The April San Joaquin Valley Business Conditions Index registered its largest one-month increase since December 2012.

For the 16th time in the past 17 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 overall April index advanced to 55.9 from 52.0 in March. An index of greater than 50 indicates an expansionary economy over the course of the next three to six months.

“This month we asked survey participants to identify the biggest economic challenge likely faced by their company for 2014. More than one-fourth named the continuing drought to be the largest threat to their business,” said Dr. Ernie Goss, research faculty with the Craig School of Business. “However, only 18.2 percent of businesses indicated that the drought has had a negative impact on their business thus far.”

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

Other survey findings:

  • Employment: After slipping below growth neutral for January, the hiring gauge has moved above the 50.0 threshold for the past three months. The job index expanded to a solid 55.1 from March’s 53.3.
  • Wholesale prices: The prices-paid index, which tracks the cost of purchased raw materials and supplies, increased for the month. The wholesale inflation gauge climbed from March’s 72.1 to 75.3 for April.
  • Business confidence: Looking ahead six months, economic optimism, captured by the business confidence index, rose to 56.2 from last month’s 52.8.
  • Inventories: Businesses expanded inventories of raw materials and supplies for the month at a faster pace than in March. The April inventory reading jumped to 60.0 from 52.5 in March.
  • Trade: The new export order declined to a still healthy 56.0 from March’s strong 67.0.  According to Goss, readings over the past two months have been economically encouraging for a region where exports are an important component of growth. The regional import reading for April increased to 57.3 from March’s 56.3. Businesses experiencing growth continue to boost their purchases from abroad.
  • Other components: Other components of the April Business Conditions Index were new orders at 56.7, up from 51.4 in March; production or sales at 50.7, up from 49.3; and delivery lead time at 57.1, up from 53.6.

For more information, contact Goss at 559.278.2352.

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