January 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://www.youtube.com/watch?v=88innEf8hEI
San Joaquin Valley Economic Indicator Shows Growth:
Rising Regulatory Costs a 2015 Concern
January survey results at a glance:
 Leading economic indicator falls slightly from December but continues to point to growth.
 More than one-third see rising regulatory burdens as the biggest 2015 economic challenge.
 Inflationary pressures at the wholesale level cool again.
 Firms expanded hiring but at a slower pace than in December.
PMIs for U.S. & San Joaquin Valley, Oct. 2013 – January 2015
61
U.S.
59
57
55
53
51
49
47
San Joaquin Valley
San Joaquin Business Conditions Index – p. 2 of 3
For Immediate Release: Feb. 2, 2015
FRESNO, CA-For the fourteenth 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, Madera, Kings and Tulare, rose to a its highest level since initiation of the survey in 2010 and
points to positive and improving 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: After climbing to a record high 59.9 in November, the overall index has moved
lower for the last two months. However, the index at 54.0, and down from 55.0 in December, remains
in a range indicating solid growth in the months ahead. 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.
“Much like the national economy, the San Joaquin Valley economy is expanding at a healthy
pace. Based on our surveys over the past several months, that growth should remain strong for the
next 3 to 6 months,” said Ernie Goss, Ph.D., research faculty with the Craig School of Business at
California State University, Fresno.
This month survey participants were asked to identify the biggest economic challenge facing
their firm for 2015. More than one-third, or 35.7 percent, named higher regulatory costs as the greatest
2015 challenge while 21.4 percent reported that declining customer demand was the largest potential
obstacle for their firm for 2015.
Employment: After slumping below growth neutral in October of last year, the regional hiring
gauge has moved above the 50.0 threshold. The employment index slipped to 52.3 from 54.5 in
December.
“The region is adding jobs at an annual pace approaching 3.0 percent which by historical
standards is very healthy. Job additions for business services, engineering and information technology
more than offset pullbacks in manufacturing jobs. I expect the unemployment rate to continue to decline
through the first half of 2015,” reported Goss.
Wholesale Prices: The prices-paid index, which tracks the cost of purchased raw materials
and supplies, slumped to 54.9 from 59.9 in December. “Just as in other regional surveys and the
national survey, the San Joaquin Valley inflationary gauge signals only modest and declining
inflationary pressures at the wholesale level. This month, survey participants, on average, expect
prices at the wholesale to grow by 2.5 percent in 2015. This is up from actual 1.2 percent gain at the
national level in 2014,” said Goss.
San Joaquin Business Conditions Index – p. 3 of 3
Business Confidence: Looking ahead six months, economic optimism, captured by the
business confidence index, grew slightly to 64.2 from 64.1 in December. “Optimism from lower fuel
prices more than offset economic pessimism stemming from global economic concerns,” said Goss.
Inventories: Businesses increased inventories of raw materials and supplies for the month but
at a slow pace. The January inventory reading increased to 52.9 from last month’s 51.9.
Trade: The new export order index slid to 41.9 from 46.3 in December and the import index
rose to a very weak 44.3 from 38.6 in December. “I expect the global economic slowdown and a
stronger dollar to continue to restrain exports for the region in the months ahead,” reported Goss.
Other components: Other components of the January Business Conditions Index were: new
orders at 45.7, down from 45.3 in December; production or sales at 57.6, down from December’s 61.6;
and delivery lead time at 61.6, down slightly from 61.7 in December.
Table 1 details survey results for January 2014, last month and January 2015. February survey
results will be released on the first business day of next month, March 2.
Table 1: Overall and component indices for last 2 months and one year ago (above 50.0
indicates expansion)
San Joaquin Valley
Leading economic indicator
New orders
Production or sales
Employment
Inventories
Delivery lead time
Wholesale prices
Imports
Export orders
Business confidence
January 2014
50.8
50.3
49.3
49.5
48.1
57.1
66.4
52.6
45.2
48.4
December 2014
55.0
45.3
61.6
54.5
51.9
61.7
59.9
38.6
46.3
64.1
Craig School of Business: http://www.fresnostate.edu/craig/ubc/sjvs.html
Follow Goss: Twitter at http://twitter.com/erniegoss or www.ernestgoss.com
Blog: http://economictrends.blogspot.com
January 2015
54.0
45.7
57.6
52.3
52.9
61.6
54.9
44.3
41.9
64.2