Confidence among Massachusetts employers continued to strengthen in November amid a resilient economy, surging financial markets and the potential for pro-growth policies from Washington, DC.

The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 2.2 points to 57.5, its highest level in two years. It marked the fourth consecutive monthly increase and left the BCI 6.7 points higher than a year ago.

The survey came as Massachusetts posted a surprising 2.9 percent annualized increase in economic output during the third quarter, along with a still-moderate 3.9 percent unemployment rate. Financial markets, meanwhile, continued to be buoyant with the Standard & Poor’s 500 having gained 28 percent from January through November.

The survey took place after the November 5 president election that will return Donald Trump to the White House.

“Economic growth in Massachusetts was virtually identical to that in the nation as a whole, providing the latest indication that the expansion remains on solid footing. Falling interest rates and the availability of business credit are providing fuel for growth,” said Sara Johnson, Chair of the AIM Board of Economic Advisors (BEA), which oversees the BCI.

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.

Participants in the survey generally reflected the surge of optimism.

“As a financial institution, we are pleasantly surprised at how well the consumer has held up dealing with the impact of inflation and higher interest rates,” wrote one participant.

At the same time, several participants expressed concern over President-Elect Trump’s discussion of tariffs.

“The prospect of additional tariffs on imported goods has the potential to impact our business substantially as it would result in higher costs of goods and those costs would likely have to be passed on to the consumer and – to a lesser extent- absorbed by the brand. That would result in lower profits and lower sales volume and therefore would be bad for business,” one company said.

Confidence varied regionally across the Commonwealth. The Central Massachusetts Business Confidence Index, conducted with the Worcester Regional Chamber of Commerce, rose from 48.4 to 52.7; the Western Massachusetts Business Confidence Index, developed in collaboration with the Springfield Regional Chamber of Commerce, increased from 51.9 to 53.2; and the North Shore Confidence Index, conducted with the North Shore Chamber of Commerce, moderated from 60.6 to 57.0.

Constituent Indicators 

The constituent indicators that make up the Index were uniformly higher in November.

The confidence employers have in their own companies was up 1.9 points to 58.2. That figure was 6.2 points better than in November 2023.

The Massachusetts Index assessing business conditions within the Commonwealth rose 2.5 points to 56.7, leaving it 4.1 points higher than a year earlier. The US Index measuring conditions throughout the country gained 3.0 points to end the month at 57.4, its highest point in more than three years.

The Current Index, which assesses overall business conditions at the time of the survey, gained 2.8 points to 57.8. The Future Index predicting conditions six months from now moved up 1.6 points to 57.6.

The Manufacturing Index, which has lagged overall confidence readings for much of the year, gained 2.3 points to 52.8. The Employment Index rose 1.1 points to 53.6.

Large companies (60.4) were more optimistic than medium-sized companies (58.1) or small companies (54.4).

Ryan Hanna, Senior Vice President and Chief Investment Officer at Cambridge Trust, and a BEA member, said the surge in financial markets reflects solid economic fundamentals, double-digit growth in earnings per share and continued vibrant spending as the holiday season begins.

“The consumer remains resilient, thanks in part to real wage growth and a strong labor market,” Hanna said.

Economic Development Bill

AIM President and CEO Brooke Thomson, also a BEA member, said the $4.96 billion economic-development bill passed by the Legislature and signed by Governor Maura Healey will encourage job creation and enhance the overall economic competitiveness of Massachusetts.

“This economic-development bill reflects the Legislature’s clear commitment to supporting the business community and boldly declares that Massachusetts is open for business,” Thomson said.

“The bill doubles down on the state’s past successes and paves the way for Massachusetts to both retain major sectors and become the home to important emerging industries. We thank our partners on Beacon Hill for their continued support for delivering results for our members.”