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Massachusetts Employers to Hold Steady on Capital Investment

Posted on January 31, 2013

Massachusetts employers plan to hold steady on capital investment in 2013, according to results of a special question on AIM’s January Business Confidence Survey.

A plurality of survey respondents, 46 percent, plan “about the same” level of capital investment in their operations in 2013 as in 2012. Half as many, 23 percent, expect investment to increase, while the same number foresee a decrease. The remainder (8 percent) did not know or were undecided. This balance holds among both manufacturers and other employers. Small firms (up to 25 employees) lean slightly towards decreased investment, while mid-size (26-100 employees) and large (101+) companies skew slightly towards more investment.

The survey question asked about change, not absolute level of investment. We know, however, that business investment in capital equipment has been strong in the course of this economic recovery, as companies have caught up with investments deferred during the downturn, and have generally chosen to increase production through equipment upgrades and process improvements in preference to adding personnel. This trend, domestically and globally, has been advantageous to Massachusetts, as our manufacturing sector is weighted towards capital goods more than consumer products.

AIM’s January Business Confidence Index will be released on Tuesday, February 5.