Despite a dip in the overall San Joaquin Valley Business Conditions Index, the October index still points toward growth. For the 11th consecutive month the index remains above the 50.0 threshold, falling to a still healthy 56.1 in October from 58.5 September.

“Much like the national economy, the San Joaquin Valley economy is growing and based on our survey results, expected to continue to grow in the next three to six months,” said Dr. Ernie Goss, research faculty with Fresno State’s Craig School of Business.

For the first time since January, the regional hiring gauge fell below growth neutral, slipping to 49.3 from 54.9 in September. “There are currently a record number of workers employed in the region, but employers are expanding output primarily by increasing hours for current workers and adding temporary workers,” Goss said. “But I think the October dip is temporary with hiring.”

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:

  • Wholesale prices: The prices-paid index, which tracks the cost of purchased raw materials and supplies, advanced to a level indicating only modest inflationary pressures at the wholesale level. The wholesale inflation gauge climbed to 60.9 from 59.4 in September.
  • Business confidence: Looking ahead six months, economic optimism, captured by the business confidence index, declined to 53.1 from 57.1 in September.
  • Inventories: Businesses increased inventories of raw materials and supplies for the month but at a faster pace. The October inventory reading climbed to 54.1 from this past month’s 51.5.
  • Trade: The new export order index remained above growth neutral but did decline to 52.6 from September’s 55.1. The stronger U.S. dollar, which makes U.S. goods less competitively priced abroad and foreign goods more attractively priced in the U.S., lowered new export order growth.
  • Other components: Other components of the October Business Conditions Index were new orders at 56.0 from 68.7 in September; production or sales at 65.0, up from 61.2 last month; and delivery lead time at 56.3, up from 55.9 in September.

For more information, contact Goss at 559.278.2352.

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