For the 14th time in the past 15 months, the San Joaquin Valley Business Conditions Index rose above the growth neutral threshold.

The index, produced by Fresno State’s Craig School of Business, is a leading economic indicator from a survey of individuals making company purchasing decisions in the counties of Fresno, Madera, Kings and Tulare.

The February index advanced to 52.5 from 50.8 in January. An index of greater than 50 indicates an expansionary economy over the course of the next three to six months.

“Construction firms and value-added business services firms continue to report slowly improving business conditions. On the other hand, the negative impacts from the drought are growing,” said Dr. Ernie Goss, research faculty with the Craig School of Business. “Approximately one-third of the businesses reported that the drought has had negative impacts on sales.”

The index uses the same methodology as that of the national Institute for Supply Management.

Other survey findings:

  • Employment: After moving below growth neutral last month, the hiring gauge rose to 54.1 in February from 49.5 in January.
  • Wholesale prices: The prices-paid index, which tracks the cost of raw materials and supplies, climbed to 71.9 from 66.4 in January.
  • Business confidence: Looking ahead six months, economic optimism, captured by the business confidence index, dropped slightly to 48.0 from January’s 48.4.
  • Inventories: Businesses expanded inventories of raw materials and supplies for the month. The inventory index climbed above the growth threshold to 52.8 from 48.1 in January.
  • Trade: The new export order reading dipped to 45.1 from January’s 45.2. The regional import reading for February rose to 58.1 from January’s 52.6.
  • Other components: Other components of the February Business Conditions Index were new orders at 50.1, down from 50.3 in January; production or sales at 48.5, down from January’s 49.3; and delivery lead time at 57.1 which was unchanged from January.

For more information, contact Goss at 559.278.2352.

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