Sparked by an increase in hiring for the month, the San Joaquin Valley Business Conditions Index rose to its highest level since initiation of the survey in 2010. The November index was above the 50.0 threshold for the 12th consecutive month. After falling to a solid 56.1 in October, the overall index rose to a record 59.9 for November.
“Much like the national economy, the San Joaquin Valley economy is expanding at an improving pace, and based on our survey results, is 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.
umping below growth neutral for October, the regional hiring gauge climbed from 49.3 to 51.3 in November. Goss said from the beginning of the national recession in 2007 to the end in June 2009, the four-county region lost 17,200 jobs. From July 2009 to October 2014, the area had recovered all lost jobs plus an additional 5,000.
“There are currently a record number of workers employed in the region,” Goss said. “Our surveys indicate that the rate of gains will increase in the months ahead.”
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 62.1 from 60.9 in October.
- Business confidence: Looking ahead six months, economic optimism, captured by the business confidence index, increased to 55.1 from 53.5 in October. “A slowing global economy and a weak housing market offset optimism from an expanding regional and national economy and lower fuel prices,” Goss said.
- Inventories: Businesses increased inventories of raw materials and supplies for the month at a faster pace. The November inventory reading climbed to 62.8 from this past month’s 54.1.
- Trade: The new export order index slid to 48.8 from 52.6 in October and the import index declined to 48.6 from 52.2. “I expect the global economic slowdown and a stronger dollar to boost imports and restrain exports for the region in the months ahead,” Goss said.
- Other components: Other components of the November Business Conditions Index were new orders at 59.7, up from 56.0 in October; production or sales at 69.2, up from 65.0 last month; and delivery lead time at 56.7, up from 56.3 in October.
For more information, contact Goss at 559.278.2352.