Bay State employer confidence fell again into April, raising uncertainty for the second consecutive month amid concerns about job costs and inflation and how to fund repairs to the state’s beleaguered transportation system. The issue also brought additional pressure.
According to Associated Industries in Massachusetts, last month’s monthly business confidence index was 51.9%, just within optimistic territory, 0.8 points higher than this time last year, but inflation was also It remains well above the Federal Reserve’s metrics. The goal is 2%. As a result, confidence scores have fallen by more than 2.5 points since February, according to AIM research.
“Employers and consumers alike are experiencing sustained inflation and a slowdown in economic activity, creating a heightened sense of alarm. The good news is that while real consumer spending and investment continue to rise, the job market “The balance between the two countries is improving,” Sarah Johnson, chair of AIM’s economic advisory committee, said in conjunction with the April report.
AIM noted that just last week, the Federal Reserve indicated that curbing inflation may take longer than initially expected, meaning interest rates may not fall immediately. One association member surveyed told AIM that while the Fed’s fight against inflation continues, “construction activity has slowed in the past three months as many projects have been delayed or canceled due to high interest rates and lack of demand.” “It’s slowing down,” he said.
This comes as April employment figures released by the Bureau of Labor Statistics show that employers slowed hiring last month, with payrolls increasing by just 175,000 people. . This was well below the 233,000 expected by economists, and well below the 315,000 increase in March.
This is actually good news for the Fed, which has used its key interest rate hikes to rein in spending and inflation without destroying the economy. Their attempts at a so-called soft landing should ultimately involve lowering interest rates, but only if there are signs that it will work.
Rubera Farooqi, chief U.S. economist at High Frequency Economics, told The Associated Press that “a decent slowdown in payrolls to start the second quarter is likely coupled with a slowdown in wage growth.” “This will be welcome news for (Fed) policymakers.” “Current statistics also support the view that rate cuts, not rate hikes, are the Fed’s base case for this year.”
This could also be good news for Bay State employers, who told AIM that all costs, including wages, make it difficult to compete.
“Labor, material, and energy costs are all going up, and while our competitors are also seeing material costs go up, we generally have higher labor and energy costs because of the state we live in. “We rarely pass these costs on to our own companies. We can gain customers without losing market share,” one company said in the study.
Brooke Thomson, president and CEO of AIM, said the current state of the MBTA and the solutions offered to fund its fixes are also a concern for employers. Jumping to quick fixes like border polls won’t necessarily solve the decades-old problems in District T.
“As predictable proposals float around to fund transportation transformation, AIM believes we all need to step back and ask ourselves: What problem are we trying to solve? What information do we need? And how will changing work and travel patterns shape potential solutions to the problem?” Thomson said.
According to AIM, North Shore employers were the most trusted, with a 59.6% trust rating in the April survey, and the lowest was the Worcester region, which had a 45.9% trust rating last month. Ta.
AIM surveys more than 140 companies in the Bay State to create a monthly index, the first of which was released in July 1991. According to AIM, business confidence hit historic highs in 1997 and 1998, with confidence at 68.5% during his two-month period in both years. And the lowest value was 33.3% in February 2009.
The Herald Wire Service contributed.
