Associated Industries of Massachusetts' Business Confidence Index was still in positive territory, but lower than a month ago.
Employers lost confidence last month in their own business’ ability to prosper over the next six months, according to results from an Associated Industries of Massachusetts survey released this week.
“That makes them reluctant to hire and the most important thing we need now is jobs,” said Andre Mayer, senior vice president for research at Associated Industries, a Boston-based business lobbying group.
“They just think conditions are not as good as they had thought,” Mayer said. “People are saying ‘Maybe our sales are not going to go up as much as we thought. Maybe we are not going to hire.’”
The Associated Industries of Massachusetts Confidence Index was 51.7 points in May. The index is on a 100-point scale, where anything over 50 is considered positive. But May’s number was down 4.4 points from 56.1 points in April.
The Business Confidence Index historical high was 68.5, attained in 1997 and 1998; its all-time low was 33.3 in February 2009.
Mayer said the survey revealed a general downward trend in hiring. Thirteen percent of the executives who responded to Associated Industries survey in April reported that they cut staff in the last six months. In May, that jumped to 25 percent.
Looking forward, in April 33 percent of employers said they would add staff in the next six months, which fell to 27 percent in the May survey.
Also looking forward, in April 6 percent said they would cut staff in the next six months. In May, 13 percent said they would likely cut staff over the next six months.
Mayer pointed out that there is still a two-to-one ratio of hiring to firing according to the May survey, with 13 percent of respondents predicting staff cuts and 27 percent predicting that they would hire.
“But it still doesn’t give you a good feeling about the number of new jobs that will be created,” Mayer said.
Michael D. Goodman, chairman of the department of public policy of the University of Massachusetts at Dartmouth, said the negative sentiment is a reflection of high gas and oil prices, poor employment numbers and credit trouble in Europe.
The survey was taken in the middle of May, weeks before tornadoes devastated portions of Western Massachusetts.