For the eighth consecutive month, the San Joaquin Valley Business Conditions Index points to growth. The overall July index rose to 57.3 from 57 in June, thanks in large part to increased construction.
“Construction activity continues to improve in the region, spilling over into the broader economy. Additionally, expansions in food processing and wholesale trade firms boosted July readings,” said Dr. Ernie Goss, research faculty with Fresno State’s Craig School of Business.
The index, produced by the Craig School, is a leading economic indicator from a survey of individuals making company purchasing decisions in the counties of Fresno, Madera, Kings and Tulare.
The index uses the same methodology as that of the national Institute for Supply Management.
Other survey findings:
- Employment: After moving below growth neutral for January, the hiring gauge has moved above the 50.0 threshold for the past six months. The job index climbed to a healthy 58.1 from 57.8 in June. According to Goss, over the past year, the region’s unemployment rate has declined by approximately 2 percent with the addition of more than 10,000 jobs, but average hourly earnings have remained flat over that same time period.
- Wholesale prices: The prices-paid index, which tracks the cost of purchased raw materials and supplies, increased to a level indicating elevated inflationary pressures at the wholesale level. The wholesale inflation gauge jumped to 70.2 from 69.8 in June.
- Business confidence: Looking ahead six months, economic optimism, captured by the business confidence index, advanced to 61.3 from 58.8 in June.
- Inventories: Businesses reduced inventories of raw materials and supplies for the month. The July inventory reading sank to 47.5 from June’s 53.9.
- Trade: The new export orders index fell to 43.5 from June’s weak 48.2. Goss said that given the importance of export orders to regional growth, readings over the past two months indicate that exports will dampen growth somewhat in the months ahead. The regional import reading for July advanced to a weak 49.3 from June’s 48.2.
- Other components: Other components of the July Business Conditions Index were new orders at 62.5, up from 55.6 in June; production or sales at 62.6, up from June’s 58.3; and delivery lead time at 56.1, down from last month’s 59.3.
For more information, contact Goss at 559.278.2352.