A container ship unloads at Boston's Conley Terminal in March 2022. Photo courtesy of Massport
Business confidence among companies in Massachusetts has stagnated to begin the new year while companies have also expressed concerns regarding President Donald Trump’s planned tariffs.
The Associated Industries of Massachusetts Business Confidence Index ticked slightly upwards to 55.6, up from 55.4 in December 2024. Still, the index ended the month 2.1 points higher than in January 2024.
“The economic expansion is continuing at subdued pace, with the US economy growing at an annual rate of 2.3 percent in the fourth quarter of 2024,” Sara Johnson, chair of the AIM board of economic advisors, said in a statement. “Employment growth also slowed to 143,000 jobs in January, even as the national unemployment rate fell to 4.0.”
While overall confidence increased, the Massachusetts Index which focuses on assessing business conditions within the state dropped 1.9 points to 53.1, which is 0.9 points lower than a year earlier.
Confidence varied throughout the state as the Central Massachusetts Business Confidence Index and the North Shore Confidence Index both fell while the Western Massachusetts Business Confidence Index increased. Central Mass. business confidence fell from 57.9 to 57.2 while North Shore confidence decreased three points to 56.0. Business confidence in Western Massachusetts while seeing an increase, still was below Central Mass. and the North Shore as the index increased from 53.2 to 55.8.
Policy from the White House is impacting business confidence. One company noted that potential tariffs being planned by Trump on goods from Canada, China, and Mexico could impact already high construction costs.
“Businesses lose twice with tariffs – first the cost of inputs from the three largest U.S. trading partners goes up and then the retaliatory tariffs make their products more expensive in these important foreign markets,” Associate Professor of Economics at the College of the Holy Cross Olena Staveley-O’Carroll said in a statement provided by AIM.
The tariffs on imports from Canada and Mexico, which notably include much of New England’s diesel fuel and a large amount of lumber and gypsum for drywall used in construction, have been put off amid negotiations between the Trump administration and those two countries. However, over the weekend Trump announced he plans to put 25 percent tariffs on all steel and aluminum imports today.
