Buoyed by strong gains in the outlook for employment, Massachusetts employers began 2020 on an optimistic note, according to the Associated Industries of Massachusetts.
Business confidence held steady during the first month of the new year, with the AIM Business Confidence Index rising 0.1 points to 62.3 in January. That reading was comfortably within optimistic territory and 3.6 points higher than a year ago.
The Massachusetts jobless rate dropped to 2.8 percent in December even though the state lost an estimated 5,000 jobs.
Economists at MassBenchmarks reported last week that the Massachusetts economy expanded at a 1.3 percent annualized rate in the fourth quarter of 2019, compared to a 2.1 percent fourth quarter growth rate for the national economy, AIM reported on Tuesday. The US is expected to grow by 2.2 percent during 2020, largely because of continued strength in consumer spending and a rebound in business fixed investment.
“The US and Massachusetts economies continue to expand at a modest and predictable rate while the uncertainties of tariffs and trade conflicts appear to have abated for the moment,” Raymond G. Torto, professor at the Harvard Graduate School of Design Chair of AIM’s Board of Economic Advisors, told AIM.
AIM President and CEO John R. Regan, also a BEA member, said employers report an uptick in solicitations from states such as Tennessee, Texas and North Carolina to move operations out of Massachusetts. The commonwealth cannot lose sight of economic competitiveness, Regan said, as lawmakers contemplate significant transportation, housing, taxes and other issues.
“The combined effect of the new paid family and medical leave law, escalating health-insurance rates, the potential costs of a transportation initiative and the specter of a graduated income tax on the state ballot add up to a significant threat for the ability of Massachusetts to maintain its economic vibrancy,” Regan said.