Local business confidence index hits all-time low

Confidence among Massachusetts employers in October fell to the lowest-level since the brutal recession of the early 1990s, Association Industries of Massachusetts reported.

AIM's business confidence index plunged more than 5 points in the past month to 41.4, the lowest level in the 17-year-history of the survey.

Readings below 50 indicate businesses have a pessimistic outlook.

Confidence is considered an important indicator because businesses are less likely to invest, expand and hire when they are pessimistic about conditions.

"This decline in confidence is driven by poor national conditions -- not a state specific meltdown as in '91 -- and respondents doe not believe that we have bottomed out, " said Raymond G. Torto, global chief economist at CB Richard Ellis Group, Inc. and chairman of AIM's Board of Economic Advisors.

Employers outlook on the US economy was the most pessimistic in the index's history, plunging 13.5 points 28.6. Employers had a less gloomy view of business conditions in Massachusetts, but it was still substantially worse that a month earlier. The sub-index that measures the outlook on state conditions fell 8.6 points to 34.3.
(By Robert Gavin, Globe staff)