June San Joaquin Business Conditions Index
For More Information Contact:
Ernie Goss Ph.D., 559-278-2352
University Business Center
Craig School of Business
California State University, Fresno
Goss video summary at: https://youtu.be/8bkZPzxtUGs
San Joaquin Valley Economic Indicator in Healthy Growth Range:
Manufacturers Adding Jobs
June survey results at a glance:
 Leading economic indicator soars higher indicating healthy growth ahead.
 Wholesale inflationary pressures rise for the month.
 Healthy job gains for the month as manufacturing adds jobs for the month.
 Only one in six firms report negative impacts from the drought.
 Almost two-thirds of businesses expect negative impacts if drought continues.
 Strong dollar restrains new export orders for the month.
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San Joaquin Business Conditions Index – p. 2 of 3
For Immediate Release: July 1, 2015
FRESNO, CA-For the nineteenth consecutive month, the San Joaquin Valley Business
Conditions Index rose above the 50.0 growth neutral threshold. The index, a leading economic
indicator from a survey of individuals making company purchasing decisions for firms in the counties of
Fresno, Kings, Madera, and Tulare, fell, but continues to point to positive growth for the next 3 to 6
months. The index is produced using the same methodology as that of the national Institute for Supply
Management (www.ism.ws).
Overall Index: The index rose for the third time in the past four months. The June index
climbed to 58.3 from May’s 55.0. June’s reading is in a range indicating positive and healthy growth
into the fourth quarter of this year. An index greater than 50.0 indicates an expansionary economy over
the course of the next three to six months. Survey results for the last two months and one year ago are
listed in the accompanying table.
“According to our survey results over the last several months, economic growth will improve
over the next 3 to 6 months. Non-durable goods manufacturers, including food processors, continue to
experience healthy business growth. As profiled in the accompanying figure, monthly survey results for
the San Joaquin Valley continue to be much stronger than comparable U.S. numbers,” said Ernie Goss,
Ph.D., research faculty with the Craig School of Business at California State University, Fresno.
Employment: After slumping below growth neutral in October of 2013, the regional hiring
gauge has moved above the 50.0 threshold each month since. The employment index jumped to 62.6
from 59.7 in May. “Hiring was healthy across a broad range of industries in the area - from food
processors to wholesale trade. The region’s unemployment rate remains above the U.S. rate, but is
trending downward at a solid pace. Based on our survey, I expect the jobless rate to move even lower
over the next 3 to 6 months,” reported Goss.
Wholesale Prices: The prices-paid index, which tracks the cost of purchased raw materials
and supplies, expanded from 55.0 in May to 60.2 in June. “Just as in other regional surveys and the
national survey, the San Joaquin Valley inflationary gauge has strengthened, but continues to indicate
only modest inflationary pressures at the wholesale level,” said Goss.
Business Confidence: Looking ahead six months, economic optimism, captured by the
business confidence index, slipped to 54.1 from May’s 54.3. “Even with improving national readings for
housing, retail sales, hiring and a growing regional economy, the state drought continues to restrain
business confidence in the region,” said Goss.
Inventories: Businesses increased inventories of raw materials and supplies for the month and
at a faster pace than for May. The June inventory reading expanded to 57.5 from last month’s 53.5.
San Joaquin Business Conditions Index – p. 3 of 3
Trade: The new export order index advanced to a weak 49.1 from May’s 43.2, and the import
index increased to a frail 49.8 from 44.0 in May. “The strong U.S. dollar, which makes U.S. goods less
competitively priced abroad, is negatively affecting regional exports. On the other hand, the import
reading is surprise to me and should advance in the months ahead,” said Goss.
Other components: Other components of the June Business Conditions Index were: new
orders at 56.2, up from 50.8 in May; production or sales at 56.6, up from May’s 51.6; and delivery lead
time at 58.6, down from 59.6 in May.
Table 1 details survey results for June 2014, last month and June 2015. July survey results will
be released on the first business day of next month, August 3.
Table 1: Overall and component indices for last 2 months and one year ago (above 50.0
indicates expansion)
San Joaquin Valley
June 2014
May 2015
June 2015
Leading economic indicator
57.0
55.0
58.3
New orders
55.6
50.8
56.2
Production or sales
58.3
51.6
56.6
Employment
57.8
59.7
62.6
Inventories
53.9
53.5
57.5
Delivery lead time
59.3
59.6
58.6
Wholesale prices
69.8
55.0
60.2
Imports
53.1
44.0
49.8
Export orders
48.2
43.2
49.1
Business confidence
58.8
54.3
54.1
Craig School of Business: http://www.fresnostate.edu/craig/ubc/sjvs.html
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