Massachusetts Employer Confidence Falls to 47.6, Third Straight Month Below 50

Massachusetts employers have now been pessimistic for three straight months. The Associated Industries of Massachusetts Business Confidence Index fell 1.0 point to 47.6 in October, AIM reported Oct. 30. That puts it 1.1 points below October 2025 and under the 50 mark that separates optimism from pessimism on the 100-point scale.

The survey of more than 140 employers shows a split. Companies still rate their own prospects above neutral, and the hiring gauge rose. But their views of the state and national economies fell, and the U.S. reading dropped to its lowest point since the April 2025 “Liberation Day” tariff announcement. The Boston Business Journal reported the results Monday.

Key figures: Overall index 47.6 (down 1.0) · U.S. Index 37.3 · Massachusetts Index 42.5 · Employment Index 54.1 (up 1.6) · Manufacturing Index 48.1 (down 2.6)

Which gauges fell in October

Almost every part of the index fell, according to AIM:

• Company Index: employers’ confidence in their own operations slipped 0.5 point to 52.8. That is still 2.5 points higher than a year earlier.
• Massachusetts Index: views of business conditions in the state fell 2.2 points to 42.5, down 0.8 point from October 2025.
• U.S. Index: views of the national economy fell 1.3 points to 37.3, 0.9 point below a year ago.
• Current and Future indexes: the Current Index lost 1.3 points to exactly 50.0. The Future Index, which covers the next six months, fell 0.7 point to 45.2.
• Manufacturing Index: it dropped 2.6 points to 48.1, below neutral after reading 50.7 in September.

The Employment Index was the only one that improved. It rose 1.6 points to 54.1, up from 48.5 in October 2025, a 5.6-point gain over the year. Medium-sized companies, at 51.1, were more confident than large companies, at 47.8, or small companies.

Costs are squeezing margins

One western Massachusetts service company told AIM it expects sales to trend “upward slightly to moderately.” But it said “commercial insurance, healthcare benefits, wage compression, utility costs and even IT costs are impacting our organization and many of our clients.” More news from the region is on our Western Massachusetts page.

AIM President and CEO Brooke Thomson said the Federal Reserve’s decision last week to leave interest rates unchanged is a positive for business. She said rising prices for energy and other inputs are still a concern. “We hear again and again from our members that inflation is squeezing margins and also causing worries for employees as we enter the winter heating season,” Thomson said. The Boston Report’s Federal Reserve tracker follows the central bank’s rate decisions.

Data analysis: a year mostly below 50

The Boston Report charted the index’s last 12 monthly readings, from November 2025 through October 2026, using AIM’s published figures. Nine of the 12 months came in below 50. The only optimistic months were February (52.0), June (50.6) and July (52.7). The 12-month average is 48.7. October’s 47.6 is 5.1 points below the July high, and that high has now given way to three straight months of pessimism.

Side by side, the September and October readings show the gap between how companies see their own business and how they see the wider economy. The U.S. Index is 15.5 points below the Company Index. Employment is the only bar that grew.

State labor data show a steadier picture than the overall index. The state’s unemployment rate was 4.3% in both August and September 2026, according to federal data compiled by the St. Louis Fed. That is down from 4.6% a year earlier and from a 4.8% peak in February 2026. Massachusetts had 3,711,000 nonfarm jobs in September, according to the same data. That is about 16,300 more than a year earlier, a gain of 0.4%.

What it means for Boston businesses

The national picture is not weak on paper. Ryan Hanna, chief investment officer at Cambridge Wealth Management, a division of Eastern Bank, and a member of AIM’s Board of Economic Advisors, said real GDP grew at a 3.4% annualized rate in the third quarter. He said consumer spending grew at a 3.8% rate and business spending on equipment surged 20.9%. Our U.S. economy tracker follows those national numbers.

The Manufacturing Index’s drop below 50 comes weeks after a large bet on the sector: Framingham-based Re:Build Manufacturing recently announced a $2.1 billion funding package. More local company news is in our Boston business news section.

AIM’s index has run monthly since July 1991. It reached a record high of 68.5 in 1997–98 and an all-time low of 33.3 in February 2009. October’s 47.6 is far from either extreme. It is the third straight reading below neutral, matching three-month runs from November 2025 to January 2026 and from March to May 2026.

“The U.S. economy is showing a mix of continued economic growth, persistent cost pressures, and uncertainty about the direction of interest rates,” said Sara Johnson, chair of AIM’s Board of Economic Advisors, which oversees the index. “While consumer spending and business investment have provided support, households and employers continue to face elevated costs, borrowing expenses, and an uncertain economic outlook.”

Sources

• Associated Industries of Massachusetts: Employer Confidence Slides in October (Oct. 30, 2026)
• Associated Industries of Massachusetts: Employer Confidence Rebounds in September (Oct. 5, 2026)
• Boston Business Journal: AIM confidence index (Nov. 2, 2026)
• FRED, Federal Reserve Bank of St. Louis: Unemployment Rate in Massachusetts (MAUR)
• FRED, Federal Reserve Bank of St. Louis: All Employees, Total Nonfarm in Massachusetts (MANA)