For the fourth straight month, the San Joaquin Valley Business Conditions Index remains in a range pointing to solid growth in the next three to six months. The December index dipped slightly to 54.5 from November’s 55.6 reading. An index greater than 50 indicates an expansionary economy over the course of the next three to six months.
“After three straight months with readings below growth neutral the past summer, the index has now moved above growth neutral for four straight months,” said Dr. Ernie Goss, research faculty with the Craig School of Business. “The region is currently experiencing manufacturing growth combined with upturns in regional construction. Furthermore, growth was recorded in wholesale trade and distribution.”
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 index uses the same methodology as that of the national Institute for Supply Management.
Other survey findings:
- Employment: After five straight months of advancing above growth neutral, the hiring gauge fell slightly below the 50.0 threshold. The employment index sank to 49.0 from November’s 56.2. “Over the past 12 months, the San Joaquin region has experienced job growth of 1.8 percent, which is a bit above the pace of the nation. Our surveys over the last several months indicate that this positive regional gap will continue for the first half of 2017,” Goss said.
- Wholesale prices: The prices-paid index, which tracks the cost of purchased raw materials and supplies, sank to 54.2 from 58.5 in November indicating muted inflationary pressures at the wholesale level.
- Business confidence: Looking ahead six months, economic optimism, as captured by the business confidence index, rose to very strong 64.4 from November’s 59.4.
- Inventories: In another show of economic confidence, businesses increased inventories of raw materials and supplies in the final month of 2016. The December inventory climbed to 62.0 from 57.4 in November.
- Trade: The new export orders index moved above growth neutral for December. The index slipped to 50.8 from 51.5 in November. The import index stood at 49.1, which was up from 48.3 in November.
- Other components: Other components of the December Business Conditions Index: new orders at 54.9 matched November’s reading; production or sales at 54.9, down from November’s 55.7; and delivery lead time at 51.8, down from last month’s 53.6.
For more information, contact Goss at 559.278.2352.