A.I.M.'s October Business Confidence Index weakens.

BOSTON--(BUSINESS WIRE)--Oct. 31, 1996--The Board of Economic Advisors (BEA) of Associated Industries of Massachusetts (A.I.M.), an employer association of 4,000 Massachusetts companies, announced today its Business Confidence Index slipped 2.2 points in October to 60.1.

"In spite of October's decline, the Business Confidence Index is up over two points from its reading a year ago," said BEA Chairman Raymond G. Torto, principal, CB Commercial/Torto Wheaton Research. Torto added, "The upcoming election may have contributed to business uncertainty October." Moreover, Torto said, "During the period when the October survey was conducted there was a brief spate of bad news about the state's economy, including plant closing, weak earnings reports, and a slight uptick in the unemployment rate which may have also impacted the October survey results."

The Business Confidence Index, initiated in July 1991, is based on a monthly survey of a sample of A.I.M. member companies. A reading above 50 indicates that employers are generally optimistic about current and future business conditions for their companies and in the state and national economies; the Index has been above 50 every month since September 1993, reaching a high of 65.3 in December 1994.

"With one exception, the subindices calculated along with October's Business Confidence Index also declined," said Wayne Ayers, chief economist for the Bank of Boston. Ayers noted, "The Massachusetts Index, reflecting condition within the Commonwealth, lost 1.5 points for its first statistically significant decline in eight months."

Meanwhile, he said, "The U.S. Index of National Conditions rose marginally (two-tenths of a point) to 61.5."

Kathie Stevens, vice chairman of USTrust, noted, "The Future Index, which measures expectations for business conditions six months ahead, lost less ground (-1.7) but, at 59.6, remained below the Current Index and fractionally below the level of a year ago."

"The Employment Index and Sales Index, which examines trends in those areas for the past six months and the next six months, lost 3.7 points and 3.4 points respectively," said Donald J. Barry Jr., senior vice president of Citizens Bank of Massachusetts. "Since a year ago, the Employment Index is off two points, and the sales indicator is down fractionally," Barry said.

Commenting on the October survey, John Gould, A.I.M.'s president and CEO, said, "The pattern of responses, with falling confidence in national conditions and increased doubts about instate conditions among smaller firms, may reflect the impact of political uncertainties the November election has on the economy."

CONTACTS: Bank of Boston

Wayne M. Ayers, 617/434-2450

or

Citizens Bank of Massachusetts

Donald J. Barry Jr., 617/482-2600

or

Associated Industries of Massachusetts

John Gould, 617/262-1180

or

USTrust Co.

Kathie Stevens, 617/726-7167

or

CB/Torto Wheaton Services

Raymond G. Torto, 617/345-0011