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As concerns over the Trump administration’s then-planned tariffs and research funding cuts grew last month, businesses grew pessimistic about business conditions in Massachusetts.

The Associated Industries of Massachusetts Business Confidence Index lost 4.4 points to end the month at 46.0 which is below the “pessimistic” threshold of 50. The index was 6.2 points lower than in March 2024 and has lost 9.6 points over the past two months.

Notably, the latest index reading doesn’t reflect any changes in sentiment related to the stock market crash of the last six days, triggered April 2 when President Donald Trump announced large increases on tariffs against nearly every country on the globe.

“The broadly based weakening of confidence reflects anticipation of disruptive import and export tariffs together with uncertainty about federal tax and spending policies,” Sara Johnson, chair of the AIM board of economic advisors, said in a statement. “Meanwhile, the export-oriented Massachusetts economy appears to be downshifting, with payroll employment falling and unemployment rising in the first two months of 2025.”

The US Index measuring conditions throughout the country dropped 7.6 points to its lowest level in five years to 36.6. This was also a 10.7 point drop year-over-year.

Large companies were more optimistic than medium-sized companies or small companies with small businesses being the least confident with an index falling to 40.2. Still, the effects of tariffs are being felt across all business sizes.

“One Massachusetts company told us that a $1 million contract set for March was cancelled with less than 48-hours notice,” AIM President and CEO Brooke Thomson said in a statement. “Another manufacturing company estimates that tariffs will increase costs by $2 million – all of which would be passed on to customers.”