Thursday, October 30, 2008

Report: Business confidence falls to record low

By Mass High Tech Staff

The Associated Industries of Massachusetts has announced levels of business confidence and national conditions that reached historic lows.

AIM’s Business Confidence Index, which measures on a 100-point scale with 50 being neutral, hit 41.4 — a drop of 13.8 points since last October. The reading indicates a one-point difference from its previous low of 41.5 in December 1991 during a recession.

In general, readings above 50 tend to indicate overall optimism in business climate, while a reading below 50 indicates pessimism in business conditions, AIM officials said.

The Index of conditions on a national level also set a new record low by marking a 28.6 reading, more than 10 points lower than the index recorded in the bottom of the 2001 recession. And statewide, the Massachusetts Index of Conditions, which tracks employers views of current economic conditions, recorded 34.3, also lower than 2001 recession readings, but still higher than 1991 recession levels.

Hope for a more positive economy in the near future appears to be on hold in Massachusetts as well. AIM’s future Index of prospects for six months ahead also hit a new low of 40.5.

Despite a recovering U.S. dollar value, the global slowdown of growth and export demand from the U.S. has manufacturers’ confidence falling 6 points to a 43.3 reading, AIM officials report.

While the Employment Index inched up slightly in points, AIM officials said in a statement that survey respondents — and in particular, small busineses — had little confidence that employment numbers would continue to gain.

Since 1991, AIM has developed a monthly business confidence index stemming from surveys of the commonwealth’s AIM-member companies.