Employer confidence increased slightly during April but remained in pessimistic territory amid a resilient but slowing economy.

The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 0.9 point to end the month at 47.9 on a 100-point scale. The increase left the Index 6.4 points better than its tariff-driven level of April 2025.

Massachusetts employers have been pessimistic for 13 of the past 14 months.

The confidence increase was consistent with an uptick in hiring by Massachusetts employers a month earlier. The commonwealth posted its biggest monthly job gain in two years during March as payrolls rose by 6,800 after a loss of 7,200 jobs in February. The state’s unemployment rate ticked down to 4.7 percent from 4.8 percent.

The U.S. economy also showed resilient growth with first-quarter GDP rising by 2% on the strength of strong private investment and AI-related spending. At the same time, inflation was at 3.6% in the first quarter – with concerns that higher oil prices could eventually spill over into core inflation – while consumer spending showed signs of fatigue and the labor market remained tight.

“The economy is holding up reasonably well, thanks to strong business investment, but it faces headwinds from inflation, cautious consumers, and global geopolitical risks,” said Sara Johnson, Chair of the AIM Board of Economic Advisors (BEA), which oversees the Business Confidence Index.

Companies that participated in the BCI confirmed that they find themselves caught in the middle of mixed economic signals.

“Oil prices are having direct and immediate impacts on our profitability. While sales have been strong so far this year, we are seeing double-digit price increases from our suppliers, and massive spikes in freight charges. One plastics supplier informed us today of an 11% increase on top of a 20% increase in March,” wrote on manufacturing company.

The AIM Index, based on a survey of more than 140 Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions, 1997-98, and its all-time low of 33.3 in February 2009.

Constituent Indicators

The constituent indicators that make up the Index almost all increased in April after falling the previous month.

The confidence employers maintain in their own operations gained 1.1 points to 53.7. The figure was 7.1 points better than a year earlier.

The Massachusetts Index, assessing business conditions within the commonwealth, rose 1.4 points to 39.9, leaving it 2.0 points higher than in April 2025. The US Index measuring conditions throughout the country was flat, losing 0.1 point to 38.6 – still an increase of 9 points for the year.

The Current Index, which assesses overall business conditions at the time of the survey, was up 2.2 points to 49.3. The Future Index predicting conditions for the next six months increases 0.3 point to 46.6.

The Employment Index gained 0.9 point to close the month at 50.4. The Manufacturing Index surged 6.4 points to 56.2, 16.5 points better than a year earlier.

Large companies (53.0) were more confident than medium-sized companies (49.4) or small companies (41.9).

Suzanne Dwyer, President, Massachusetts Capital Resource Company, said the private capital markets are trying to sort out the same complex mix of factors that are driving the overall economy.

“The private capital investment environment in Massachusetts is characterized by cautious optimism, sector-specific strength, and increasing competition from other states. Investors are prioritizing companies with strong fundamentals, such as positive cash flow and clear profitability paths, over pure growth” Dwyer said.

Tariff Refunds

AIM President and CEO Brooke Thomson, also a BEA member, suggested that the jump in confidence among manufacturing companies might reflect relief that the US Supreme Court ruled that tariffs imposed in 2025 were unconstitutional.

“Tariffs are not popular among AIM members, especially manufacturing companies, and the fact that some of these companies have now begun the process of seeking tariff refunds has apparently brightened their outlook about present conditions,” Thomson said.