For the 16th consecutive month, the San Joaquin Valley Business Conditions Index rose above the 50.0 growth neutral threshold. After declining for three consecutive months, the overall March index jumped to 57.2 from 52.9 in February. An index greater than 50.0 indicates an expansionary economy over the next three to six months.
Dr. Ernie Goss, research faculty with the Craig School of Business at Fresno State, says the San Joaquin Valley’s economy is following national growth trends. “Based on our surveys over the past several months, that growth should remain positive for the next three to six months.”
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: The region’s hiring gauge was healthy across a broad range of industries, soaring to 63.0 from 51.1 in February, but nearly 80 percent of businesses expect negative impacts on their 2015 operations if drought conditions continue.
- Wholesale prices: The prices-paid index, which tracks the cost of purchased raw materials and supplies, slumped to 47.0 from 47.9 in February. Goss said this indicates declining inflationary pressures at the wholesale level.
- Business confidence: Looking ahead six months, economic optimism, captured by the business confidence index, advanced to 63.1 from February’s 54.8. “Lower fuel prices and the ending of the West Coast dock dispute pushed business confidence higher for the month,” Goss said.
- Inventories: Businesses increased inventories of raw materials and supplies for the month and at a faster pace. The March inventory reading increased to 59.3 from last month’s 56.0.
- Trade: The new export order index fell to a still strong 58.4 from 66.8 in February, and the import index expanded to a still weak 48.6 from 40.9 in February.
- Other components: Other components of the March Business Conditions Index were: new orders at 49.8, down from 45.6 in February; production or sales at 52.7, up from February’s 51.5; and delivery lead time at 61.4, up from 60.4 in February.
For more information, contact Goss at 559.278.2352.