Trying to pinpoint the next recession, or how much more the economy can grow, has left many economists and experts baffled, primarily because the recovery since the recession has been filled with many mysteries.

Perhaps nowhere is this confusion more evident than in the commercial and industrial loan market, which many believe to be an indicator of when a recession will begin.

In Massachusetts, C&I loan growth at the 10 largest community banks by assets, excluding State Street, has been mixed over the last few years. Some have seen a year of decline followed by a year of growth, and vice versa. Others have seen very little growth, if any at all, and only a few community banks have shown solid growth.

“Like much in the recovery, a lot of things have been counterintuitive,” Christopher Geehern, executive vice president of marketing and communications at the Associated Industries of Massachusetts, told Banker & Tradesman. “Spending by businesses and business activity should continue to increase both toward the end of this year and into next year.”

Geehern points to AIM’s monthly business confidence index, which surveys companies across Massachusetts asking questions about current and prospective business conditions in the state and nation, as well as for respondents’ own operations.

On the index’s 100-point scale, a reading above 50 indicates that the state’s employer community is predominantly optimistic. In the month of October, the AIM BCI came in at 62.7, up slightly from the previous month and up 6.5 points from a year ago.

Still, the index has been above 50 since 2013, during which time C&I loan volumes have fluctuated.

A Mixed Bag

The top 10 community banks in Massachusetts – Eastern Bank, Berkshire Bank, Rockland Trust, Boston Private, East Boston Savings Bank, Salem Five, Middlesex Savings Bank, Century Bank and Brookline Bank – saw collective C&I loan volume growth of $769 million, according to earnings data and call reports compiled by Banker & Tradesman, between Sept. 30, 2015, and Sept. 30, 2016.

The pace of that loan growth slowed slightly in the year between Sept. 30, 2016, and Sept. 30, 2017; total C&I loan volume grew $749 million.

Some of these numbers might be skewed because some of these banks did mergers or made acquisitions during these years, which could have moved C&I numbers up without any organic growth.

Eastern Bank and Century Bank are the two banks in this group that have showed consistent, strong loan growth in both years.

“This is Century’s seventh record year of performance through the third quarter, and all of our lending businesses are doing well, with the C&I business right with it,” said Barry Sloane, president and CEO of the bank, adding that year-to-date C&I loan growth has outpaced total loan growth.

Century’s parent company in a recent regulatory filing said the increase in C&I lending over the past year is due to “an increase in larger loan originations to large institutions,” which Sloane says is a reference to the bank making more C&I loans to universities and health care businesses.

Other banks, such as Rockland Trust and Boston Private, have not fared as well in previous years, both experiencing overall declines between 2015 and 2017 in the C&I bucket.

Independent Bank Corp., the holding company of Rockland Trust, attributed recent declines in C&I lending “due to lower utilization rates.”

As the economy shows clear improvement even in more recent days, the C&I waters are still choppy. Between the second and third quarter of this year, three of the 10 largest community banks in Massachusetts saw declines in C&I loan volumes, while others in the top 10 had marginal growth.

Banks in the third quarter eased their standards and terms on C&I loans, yet experienced weaker demand for such loans, according to the Federal Reserve’s October Senior Loan Officer Opinion Survey on Bank Lending Practices.

Reasons for the weaker demand in the survey were somewhat scattered, but included competition from other bank and nonbank competitors, as well as decreases in customers’ needs to finance inventory, accounts receivable, investment in plant or equipment and mergers or acquisitions.

Outlook Remains Positive

Despite the hard-to-predict nature of the C&I market, the economy is expected to improve, leading some to think the C&I market will follow suit.

Massachusetts’ real gross domestic product grew 5.9 percent in the third quarter of 2017, higher than the national rate, according to Mass Benchmarks, published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston.

AIM’s manufacturing index has also increased this year, which is important from a capital spending perspective.

Geehern said positive sentiment about the economy can take time to translate into actual results.

Right now, he said, businesses may be waiting to see if lawmakers in Washington push forward with tax reform and reduce the corporate tax rate, while also doing everything possible to maximize output and efficiency before they have to invest in in new equipment.

“The unknown factor is that before activity increases, employers try to get as much as possible out of their labor force,” he said. “But with unemployment so low right now, they can’t find employees to fill their orders; that is when you will see them expand their plant or buy new equipment.”