Confidence among Massachusetts businesses last month rose to its highest level since February, inching toward optimism as vaccines raised hopes for an end to the COVID-induced economic slowdown.

The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 3.1 points to 49.3 during November, just shy of the level that denotes an optimistic view of the business economy.

Driving the increase was a surge of confidence among manufacturing companies and bullishness among all employers about prospects for the future.

The BCI is up from a low of 38.4 in April but still 11.3 points less than in November 2019.

The confidence report comes as the Massachusetts economy continues a methodical recovery amid the renewed surge of COVID-19 cases. The state jobless rate dropped 2.4 percentage points to 7.4 percent in October following a record 37.7 percent rebound in economic output during the third quarter.

“Massachusetts companies appear to believe that the new COVID-19 vaccines will ultimately stem the increase in new cases and restore stability to the economy,” said Raymond G. Torto, professor at the Harvard Graduate School of Design and Chair of the AIM Board of Economic Advisors.

“The fact that employers are significantly more confident about conditions six months from now than they are about current conditions is a strong indicator that they see better days ahead.”

The confidence survey was taken after the November 3 US presidential election.

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 in 1997-98, and its all-time low of 33.3 in February 2009.

Constituent Indicators 

The constituent indicators that make up the Business Confidence Index all moved higher during November.

Employers’ confidence in their own companies rose 2.5 points to 51.8, crossing into optimistic territory but still 7.1 points lower than a year ago.

The Massachusetts Index assessing business conditions within the commonwealth gained 4.4 points to 47.3 while the US Index measuring conditions nationally increased 3.6 points to 43.8.

The Current Index, which assesses overall business conditions at the time of the survey, was up 1.6 points to 45.6. The Future Index, measuring expectations for six months out, surged 4.6 points to 53.0, still 6.5 points below its level of November 2019.

The Employment Index continued its steady increase, rising 1.6 points to 51.1. Despite the COVID-driven economic downturn, many employers continue to report challenges with hiring skilled workers.

Manufacturing companies recorded the largest increase in confidence, 5.8 points to 51.3. Many Massachusetts manufacturers have operated throughout the pandemic as essential businesses.

Large companies (56.2) were more bullish than medium-sized companies (48.6) or small companies (45.3).

Sara L. Johnson, Executive Director, Global Economics, IHS Markit and Vice Chair of the BEA, sounded a note of caution about the ability of governments around the world to control the spread of COVID. She predicts that the US economy will grow at 3.7 percent in the fourth quarter and then slow to average growth of 1.9 percent next year.

“The need to bolster struggling economies has swamped notions of austerity. Unfortunately, institutional and political constraints in Europe, the possibility of a divided government in the United States, and limitations on further budgetary expansion in the emerging world mean hopes for big fiscal stimulus remain uncertain,” Johnson said.

Preserving the Business Climate

AIM President and CEO John R. Regan, also a BEA member, commended the Massachusetts Legislature for hammering out a state budget last week that avoids raising broad-based taxes on business. He also called upon state and local leaders to keep the economy open in light of the fact that the increase in new COVID-19 cases is not coming from workplaces.

“Addressing the COVID crisis by shutting down the economy again is not a solution. Neither is imposing tax increases to resolve the state’s fiscal issues at the expense of business people trying to keep people employed,” said Regan.