5 millionths without having to worry about manufacturability, consistency and accuracy; just send us the specs – we take care of the rest,” the company says.

Kristin Maier Carlson became president of Peerless in 2012, taking the reins from her late father when he became ill. She has since led the company through significant growth, expanded its markets and improved efficiency through lean manufacturing.

Carlson, who grew up around the shop from the age of 15, says she learned from her father the importance of providing educational and training opportunities for employees. The company spends significant time ensuring that expert-level workers pass along their skills to younger colleagues.

The company is also deeply involved with local schools. Carlson sits on the steering and advising committee for Westfield Technical Academy and West Springfield High School’s Pathways to Prosperity Program, and the company opens its doors annually to Westfield Middle School for student tours

“We want to show kids that manufacturing can be a cool and rewarding option for them,” Carlson says.

“One thing I have changed is we used to manage with a ‘top-down’ approach. Since taking over I have developed more of a ‘bottom-up’ culture. By embracing employee ideas, they are apt to share more and buy into the very ideas they are suggesting. I also drive a customer-focused culture. We all know and understand that without the customer, we are nothing,” Carlson said in an interview with innovate413.

Her vision for the future involves doubling the size of the company facility on Mainline Drive and increasing the work force. She would like to use one side of the building for production and the other side for job shop work, research and development, and prototyping, which would allow Peerless to expand into a global market at that point.

Lynn Tokarczyk, Business Development Strategies Inc. | Easton Regional Celebration, October 10, 5-7 pm, Easton Country Club

Lynn Tokarczyk may have helped to create more jobs and business investment in Massachusetts than anyone else.

The founder of the government tax incentives consulting firm, Business Development Strategies, Inc., (BDS) has assisted more than 100 Massachusetts businesses with creating 10,000 new jobs and retaining another 20,000 jobs. Those companies have saved more than $100 million in state and local taxes and invested more than $1 billion in Massachusetts cities and towns by navigating the often-mystifying maze of state and municipal business incentives with help from the BDS team.

Since its founding in 2003, BDS has built an impressive record of success assisting a “Who’s Who” of prominent companies identify, negotiate and secure tax incentives in the form of Tax Increment Financing (TIF), state tax credits and other tools under the state’s Economic Development Incentive Program.

Like any experienced dealmaker, Tokarczyk makes her work look easy. But the business behind the scenes is anything but simple.

BDS has worked on many of the largest expansion and retention projects in the state with companies that include Samsonite, TripAdvisor, IPG Photonics, Horizon Beverage, Keurig, New England Ice Cream, MACOM, MilliporeSigma, Moderna, Analog Devices and Waters Corporation.

Tokarczyk, who serves as a member of the AIM Board of Directors and Executive Committee, started her career as the founder and owner of an upscale women’s clothing boutique, where she honed her skills in sales and business. She took those skills in a new direction when she joined the Massachusetts Office of Business Development (MOBD) as a project manager, and later, an MOBD regional director. Recruited by Ernst & Young as manager for the New England Area State and Local Tax Incentives practice, Tokarczyk rose to become a senior manager before starting her own consulting firm.

Named 2017 Business Person of the Year by the Tri-Town Chamber of Commerce and included in the New England Real Estate Journal’s 2018 Women in Real Estate, she is passionate about achieving the best result for every client. That tireless commitment to success is what puts Tokarczyk and her team among the leading tax incentive consultants in the state. 

Onset Computer Corporation | Easton Regional Celebration, October 10, 5-7 pm, Easton Country Club

Onset Computer Corporation of Bourne has for 38 years been a technology mainstay in a region better known as a tourist destination.

Few of the thousands of vacationers who pass Onset’s 40,000-square-foot design, engineering and manufacturing facility on their way to Cape Cod beaches realize that the company is one of the world's leading supplier of data loggers, weather-station products, wireless sensors, and web-based monitoring systems.

Onset’s award-winning HOBO® data logger and weather station products are used around the world in a broad range of monitoring applications, from verifying the performance of green buildings and renewable energy systems to agricultural and coastal research. InTemp® loggers dramatically simplify the process of monitoring temperature-controlled environments by streamlining daily temperature checks and reducing the paper trail burden.

It is a business that has continued to grow and evolve since Onset began in 1981. The company now employs 160 people, a number that has risen by 15 percent during the past several years.

Data loggers are compact, battery-powered devices equipped with an internal microprocessor, data storage, and one or more sensors. They are connected to a computer, programmed by accompanying software, and then placed in the testing location - inside and outside, underground or underwater - where it records the desired measurement. Once the data is collected, the data logger is then reconnected to the computer and the software reads the data and displays the measurements in graphs and charts.

Onset's first data logger was built by Lon and Ellen Hocker in a barn behind their North Falmouth home in 1981. The business grew by word of mouth in the local scientific community, and the company quickly expanded.

Onset says its central competitive advantage is the degree to which employees are committed to a culture of continuous improvement, innovation, and customer support. The company also gives back to the community in its hometown of Bourne and beyond - employees participate in Give-A-Day-On-Onset (GADOO) by either supporting the local food pantry or another charitable foundation. 

Lampin Corporation | Worcester Regional Celebration, October 16, 5-7 pm, Mechanics Hall

Robin LeClaire knows a thing or two about the value of companies developing their own talent. After all, LeClaire was an original employee of Lampin Corporation and spent 31 years at the company before assuming the role of president two years ago.

Uxbridge-based Lampin is an employee-owned company that makes precision parts and components for some 370 major manufacturers in the aerospace, telecommunications, robotics, defense, renewable energy, medical device, optical, and laser industries. The company’s services include value engineering, precision machining,  subassemblies, laser marking, metal treatment, and finishing—individually or in combination—to quickly deliver precision parts.

“Because Lampin is 100 percent employee-owned, we have a stake in the outcome. Our employee-owners take pride in maintaining machines and seeing customer orders from start to finish. Lampin is among the select few 100 percent employee-owned manufacturing companies in the United States and the pride and quality are demonstrated in our work,” the company says.

Lampin Corporation moved to its present five-acre site in 1985. The original 4,000-square-foot building has been expanded twice and now houses 22,000 square feet of networked CNC equipment operating 24 hours a day.

Lampin employs 35 people, a number than has increased as the company has grown during the past five years.

The company was founded by Harold Fairbanks as the Laminated Pinion Gear Company in 1964. The company had a couple of owners through the years until Scott Rossiter purchased the business in 1982 and renamed it the Lampin Corporation. Rossiter in 2001 elected to sell 30 percent of the company to the employees through the Employee Stock Ownership Plan (ESOP) and subsequently sold all of the company shares to the ESOP in 2006.

LeClaire’s journey through the ranks of the company to the corner office underscores the Lampin’s commitment to promoting from within and creating educational opportunities for employees working in a complex corner of manufacturing. Lampin offers in-house training and also works with the Massachusetts Manufacturing Extension Partnership and Quinsigamond Community College to send new employees for in-depth education in manufacturing and CNC programming.

The company last year awarded six grants to students and schools in the Blackstone Valley to support programs in engineering, science and robotics. Lampin employee-owners also mentor students at the Blackstone Valley Chamber Education Hub.

Rand-Whitney Container LLC | Worcester Regional Celebration, October 16, 5-7 pm, Mechanics Hall

Rand-Whitney Container may be the largest independent manufacturer of corrugated products in New England, but don’t think the company is resting on its laurels.

Rand-Whitney in July acquired Pennsylvania-based Specialty Finance and Consulting Corporation, a manufacturer and distributor of corrugated sheets, corrugated packaging and related products and services.  The acquisition comes less than a year after Rand-Whitney invested $20 million to expand its 350,0000 square-foot complex of manufacturing, design and office complex on Rand-Whitney Way in Worcester.

Throw in millions of dollars in capital improvements to machinery and it’s clear that Rand-Whitney, part of The Kraft Group of Foxboro, intends to be the big kid on the block for years to come.

Rand-Whitney corrugated products range from simple shipping containers to custom die-cuts and high-end retail merchandisers and displays. Its protective packaging products include wood and foam to ensure even the most delicate products make it to their destination unharmed.

The company calls itself a one-stop solution for packaging needs, offering everything from engineering, design and testing to fulfillment and real-time information processing.

Rand-Whitney also places a premium on using environmentally sustainable materials.

The company owns a 100 percent post-consumer waste linerboard mill and is able to create packaging that uses a high percentage of post-consumer waste. The linerboard mill transforms more than 900 tons per day of old corrugated containers into 700 tons per day of recycled linerboard.  It the only mill in the country to do so with 100 percent post-consumer waste and water.

The Rand-Whitney Group traces its origin to 1857, when Elvira F. Dodge started a company making folding cartons in her home in Leominster. In 1938, Whitney Box of Worcester acquired Dodge Paper Box, forming the modern company. The combined entity was named Rand-Whitney.

From its beginnings the company has prided itself on family values and recognizes that its greatest asset is the employees.   Rand-Whitney aims to provide its employees with a good compensation package and a positive work environment in return for quality work. The company strives to foster a family atmosphere, boasting many employees that have worked there for decades.

The Kraft Group employs more than 5,000 people.

Interstate Electrical Services Corporation | Merrimack Valley Employer Celebration, October 24, 5-7 pm, Salvatore’s

Interstate Electrical Services, headquartered in North Billerica, is a full-service electrical contractor with offices in Connecticut, Maine, New Hampshire, Rhode Island, and Vermont.

Founded in 1966 by Pat Alibrandi with little more than a desk, a chair and a van, the company has grown to become one of the largest merit shop electrical contractors in New England with more than 600 employees and a fleet of more than 180 service vehicles. The company’s work spans the commercial, industrial, healthcare, biotech, life sciences, engineering, service and energy sectors.

Interstate Electrical Services has been named as one of the top 400 electrical contracting firms in the United States.

Interstate is a leader in construction and electrical prefabrication, with a 100,000 square-foot Operations Center in Tewksbury, that serves as a full-service prefab shop for offsite electrical component assembly. UL certification and targeted material delivery ensures consistent quality and reduces site footprint and packaging waste.

In-house project coordinators and detailers work through every phase of a project, turning coordinated construction drawings into actionable plans for material assembly, testing, and just-in-time point of installation delivery of the finished ready-to-install electrical components and systems. This opens up extensive job opportunities beyond the traditional electrician or journeyman roles.

Interstate is at the forefront of reducing the labor gap in the trades and dedicates its time and resources to entice potential employees with robust apprenticeship programs. From high school graduates to those re-entering the workforce to college students, the electrical trade can be an appealing option for those who might not have a specific degree or technical background or perhaps are looking for a second career.

Interstate’s various apprenticeship programs mean trainees have a steady job while learning through hands-on, on-site training. They also enjoy benefits like health insurance and paid time off. When an apprentice completes the program, he or she leaves debt-free and have already joined the workforce. Interstate has over 200 electrical apprentices at any given time, and they receive full pay and benefits.

Interstate’s internship and co-op programs allow students to work with trained professionals on-site to see how their interests line up with the industry. The company works with more than 25 local schools to recruit paid interns in every department, ranging from finance, to business and administration management to software detailing.

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Topics: Massachusetts economy, AIM Next Century Award, AIM Regional Celebrations

Employer Confidence Rises Despite Uncertainty

Posted by Christopher Geehern on Aug 6, 2019 8:18:48 AM

Massachusetts employers shrugged off mounting evidence of an economic slowdown during July and expressed growing confidence in both the state and national economies.

BCI.July.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 4.4 points to 62.0 last month, reaching its highest level since September. The Index has gained 0.8 points during the past 12 months and remains comfortably within optimistic territory.

The confidence surge was driven by optimism in the Massachusetts economy and a strengthening outlook among manufacturers.

“We have to be cautious in reading large month-to-month changes in the Business Confidence Index, but the fact that employers are more optimistic than they were a year ago and six months ago is a good sign,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer at the Harvard Graduate School of Design.

“With a host of seemingly conflicting indicators at play – unemployment in Massachusetts remains at a low 2.9 percent while economic growth slowed from an annualized rate of 2.7 percent to 1.4 percent during the second quarter – it will be interesting to see how employer optimism holds up for the rest of 2019.”

The AIM Index, based on a survey of more than 100 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 July confidence survey was taken after the government reported that US employers added 164,000 jobs during June and before President Donald Trump announced another round of tariffs on Chinese products.

Constituent Indicators

The constituent indicators that make up the AIM BCI all increased during July.

The Massachusetts Index assessing business conditions within the commonwealth surged 7 points to 68.2 while the US Index rose 4.6 points to 62.6. The Massachusetts reading has risen 3.1 points and the US reading 0.7 points during the past 12 months.

The Future Index, measuring expectations for six months out, rose 4.6 points to 60.8, leaving it 2.1 points higher than a year ago. The Current Index, which assesses overall business conditions at the time of the survey, gained 4.2 points to 63.2, virtually even with its reading of July 2018.

The Employment Index gained 1.9 points for the month and 0.2 points for the year. Employers continue to struggle to find qualified workers in a full-employment state economy facing a demographic challenge as baby boomers leave the work force.

Non-manufacturers (63.6) were more confident than manufacturers (60.5), who remain concerned about the consequences of tariffs and trade tensions. Small companies (65.2) were more confident than large companies (58.9) or medium-sized companies (62.3). Companies in Eastern Massachusetts (63.3) continued to be more optimistic than those in the west (59.8).

Michael D. Goodman, Executive Director of the Public Policy Center at UMass Dartmouth, and a BEA member, said business confidence remains volatile amid a swirl of economic and political issues ranging from trade to the availability of qualified workers.

“Employer optimism may reflect the fact that the Massachusetts economy should be somewhat insulated during these final stages of the economic expansion by a unique industry mix dominated by technology and innovation companies,” Goodman said.

Wrong Time to Raise Costs

AIM President and CEO John R. Regan, also BEA member, said Massachusetts employers already burdened with business and compliance costs could face more of the same soon as the state Legislature debates ways to raise revenue for big-ticket issues such as transportation and education.

“Beacon Hill is awash with calls for more revenue. But the slowing of the economy during the second quarter means this is exactly the wrong time to place additional cost burdens on business,” Regan said.

“If the economy goes into a downturn while costs are increasing that will create big challenges for employers.”

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

Employer Confidence Stabilizes in June

Posted by Christopher Geehern on Jul 9, 2019 8:46:46 AM

Employer confidence stabilized in Massachusetts during June despite a continued swirl of conflicting economic and political signals around the globe.

BCI.June.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 0.5 points to 57.6 last month, rebounding from a May drop that left it at its lowest level since October 2016.

The Index has declined 3.7 points since June 2018 but remains within optimistic territory. And though confidence levels are virtually unchanged since January, the AIM Index reflects constantly changing headlines about international trade, economic growth and the direction of interest rates.

“We’re seeing confidence go up one month and down the next in the same way that financial markets have been whipsawed by almost daily changes in the economic outlook,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Employers remain concerned about the prospect of an economic slowdown but were encouraged at the end of June by larger-than-expected job growth numbers, signs of a thaw in the US/China trade battle and signals that the Federal Reserve might ease interest rates.”

Tariffs continue to influence employer confidence.

“Have seen cost increases for construction materials due to the effect of tariffs. This is creating some uncertainty in the pricing of new construction projects,” one member wrote.

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 AIM BCI were mixed during June.

The Massachusetts Index assessing business conditions within the commonwealth rose 0.3 points to 61.2 while the US Index rose a full 3 points to 58.0. The Massachusetts reading has declined 1.6 points during the past 12 months and the US reading has dropped 2.0 points during the same period.

The Future Index, measuring expectations for six months out, rose slightly, 0.2 points to 56.2. The Current Index, which assesses overall business conditions at the time of the survey, gained 0.8 points to 59.0, 4.5 points lower than a year ago.

The Employment Index declined 0.4 points for the month and 2.2 percent for 12 months. Analysts say employers continue to struggle to find qualified workers in a state economy with a 2.9 percent jobless rate.

Non-manufacturers (60.1) were more confident than manufacturers (54.4), who have seen their confidence levels drop 8.1 percent since June 2018. Large companies (59.0) were more confident than small companies (58.4) or medium-sized companies (55.6). Companies in Eastern Massachusetts (58.5) continued to be more optimistic than those in the west (56.3).

Elliot Winer, Chief Economist, Winer Economic Consulting, LLC, and a BEA member, said continuing weakness in the Company Index, Manufacturing Index and Employment Index underscores some of the long-term challenges facing Massachusetts employers beyond the day-to-day headlines.

“Hiring and retaining skilled employees is becoming a barrier to expansion for some companies. The short-term issues affecting confidence will eventually be overshadowed by the long-term demographics of having large numbers of baby boomers leave the work force,” Winer said.

State Policy Gains

AIM President and CEO John R. Regan, also BEA member, said that Governor Charlie Baker and the Massachusetts Legislature have made several decisions recently that boosted employer confidence. Those decisions included postponing the start of contributions for paid family leave and allowing the MassHealth assessment to lapse as scheduled in December.

“Employer have been encouraged by the willingness of state policymakers to meet businesses halfway on some of these complex issues,” Regan said.

“Our hope is that lawmakers will continue this mindful approach to the economy.”

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

Income Surtax Would Drive Out Employers, Revenue

Posted by Christopher Geehern on Jun 11, 2019 1:41:59 PM

StateMigration

 

As Massachusetts lawmakers gather tomorrow for another attempt to impose a massive income surtax on family business, a new analysis by Bloomberg news demonstrates the devastating impact of tax increases on economic activity.

Data from the Internal Revenue Service and the Census Bureau shows that business owners and entrepreneurs are heading for the exits in high-tax states and bringing their income to states such as Florida and South Carolina.

Bloomberg found that Connecticut, New York and New Jersey face the largest financial drains from the 5 million Americans who move from one state to another each year. Connecticut lost the equivalent of 1.6 percent of its adjusted gross income, according to Bloomberg, because the people who moved out of the Nutmeg state had incomes that were 26 percent more, on average, than those people who moved in.

Moreover, “leavers” outnumbers “stayers” by a five-to-four margin.

Massachusetts suffered a net loss of $1.4 billion in adjusted gross revenue from people moving in and out of the commonwealth. New York lost $8.4 billion and New Jersey, which recently adopted its own version of the so-called Millionaires Tax, lost $3.4 billion.

Florida posted a net income influx of nearly 3 percent of the state’s adjusted gross income in 2016. South Carolina, Idaho and Oregon were also among the largest gainers in the interstate shuffle, according to Bloomberg.

“The income surtax constitutional amendment to be debated tomorrow takes direct aim at owners of small and family owned business in Massachusetts. That sort of unfair tax would clearly accelerate the departure of the very people we need to maintain our economic growth,” said John Regan, President and CEO of Associated Industries of Massachusetts.

AIM opposes income surtax

A graduated income tax would take an estimated $2 billion each year from some 17,000 Main Street businesses and others that pay taxes at the individual rate. These companies are already drowning in more than $1.5 billion in new taxes and fees to pay for a financial shortfall in the Medicaid program and to fund the new paid family and medical leave program.

The data on our-migration from high-tax states is consistent with other studies of tax policy.

Connecticut in 2009 added a 6.5 percent income tax bracket for those earning more than $500,000 per year. The state followed up with a comprehensive $1.5 billion tax increase in 2011 to deal with a budget shortfall. A final round of tax increases took effect in 2015.

According to information compiled by Pew Charitable Trusts, tax revenue for all 50 states is averaging 6.3 percent higher than it was at the start of the 2008 recession. Connecticut tax revenue, on the other hand, is only 3.8 percent higher, despite the three tax increases.

Once the economic heavyweight of New England, Connecticut is the only state in the nation that has yet to recover the jobs lost during the economic downturn.

Income surtax laws have failed in other states as well.

Within three years of Maryland enacting its millionaires tax, 40 percent of the state’s seven-figure earners were gone from the tax rolls - and so was $1.7 billion from the state tax base.

Boston College researchers studied the migration of wealthy households to and from New Jersey. They concluded that wealthier New Jersey households did in fact consider the high-earner taxes when deciding whether to move to or remain in New Jersey.

The researchers’ data analysis found that from 1999 to 2003 - before the millionaires’ tax was imposed - there was a net influx of $98 billion in household wealth into the state. After the tax was implemented, an increasing number of wealthy families left the state, resulting in a loss of $70 billion in wealth.

Want updates on the income surtax debate? Contact Brad MacDougall, Vice President of Government Affairs at AIM, bmacdougall@aimnet.org.

Topics: Massachusetts economy, Income Surtax, Taxation

Employer Confidence Falls in May

Posted by Christopher Geehern on Jun 4, 2019 8:30:00 AM

Employer confidence weakened in Massachusetts during May amid renewed trade tensions and concerns among companies about increased operating costs from paid family leave and other government mandates.

BCI.May.2019The outlook among business leaders has moved in a narrow, overall optimistic, range for much of 2019.

The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 3.2 points last month to 57.1, its lowest level since October 2016. The Index has declined 9.5 points since May 2018.

All of the constituent indicators that make up the BCI weakened during May with the largest drop coming in employer views of conditions six months from now.

The erosion of confidence during the past 12 months has been driven largely by caution about the national economy and concern among manufacturing companies.

“The Business Confidence Index continues to reflect the Goldilocks economy in which we find ourselves – US GDP growth is expected to remain at a modest level of 2 to 3 percent and there is not much inflation or deflation. There are both encouraging signs and red flags,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

Several employers participating in the survey said regulatory costs have become a significant concern.

“The cost to operate has increased dramatically - higher wages, benefit costs, supply costs and cost of compliance with all the new regulations coming out of State House,” one employer wrote.

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 showed a broad-based retrenchment during May.

The Massachusetts Index assessing business conditions within the commonwealth fell 2.3 points to 60.9, while the US Index shed 3.3 points to 55.0. The Massachusetts reading has declined 9.1 points during the past 12 months and the US reading has dropped 14.3 points during the same period.

The Future Index, measuring expectations for six months out, tumbled 4.5 points to 56.0. The Current Index, which assesses overall business conditions at the time of the survey, lost 1.8 points to 58.2, 8.4 points lower than a year ago.

The Employment Index declined 1.2 points for the month and 5.1 percent for 12 months. Analysts say employers continue to struggle to find qualified workers in a state economy with a 2.9 percent jobless rate.

Non-manufacturers (60.0) were more confident than manufacturers (54.7). Small companies (58.4) were more bullish than large (55.0) or medium-sized companies (57.6), a reversal of the usual pattern. Companies in Eastern Massachusetts (59.3) continued to be far more optimistic than those in the west (54.0).

Elmore Alexander, Retired Dean of the Ricciardi College of Business at Bridgewater State University and a BEA member, said Massachusetts employers are reflecting general concerns about tepid national economic growth, renewed geopolitical tensions and slowing corporate spending.

“Few see an imminent recession, but most experts believe US economic growth will slow from 3 percent last year to 2.1 percent this year to 1.9 percent in 2020,” Alexander said.

Rising Costs

AIM President and CEO John R. Regan, also BEA member, said the national economic uncertainty comes at a time when Massachusetts employers are struggling with a series of expensive new employment law mandates such as the state’s $1 billion paid family and medical leave program.

“AIM has joined Raise Up Massachusetts and other groups in asking the Baker Administration to delay the scheduled July 1 start of paid leave by three months to provide employers time to consider how much of the cost they will share with workers and whether they wish to opt out of the state system. The delay is necessary to ensure a smooth rollout of this new entitlement,” Regan said.

Regan joined the BEA after being named President and Chief Executive Officer of AIM.

Topics: International Trade, AIM Business Confidence Index, Massachusetts economy

Employer Confidence Rises in April

Posted by Christopher Geehern on May 8, 2019 8:55:23 AM

Massachusetts employers grew more confident during April as the state and national economies regained their footing.

BCI.April.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 2.4 points to 60.3 last month. Confidence remains well within optimistic territory, though still 3.9 points below its strong reading of April 2018.

The April 2019 increase reflected growing employer optimism about economic prospects for the next six months and about the future of their own companies.

All of the constituent indicators that make up the BCI rose during April with one notable exception. The Employment Index fell 1.5 points to 54.4, suggesting that employer sentiment continues to be tempered by a persistent shortage of qualified workers.

“The Business Confidence Index continues to show a conflict between short-term economic optimism and long-term concern about the prospect of finding enough appropriately skilled workers to run Massachusetts businesses,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“The immediate news for employers is positive as economic growth in Massachusetts surged to an annual rate of 4.6 percent during the first quarter of 2019 and US growth came in at 3.2 percent.”

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 showed a broad-based strengthening of confidence during April.

The Massachusetts Index assessing business conditions within the commonwealth rose 1.5 points to 63.2, while the US Index gained 2.8 points to 58.3. The Massachusetts reading has declined 0.9 points during the past 12 months and the US reading has dropped 5.6 points during the same period.

The Future Index, measuring expectations for six months out, surged 3.1 points to 60.5. The Current Index, which assesses overall business conditions at the time of the survey, rose 1.7 points to 60.0, still 5.1 points lower than a year ago.

The decline in the Employment Index left that measure 5.4 points lower than in April 2018. One good sign for job seekers is that the Sales Index, a key predictor of future business activity, rose 3.9 points during the month.

Non-manufacturers (64.1) were more confident than manufacturers (57.3). Large companies (60.7), medium-sized companies (60.5) and small companies (59.7) all had similar confidence outlooks. Companies in Eastern Massachusetts (64.5) continued to be far more bullish than those in the west (55.5).

Edward H. Pendergast, Managing Director of Dunn Rush & Co. and a BEA member, said employer confidence reflects first-quarter economic growth that was stronger than most experts anticipated. That growth sent US stocks to record highs in April before this week’s selloff.

“The consensus on Wall Street is for slowing growth as the year progresses, but the economy is setting a solid and predictable pace that reassures employers that there is little immediate threat of recession,” Pendergast said.

Training and Education

AIM President and CEO Richard C. Lord, also BEA member, said the sluggish Employment Index underscores the urgency for business and government to collaborate on ways to train and educate the workers who will drive the economy in the future.

“The persistent shortage of workers will become more severe as large numbers of baby boomers continue to leave the work force. It is imperative that we address the next generation of workers, so we can extend opportunity broadly to the people of Massachusetts.”

Lord’s commentary is his final one before retiring as President of AIM next week.

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

AIM Honors Wayfair with 2019 Vision Award

Posted by Christopher Geehern on Apr 29, 2019 8:00:00 AM

Wayfair Inc., a Massachusetts-born technology company that has redefined how people shop for their homes, is the recipient of the 2019 Vision Award from Associated Industries of Massachusetts (AIM). Wayfair has more than 5,500 full-time employees in the commonwealth and continues to grow its presence in Boston and beyond.

WayfairFounded in 2002 when engineers Niraj Shah and Steve Conine started selling stereo racks over the Internet, Wayfair has grown into one of the world’s largest online destinations for the home. The company currently offers 14 million products from 11,000 suppliers and last year generated $6.8 billion in net revenue.

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

The largest employer association in Massachusetts will present the award at its Annual Meeting on May 17 in Boston. Attorney General Maura Healey will deliver the keynote address.

“The 3,500 member employers of AIM are delighted to honor a company that was launched in Massachusetts and continues to create economic opportunity from one end of the commonwealth to the other,” said AIM President and Chief Executive Officer Richard C. Lord, who noted that the Pittsfield Wayfair facility is expected to employ 300 people.

“Wayfair is the prototype of the economic growth we love to see – a company with deep local roots that uses technology and great management to dominate a global market.”

In addition to growing its corporate headquarters in Massachusetts, Wayfair has also recently announced it will open its first-ever full-service physical retail store in the Natick Mall later this year.

“We are proud to have built our business in the Commonwealth of Massachusetts and delighted to accept the 2019 Vision Award from Associated Industries of Massachusetts,” said Shah, who is a native of Pittsfield.

The company has also become a major player in the community, structuring its social responsibility efforts around creating safe and comfortable living spaces for people in need. It maintains charitable partnerships with Habitat for Humanity, Homes For Our Troops, and other organizations.

Wayfair will join a distinguished list of AIM Vision honorees, including Fidelity Investments Chief Executive Abigail Johnson, Woods Hole Oceanographic Institution, General Electric, Bright Horizons Family Solutions, MassMutual, philanthropists Bill and Joyce Cummings, Boston University brain researcher Dr. Ann McKee and Nuance Communications.

AIM is the statewide business association in Massachusetts, representing the interests of employers form all sectors of the economy on public-policy issues.

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

Employer Confidence Slips in March

Posted by Christopher Geehern on Apr 2, 2019 8:30:59 AM

Business confidence weakened slightly in March amid signs of both a cyclical global slowdown and persistent demographic factors limiting the growth of the labor force in Massachusetts.

BCI.March.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 0.3 points to 57.9 during March. Confidence remains within optimistic territory but has lost 5.6 points during the past 12 months.

The decrease reflected employer concerns about economic prospects for the next six months. Those concerns outweighed growing optimism among manufacturing companies and rising confidence in the Massachusetts economy.

The March Business Confidence survey took place as the government announced that Massachusetts created only 20,000 jobs during 2018 instead of the 65,500 previously estimated. The US Bureau of Labor Statistics reports that average payroll job growth in Massachusetts fell from 1.3 percent in 2017 to 0.9 percent last year.

“Massachusetts employers continue to struggle with the challenges of a full-employment economy complicated by demographic issues such as the retirement of large numbers of baby boomers,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“U.S. economic growth appears to be slowing, as well as world economic growth, but recession fears are still low.”

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 moved in a narrow range during March.

The Massachusetts Index assessing business conditions within the commonwealth gained 0.9 points to 61.7. Confidence in the Massachusetts economy has declined 6.1 points since March 2018.

The U.S. Index measuring employer sentiment about the national economy slipped 0.5 points to 55.5, leaving it 9.7 points less than a year ago.

Employers were slightly more optimistic about current conditions than about the future. The Current Index, which assesses overall business conditions at the time of the survey, rose 0.6 points to 58.3 while the Future Index, measuring expectations for six months out, fell 1.3 points to 57.4. The Future Index has fallen 7.0 points during the past 12 months.

The Employment Index, measuring employer optimism about hiring, rose 1.2 points to 55.9.

Non-manufacturers (60.6) were more confident than manufacturers (55.4). Small companies (60.8) were more optimistic than large companies (55.2) or medium-sized companies (57.5). Companies in Eastern Massachusetts (60.0) continued to be more bullish than those in the west (55.0).

Northeastern University professor Alan Clayton-Matthews, a BEA member, said the downward revision of the Massachusetts job-growth numbers was consistent with demographic trends such as the large number of baby boomers retiring from the work force.

“The last New England Economic Project forecast projected a slowdown in payroll job growth from 1.7 percent in 2017 to 1.1 percent in 2018 and 0.6 percent in 2019 and a slowdown in labor-force growth from 1.6 percent in 2017 to 0.6 percent in 2018 and 0.4 percent in 2019. This forecast was largely based on demographic projections assuming a full-employment economy,” said Clayton-Matthews.

“The state economy seems to be running at full capacity, and the basic state indicators don’t suggest a lack of demand, though it’s hard to spot turning points until there is enough hindsight.”

Mixed Signals

AIM President and CEO Richard C. Lord, also BEA member, said employers remain concerned as Beacon Hill lawmakers undertake a broad discussion of how to fund expensive policy priorities such as transportation infrastructure, public education and clean energy. He noted that AIM will be part of a group assembled by the state Senate to look at the Massachusetts tax code.

“AIM undertakes these debates conscious of the oppressive cost burdens already facing Massachusetts employers. Massachusetts must develop a fair strategy to address its spending needs without harming employers who are already struggling to implement a $1 billion paid family and medical leave program along with the rising cost of both health insurance and energy,” Lord said.

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

Business Confidence Rebounds in February

Posted by Christopher Geehern on Mar 5, 2019 8:30:00 AM

Business confidence rebounded modestly during February as optimism about the state and national economies outweighed a darkening outlook among Massachusetts manufacturers.

BCI.February.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 0.5 points to 58.2 after dropping in January to its lowest level since October 2016. Confidence remains within optimistic territory but has lost 6.8 points during the past 12 months.

The February increase was driven by a 3.4-point jump in employer views of the state economy and a 3.3-point rise for the national economy. The government announced last week that the US economy grew at a 2.9 percent rate in 2018, matching 2015 as the biggest increase since the end of the 2007-2009 Great Recession.

“Employers remain generally optimistic about a state economy that continues to run at full-employment levels and a US economy that is projected to grow by 2.2 percent this year” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“At the same time, the erosion of confidence among Massachusetts manufacturers during the past 12 months raises some concern about the long-term sustainability of the recovery.”

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 higher during February.

The 3.4-point increase in the Massachusetts Index assessing business conditions within the commonwealth left that indicator at 60.8. Confidence in the Massachusetts economy has declined 7.7 points since February 2018.

The U.S. Index measuring employer sentiment about the national economy rose to 56.0, its highest level since November. The reading was still 10.9 points less than a year ago.

Employer views about the future were more optimistic than the present for the first time in 11 months. The Current Index, which assesses overall business conditions at the time of the survey, fell 0.5 points to 57.7 while he Future Index, measuring expectations for six months out, increased 1.5 points to 58.7.

Non-manufacturers (61.7) were significantly more confident than manufacturers (53.3). Large companies (62.3) were more optimistic than either medium-sized companies (57.1) or small companies (55.2). Companies in Eastern Massachusetts (59.6) continued to be more bullish than those in the west (56.3).

“Employers last month welcomed several developments, including the end of the government shutdown and the Federal Reserve’s decision to pause increases in interest rates,” said Sara L. Johnson, Executive Director, Global Economics, IHS Markit and Vice Chairwoman of the BEA.

“The overall picture of business confidence reflects the economy itself – slowing a bit but still strong overall.”

Mixed Signals

AIM President and CEO Richard C. Lord, also BEA member, said the comments provided by employers on the February AIM Business Confidence Index Survey show that many companies remain bullish about 2019, while others remain concerned about issues ranging from gridlock in Washington to the persistent shortage of skilled employees.

“There are plenty of mixed signals 10 years into the economic recovery,” Lord said.

“Massachusetts employers face rising wage costs, rising raw-material costs and the challenge of integrating new public-policy mandates such as an increased minimum wage and paid family and medical leave. It’s the right time in the business cycle for state and federal government to follow the lead of the Federal Reserve and pause the imposition of expensive new initiatives.”

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Business Confidence Slides Again in January

Posted by Christopher Geehern on Feb 12, 2019 8:30:00 AM

Stabilizing financial markets and continued strong employment were not enough to brighten the outlook of Massachusetts employers during January as business confidence fell for the fifth time in seven months.

BCI.January.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 0.9 points to 57.7, its lowest level since October 2016. Confidence has dropped 6.4 points during the past 12 months.

The retreat was led by a 7.3-point drop in employer views of the Massachusetts economy, and a 2.4-point drop in opinions about the national economy.

Overall confidence remains within optimistic territory, but every element of the AIM Index is now lower than it was a year ago.

A separate survey within the January Business Confidence Index found that while 71 percent of Massachusetts employers have seen some effect from the US government’s imposition of tariffs on goods form China and other nations, only 10 percent of companies characterize the effect as “significant” or a threat to the existence of their business.

The most common consequence of the tariffs has been an increase in raw-material prices, followed by changes to the supply chain, supply interruptions, products affected by retaliatory tariffs and loss of overseas customers.

“The Massachusetts economy grew at 2.1 percent during the fourth quarter of 2018 and continues to operate at near full capacity,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“At the same time, employers continue to confront uncertainty surrounding trade policy, demographic constraints on the labor market and the implementation of a sweeping paid family and medical leave program in Massachusetts.”

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 January.

The 7.3-point drop in the Massachusetts Index assessing business conditions within the commonwealth left that indicator at 57.4. Confidence in the Massachusetts economy has declined 11.5 points since January 2018.

The U.S. Index measuring employer sentiment about the national economy dropped 2.4 points to 52.7, a decline of 12.1 points year-over-year. It marked the lowest reading for the U.S. Index since November 2016.

The Current Index, which assesses overall business conditions at the time of the survey, fell 1.8 points to 58.2. The Future Index, measuring expectations for six months out, remained flat at 57.3 but has declined 9.3 points over 12 months.

Manufacturers (57.8) and non-manufacturers (57.7) were equally confident. There was also little difference in the confidence readings reported by large companies (57.9), medium-sized companies (57.7) and small companies (57.6). Companies in Eastern Massachusetts (59.4) were more bullish than those in the west (55.3).

Economist Barry Bluestone, retired Professor of Public Policy and Urban Affairs at Northeastern University and a member of the BEA, suggested that employers face two parallel sets of challenges - uncertainty about political issues such as tariffs and a more fundamental uncertainty about the limits of a full-employment state economy. He noted that wage and salary income growth was strong in the fourth quarter, rising 7.2 percent in Massachusetts on an annualized basis.

“A 3.3 percent unemployment rate, combined with an aging population and slow labor force growth will challenge the ability of Massachusetts employers to expand during 2019 and beyond,” Bluestone said.

Piling On Costs

AIM President and CEO Richard C. Lord, also BEA member, said the significant weakening of confidence in the Massachusetts economy also reflects frustration among employers with a cascade of expensive new state mandates, including a two-year MassHealth assessment, an increase in the minimum wage and the impending start of paid family and medical leave.

“We hear frequently from Massachusetts employers who feel under siege from both the sheer expense of these programs and the administrative burden they place on companies, particularly smaller companies,” Lord said.

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

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