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Business Confidence Hits Another High for 2017

Posted by Christopher Geehern on Nov 7, 2017 8:27:44 AM

Employer confidence in Massachusetts hit another high for 2017 during October as economic growth accelerated and companies remained optimistic about the national outlook.

BCI.October.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) edged up 0.3 points to 62.7, leaving it 6.5 points better than in October 2016. The uptick was driven by a brightening view of employment growth and firming confidence among manufacturers.

The reading came as MassBenchmarks reported that the Massachusetts economy grew at 5.9 percent during the third quarter, almost double the rate of the national economy. Payroll employment grew at a 2.1 percent annual rate in Massachusetts in the third quarter as compared to 1.2 percent nationally.

“The acceleration of the Massachusetts economy in the third quarter provided additional fuel to an already solid sense of confidence among employers as we head for 2018,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“At the same time, optimism about the national economy suggests that employers believe growth rates throughout the US will increase even more if Congress follows through on its proposal to lower the corporate tax rate from 35 percent to 20 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 that make up the overall Business Confidence Index pointed mostly higher during October.

The Massachusetts Index, assessing business conditions within the commonwealth, slipped 0.3 points to 65.1, still 4.1 points more than a year earlier. October marked the 91st consecutive month in which employers have been more optimistic about the Massachusetts economy than the national economy.

The U.S. Index of national business conditions rose 2.7 points to 62.5, continuing a 13.3-point surge for the 12-month period. 

The Current Index, which assesses overall business conditions at the time of the survey, increased 0.7 points to 63.6 while the Future Index, measuring expectations for six months out, remained even at 61.9 points. The Current Index has risen 7.6 points and the Future Index 5.6 points during the past year.

Operational Views

The Company Index, reflecting overall business conditions, lost 0.3 points to 62.0. There was better news in the Employment Index, a key predictor of economic health, which rose 2.0 points to 57.8.

“The Massachusetts economy continues to grow at a robust pace and to add jobs in a broad array of sectors despite tightening regional labor markets. With the statewide unemployment rate now below four percent, it is not clear the commonwealth’s economic expansion is sustainable at its current pace,” noted Professor Michael D. Goodman, Executive Director of the Public Policy Center (PPC) at UMass Dartmouth and a BEA member.
Massachusetts Concerns

AIM President and CEO Richard C. Lord, a BEA member, said employer optimism continues to be tempered by the prospect of three potentially destructive ballot questions appearing on the 2018 state election ballot.

“Massachusetts employers face an unprecedented public-policy crisis as activists seek to place three questions on the 2018 Massachusetts election ballot that would together impede economic growth for a generation: a surtax on incomes of more than $1 million, an expansive and bureaucratic paid family leave program and an increase in the minimum wage,” Lord said.

“Having just honored 16 Massachusetts employers for creating jobs and economic opportunity for the people of Massachusetts, AIM remains concerned about ballot questions that are clearly intended to be punitive toward employers.”

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

Employers Renew Commitment to Pay Equity

Posted by Joanne Hilferty on Oct 20, 2017 8:30:00 AM

Editor's Note - Joanne Hilferty is President and Chief Executive Officer of Morgan Memorial Goodwill Industries in Boston and a member of the AIM Board of Directors.

Massachusetts employers say they are committed to accelerating the modest progress they have made to close the gender pay gap.

Fourpeople.jpgScores of business leaders shared challenges and success stories recently at the third annual Boston Women’s Workforce Council (BWWC) Best Practices Conference at the Colonnade Hotel in Boston. Associated Industries of Massachusetts is a signatory to the Boston 100 Percent Talent Compact developed by the Council, Boston University and the City of Boston to ensure that men and women enjoy equal compensation opportunities in the work force.

Several prominent members of AIM have also signed the document, including Blue Cross Blue Shield of Massachusetts, Boston Children’s Hospital, Eastern Bank, Eversource, Harvard Pilgrim, MassMutual, MORE Advertising, National Grid, Putnam Investments, Staples and State Street Corporation. I am proud to say that the organization I lead, Morgan Memorial Goodwill Industries, is also a signatory.

Companies that sign the compact commit to reviewing their compensation practices to ensure fairness. These companies provide compensation data anonymously to researchers at Boston University who use it to develop a broad assessment of wage equality in Massachusetts. 

“AIM signed the Compact because Massachusetts employers operate in a competitive, talent-driven economy in which companies that reward skilled workers equally will come out on top,” said Rick Lord, President and Chief Executive Officer of AIM.

“Wage equity will ultimately be driven by the marketplace, which is desperately short of the employees needed to drive economic growth in the next decade.”

The 2017 Best Practices Conference drew more than 220 participants.

Business leaders noted that companies looking at signing the compact have expressed concern about the need to guarantee the confidentiality of any compensation data they provide to the project. Council executives say they can guarantee confidentiality but need to better communicate that point to employers.

The conference also provided an opportunity for the BWWC’s Co-Chairs, Cathy Minehan and Evelyn Murphy, to share the highlights from the 2017 data analysis, the full results of which will be published in the organization’s 2017 report, out later this year.  The key takeaway was that there has been some progress – albeit limited – in addressing the wage gap.

Governor Charlie Baker last year signed a compromise pay-equity law that is intended to promote salary transparency while recognizing legitimate market forces such as performance and the competitive landscape for certain skills that cause pay differences among employees.  AIM supported the compromise.

Topics: Employment Law, Massachusetts employers, wage equity

Employer Confidence Rebounds

Posted by Christopher Geehern on Oct 3, 2017 9:05:54 AM

Massachusetts employers are as optimistic as they have been all year about the overall economy and prospects for their own businesses.

BCI.September.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) broke a two-month slide in September, rising 1.2 points to 62.4. The reading equaled its high for 2017 and was 6.5 points better than a year ago.

Employer confidence has moved in a narrow range so far in 2017 as employers appear bullish about the growth prospects of their companies. The September uptick was driven in part by a 5.7-point surge in the sales index, which is often a leading indicator of increased business activity.

“The Index was also taken prior to the announcement of an effort by Congressional Republicans and the White House to significantly reduce corporate taxes, a move that enjoys broad support among employers,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“The prospect of tax reform and tax simplification is likely to buoy employer sentiment through the end of the year.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The Index has remained above 50 since October 2013.

The constituent indicators that make up the overall Business Confidence Index were generally higher during September.

The Massachusetts Index, assessing business conditions within the commonwealth, rose 2.2 points to 65.4, a reading that was 8.4 points higher than in September 2016.

The U.S. Index of national business conditions dropped 0.4 points to 59.8 after surging more than 10 points during the previous 12 months. September marked the 90th consecutive month in which employers have been more optimistic about the Massachusetts economy than the national economy.

The Current Index, which assesses overall business conditions at the time of the survey, increased 1.6 points to 62.9 while the Future Index, measuring expectations for six months out, rose 0.7 points to 61.29 The Future Index ended the month 5.9 points higher than a year ago.

The Company Index, reflecting overall business conditions, gained 1.4 points to 62.3. The employment Index fell 2.2 points to 55.8, continuing an up-and-down pattern within the mid-50s on the 100-point scale.

“The Massachusetts economy continues to maintain a steady recovery, with employers adding 10,800 jobs during August and the state jobless rate declining to 4.2 percent,” said Elmore Alexander, Dean, Ricciardi College of Business, Bridgewater State University, and a BEA member.

“The surge in the AIM Sales and Future indices suggests that business activity may actually accelerate in coming months, so the primary challenge for employers will remain hiring and retaining skilled workers in a tight labor market.”

AIM President and CEO Richard C. Lord, a BEA member, said employers generally support federal initiatives to reduce business taxes, but also remain concerned about the potential effect those reductions might have on the federal deficit.

It is ironic, Lord said, that the proposed Republican tax plan would lower levies for subchapter S corporations and other small pass-through businesses, while Massachusetts voters may be voting on a surtax next year on those same companies.

“Subchapter s corporations and other companies that pay taxes on the individual level are generally small to medium-sized enterprises that form the heart of the Massachusetts economy. What a shame it would be if the federal government were to help these companies while Massachusetts penalizes them,” he said.

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

AbbVie - Employer Remains Determined to Make a Difference

Posted by Christopher Geehern on Oct 2, 2017 3:25:52 PM

Editor's note: The global pharmaceutical company AbbVie will receive a 2017 AIM Next Century Award on Thursday at the association's annual employer celebration from 4:30-6:30 at Mechanics Hall in Worcester. AbbVie's 450,000-square-foot Worcester facility employs approximately 900 employees who primarily focus on immunology drug research, protein engineering, and small-batch manufacturing of biotech drugs for clinical trials.

 

Register for the Worcester Celebration

Topics: Massachusetts employers, Technology, AIM Next Century Award

AIM Vision Awards | WHOI Makes Massachusetts Global Center of Ocean Science

Posted by Christopher Geehern on May 10, 2017 10:45:10 AM

Associated Industries of Massachusetts last week presented the second annual Vision Awards, which honor the accomplishments of companies and individuals who have made unique contributions to the economy and citizens of Massachusetts.

One of three 2017 Vision Awards went to Woods Hole Oceanographic Institution (WHOI) and its Director and President, Mark Abbott.

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

Here is their story...

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

AIM Vision Awards | Bright Horizons Helps Employers, Employees Balance Complex Work/Life Issues

Posted by Christopher Geehern on May 9, 2017 1:43:52 PM

Associated Industries of Massachusetts last week presented the second annual Vision Awards, which honor the accomplishments of companies and individuals who have made unique contributions to the economy and citizens of Massachusetts.

One of three 2017 Vision Awards went to Bright Horizons Family Solutions of Watertown and its co-founder, Linda Mason. Bright Horizons has forged a trusted global presence as an indispensable resource for employers and their workers seeking to address an increasingly complex array of work-life issues.

Here is their story...

 

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

AIM Vision Award | Financial Services Pioneer Fidelity Continues to Innovate

Posted by Christopher Geehern on May 8, 2017 11:00:00 AM

Associated Industries of Massachusetts last week presented the second annual Vision Awards, which honor the accomplishments of companies and individuals who have made unique contributions to the economy and citizens of Massachusetts.

One of three 2017 Vision Awards went to financial services pioneer Fidelity Investments and its Chairman and Chief Executive Officer, Abby Johnson.

Fidelity has used innovation and an unrelenting focus on customer service to mold itself into a diversified financial services firm that is a leader in personal investing, workplace investing, and tools and services for financial intermediaries.

Here is their story:

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

State Readies New Rules on Background Checks

Posted by Brad MacDougall on Apr 13, 2017 10:55:07 AM

Editor’s note:  The following blog was written by Jean M. Wilson, Barry J. Miller, and Alison Silveira of Seyfarth Shaw, which is a member of AIM’s HR-Labor and Employment Law Committee. 

The Massachusetts legislature passed sweeping reform in May 2012 to the commonwealth’s Criminal Offender Record Information (CORI) law, which regulates the ability of employers to conduct criminal background checks.

ScalesofJusticeVerySmall.jpgNow, prompted by Governor Charlie Baker’s regulatory reform initiative, the Department of Criminal Justice Information Services (DCJIS) has new rules for the CORI law.  Several of these changes will require employers to alter their approach to criminal history checks:

  1. Who is an Employee? The regulations expand the definition of employee to include not only traditional employees and volunteers, but also contractors, subcontractors, vendors, and special state, county or municipal employees. DCJIS has, in effect, broadened the definition of employee well beyond its traditional meaning, and in a manner that is at odds with the definition of this term under other state and federal laws, leading to possible uncertainty for employers

  2. What is CORI? The prior regulations did not define “Criminal Offender Record Information,” beyond a list of examples of information included or excluded from the system.   The regulations now define CORI, but the definition leaves uncertainty as to what information, outside of that specifically provided by DCJIS, is inlcuded.  The regulations also now specifically exclude from the definition of CORI information related to criminal proceedings that were initiated against an individual before the individual turned 18, unless the individual is adjudicated as an adult.  Prior to the revisions, this threshold was 17.

  3. “Need to Know” List and New iCORI Agency Agreement - The revised regulations require employers to enter into an iCORI Agency Agreement prior to obtaining and/or renewing electronic access to the iCORI system. The iCORI Agency Agreement will, at a minimum, include the employer’s representation that:  (1) it will comply with the CORI laws and regulations; (2) it will maintain an up-to-date “need to know” list of staff that the employer has authorized to request, receive or review CORI information and to provide all staff on the “need to know” list with all CORI training materials; (3) it will only request the level of CORI access authorized under statute or by the DCJIS; and (4) it will be liable for any violations of the CORI law or regulations, and that individual users of the employer’s iCORI account may also be liable for violations of the CORI law or regulations.  The DCJIS has not yet issued the iCORI Agency Agreement. 

  4. CORI Acknowledgment Forms - DCJIS has made several changes to the regulations that affect the collection, use and destruction of CORI Acknowledgment Forms.

  5. Storing CORI in the Cloud - DCJIS now permits employers to store CORI using cloud storage methods.  DCJIS requires employers using cloud storage to have a written agreement with the provider and that the storage method provide for encryption and password protection.

  6. Additional Information for Pre-Adverse Action Notices - Employers who contemplate adverse action against an employee because of information in a CORI report obtained through DCJIS are currently required to provide the subject of that report with certain information, including identifying the information in the report that is the basis for potential adverse action. 

  7. Obtaining CORI from Background Screening Companies: The regulations continue to allow background screening companies to obtain CORI on behalf of employers, but maintain the restrictions on the storage of this information that led many background screening companies to cease providing CORI.  Specifically, the regulations continue to prohibit background screening companies from electronically or physically storing CORI results, unless the background screening company is authorized by the employer to act as the decision maker. 

Employers should work with their legal counsel and background check providers to ensure that their procedures and forms comply with these new changes. 

Massachusetts businesses should also be aware that there are legislative proposals regarding Criminal Justice reform and other specific proposals that would impact Criminal Offender Record Information (CORI) laws. 

Want to learn more about the new CORI regulations or the pending legislation? Please contact Brad MacDougall, Vice President of Government Affairs at AIM.  Based on interest, AIM may host a webinar to provide members with greater information.

Topics: Employment Law, Massachusetts employers, CORI

Employer Confidence Rises Again in March

Posted by Christopher Geehern on Apr 4, 2017 8:47:09 AM

Massachusetts employer confidence inched higher during March amid a swirl of contradictory economic and political signals.

BCI.March.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) increased 0.3 points to 62.4 last month, 5.9 points higher than its level of a year earlier and the highest reading since August 2004. The seventh consecutive monthly improvement reflected an increase in the U.S. Index of national business conditions, which has risen 9.1 points during the previous year, and a bullish overall view of current conditions.

The results came as the government announced that the U.S. economy grew in the fourth quarter at a faster pace than previously reported on higher consumer spending. At the same time, the Massachusetts unemployment rate rose to 3.4 percent as employers created jobs at an annual pace of 57,700.

“Massachusetts employers remain broadly confident about both the state and national economies,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer at the Harvard Graduate School of Design.

“Slight declines in the Employment Index, the Manufacturing Index and projections about the economy six months from now perhaps reflect some of the uncertainty about the direction of economic policy in Washington.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The index has remained above 50 since October 2013.

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

The Massachusetts Index, assessing business conditions within the commonwealth, rose 0.5 points to 63.7, leaving it 6.2 points higher than in March 2016.

The U.S. Index of national business conditions gained ground for the sixth consecutive month. Views of the national economy rose one point to 59.9. Still, February marked the 83rd 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, surged 1.9 points to 61.8 while the Future Index, measuring expectations for six months out, lost 1.4 points to 63.0. The future outlook was 4.9 points higher than a year ago.

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

The Company Index, reflecting overall business conditions, remained unchanged from February at 62.8. The Employment Index fell 1.4 points to 60.4, but the Sales Index gained 1.1 points to 62.6.

The AIM survey found that nearly 39 percent of respondents reported adding staff during the past six months while 19 percent reduced employment. Expectations for the next six months were stable – 37 percent hiring and only 10 percent downsizing.

One of the most unusual results of the March survey was that Western Massachusetts companies were more confident (63.6) than those in the eastern portion of the commonwealth (62.2). Confidence outside of the white-hot Boston economy has been increasing steadily for months, but experts say it is too soon to say whether the geographic shift represents a long-term trend or a statistical anomaly.

Paul Bolger, President, Massachusetts Capital Resource Company, and a BEA member, noted that the March confidence survey was taken just as Republican efforts to repeal federal health reform fell apart.

“Employers have anticipated that a Republican Congress and a Republican president would deliver traditional pro-growth measures such as tax reform and infrastructure improvements. The failure of those parties to pass health-reform legislation seems to have created uncertainty about other legislative priorities that matter to employers,” Bolger said.

AIM President and CEO Richard C. Lord, also a BEA member, echoed the sense of uncertainty that hangs over Massachusetts as federal policymakers in Washington struggle to establish a direction.

“Many growth industries in Massachusetts such as health care, higher education, research and defense, depend upon federal funding and are vulnerable to potential budget reductions,” Lord said.

“Discussion of transitioning Medicaid, the health-insurance program for low-income Americans, to block grants also has significant implications to the health care system that is already straining employers.”

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

Employer Confidence Hits 13-Year High

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

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

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

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

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

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

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The index has remained above 50 since October 2013.

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

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

February marked the 82nd consecutive month in which employers have been more optimistic about the Massachusetts economy than the national economy.

The Current Index, which assesses overall business conditions at the time of the survey, increased 0.5 points to 59.9 while the Future Index, measuring expectations for six months out, rose 1.1 points to 64.4. The future outlook was 8.5 points better than a year ago and higher than at any point since May of 2004.

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

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

The AIM survey found that nearly 39 percent of respondents reported adding staff during the past six months while 19 percent reduced employment. Expectations for the next six months were stable – 37 percent hiring and only 10 percent downsizing.

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

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

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

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

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

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

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

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