Confidence among Massachusetts businesses plunged for the third month in a row, underscoring local concerns around the Trump administration’s trade policies and cutbacks on federal research funding.
The Associated Industries of Massachusetts Business Confidence Index shed 4.5 points in April, to end the month at 41.5, its lowest point since the COVID-19 pandemic shut down most of the nation’s economy in March 2020. The index had risen slightly in November, following the election of President Trump. But it has been sliding since the start of the year as executives witness the consequences of that election.
The index is based on a monthly survey of about 140 employers. Readings above 50 indicate the mood is more positive than negative; the general sentiment, though, has been in negative territory for the past two months.
Sara Johnson, chair of AIM’s board of economic advisers, said the April results reflect similar declines in national consumer confidence, as well as growing concerns about federal tariff, tax, and spending policies. AIM, in a prepared statement, described the situation as a “heaping plate of uncertainty for Massachusetts employers.”
Survey respondents commented that the tariff situation is having a detrimental impact, particularly the 145 percent tariff that Trump has put in place on most imports from China. One respondent said costs for all raw materials have risen sharply, as have costs for tools and supplies, while several customers have already eliminated orders amid the challenging environment.
“The availability of Chinese products and the price that consumers pay for them has not changed that much so far,” said Olena Staveley-O’Carroll, associate professor of economics at the College of the Holy Cross in Worcester, and a member of AIM’s economic advisory board. “But some companies are now starting to raise their prices. And the effects will become more and more obvious in the coming weeks.”
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