A.I.M.'s July Business Confidence Index down 1.5 points.

BOSTON--(BUSINESS WIRE)--July 30, 1996--Associated Industries of Massachusetts (A.I.M.), an employer association of 3,700 Massachusetts companies, announced today that its Business Confidence Index dropped 1.5 points in June to 59.0.

"Massachusetts employers' growing uncertainty about the national economy and corporate sales prospects outbalanced more positive views of the state's business climate," said Raymond G. Torto, chairman of A.I.M.'s Board of Economic Advisors (BEA), Principal CB/Torto Wheaton Research. However, Torto noted, "Despite July's decline, the Index remained 2.7 points above last July's mark and 14.5 above its initial level five years ago."

The A.I.M. Business Confidence Index is based on a random monthly survey of member-companies representing a spectrum of industries within Massachusetts. Readings above 50 indicate that respondents are more optimistic than pessimistic about overall current and prospective business conditions. The Index reached its peak of 65.3 in December 1994.

"Rising for a sixth consecutive month, the Massachusetts Index, which assesses business conditions within the Commonwealth gained 2.1 points in July to 58.6," said Wayne Ayers, chief economist for the Bank of Boston. Ayers noted, "The Massachusetts Index reached its highest level since the end of 1994, and it has achieved a one-year gain of 8.6 points, and a 32.8 point increase over the past five years."

"The Future Index, reflecting expectations for six months out, lost 2.5 points to 58.9," said Joseph Blair, president of J.D. Blair & Co. Blair also said, "Employers were also marginally less positive about conditions prevailing now, as the Current Index edged down six-tenths of a point to 59.8 -- up from 56.5 in July 1995, and 40.7 points in June 1991."

"Nonmanufacturers were notably more optimistic than manufacturers about corporate sales and prospective Massachusetts business conditions," said Donald J. Barry Jr., senior vice president of Citizens Bank of Massachusetts. Barry noted, "Small employers were less positive than larger firms on most questions, although they looked forward to rising sales; companies with 26-100 employees were most confident overall."

Commenting on the July survey, John Gould, A.I.M.'s president and CEO, said, "The five-year history of the Business Confidence Index traces a record of progress that is impressive from several perspectives." Gould added, "In 1991-92, readings for the main Index and sub-indices showed prevalent lack of confidence in business conditions. "The improvement in our business climate since then is due in great part to the leadership of the legislature and the Weld Administration in adopting policies that have encouraged much needed new investments in our economy." Gould said, "The challenge is to continue to realize that the state must make further improvements to its business climate, and that employers need to increase their efforts to export the sales of their goods and services both nationally and internationally in order to retain and create good payings jobs in the state." -0-

Media Contacts:

Wayne M. Ayers, Chief Economist, Bank of Boston, 617/434-2450

Donald J. Barry Jr., Senior Vice President, Citizens Bank of Massachusetts

Joseph Blair, President, J.D. Blair & Co., 617/951-2477

John Gould, President & CEO, Associated Industries of Massachusetts, 617/262-1180 (days) or 617/646-0573 (evenings)

Raymond G. Torto, Principal, CB/Torto Wheaton Research, 617/345-0011

CONTACT: A.I.M.

Brian R. Gilmore, 617/262-1180 (days)

617/646-0573 (evenings)