Business confidence rebounded in November as a resilient economy muted employer concerns about everything from tariffs to the cost of doing business in Massachusetts.

The Associated Industries of Massachusetts Business Confidence Index (BCI) gained two points to 48.5 on a 100-point scale. The Index remained in pessimistic territory for a ninth consecutive month and ended November 9.2 points below its post-election level a year earlier.

The Index shows a sharp contrast between manufacturing and service companies. The Manufacturing Index fell to 41.3 while non-manufacturers ended the month at 51.5.

The overall uptick in confidence reflects solid expansion of the U.S. economy throughout 2025. Most forecasts point to continued—though more moderate—expansion into 2026. Growth is being underpinned by resilient consumer activity and steady business investment despite pockets of weakness.

Inflation, however, remains a central challenge. Price pressures have eased from their post-pandemic highs but continue to run above the Federal Reserve’s preferred levels, sustaining uncertainty around the timing and scale of monetary policy adjustments.

“The US economy enters 2026 with a mix of solid fundamentals and notable risks, balancing strong private-sector momentum against inflation concerns. Though policy uncertainty continues to weigh on business planning, investment in artificial intelligence and advanced technologies remains a bright spot, driving capital expenditures and boosting productivity in key sectors,” said Sara Johnson, Chair of the AIM Board of Economic Advisors (BEA), which oversees the BCI.

Companies that participated in the BCI expressed divergent views on the business outlook.

“Sales seems to have stalled. Our stores on the South Shore are flat but our stores in and closer to Boston are down. We typically hire for Fall’s higher volume and instead we have held back on recruiting for positions,” wrote one retail company.

But another retailer said: “Our company continues to see growth in both retail and corporate gifting, with increasing demand for locally made, eco-luxury products. We are expanding our product lines and experiential offerings, and we anticipate continued business confidence as we move into 2026.”

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 were mostly higher in November.

The confidence employers maintain in their own operations rose 1.4 points to 51.7. That figure was 6.5 points less than in November 2024.

The Massachusetts Index, assessing business conditions within the commonwealth, gained 1.9 points to 45.2, leaving it 11.5 points lower than a year earlier. The US Index measuring conditions throughout the country increased by 4.1 points during November but lost 15.1 points for the year.

The Current Index, which assesses overall business conditions at the time of the survey, rose 1.8 points to 48.1. The Future Index predicting conditions six months from now rose 2.2 points to 48.9.

The Manufacturing Index slid 4.4 points to 41.3, leaving it 11.5 points lower than the year earlier. The Employment Index added 0.9 point to 49.4.

Large companies (51.7) were more confident than medium-sized companies (47.8) and small companies (46.7).

Ryan Hanna, Senior Vice President and Chief Investment Officer, Cambridge Wealth Management, a Division of Eastern Bank, and a BEA member, said the rapidly changing economy has left him “uncomfortably bullish.”

“The U.S. economy continues to defy pessimistic sentiment. Underlying demand has remained resilient despite the economic turmoil this year. Adjusted retail sales remain robust and the labor market, while slowing, remains historically tight with the unemployment rate at 4.4% and wages growing at 3.9%, well above the pace of inflation,” Hanna said.

Education Standards

AIM President and CEO Brooke Thomson, also a BEA member, said the business community is encouraged by the recent release by the Healey-Driscoll Administration of a statewide high school graduation framework that would set nation-leading expectations for every school.

“Massachusetts’ economic future depends on a strong and measurable education system. Ensuring that all students meet clear and standardized expectations in core subjects is critical not only for their own success, but for the long-term competitiveness of our state,” Thomson said.