Press Release: Despite Worsening National Economic Outlook, Small and Medium Bay Area Businesses Still Looking to Hire, according to New Business Confidence Survey
The Bay Area Council today released its spring Business Confidence Survey, and the results show that despite the worsening economic outlook at the national level, small and medium Bay Area businesses are still looking to hire over the next six months. The business confidence index – the number that distills the survey findings – registered at 62 out of 100, up 1 point from the last survey.
A reading over 50 signals positive economic times, while below 50 is negative. Last quarter’s Survey showed the index reading at 61 – making this the seventh positive reading in a row since the summer of 2009. One year ago, the reading registered at 62 as well. For comparison, in January 2009, the index reached its all-time low of 31.
“Despite all the national talk about a dreaded double-dip recession, the Bay Area seems to be weathering the recovery much better than other regions,” said Jim Wunderman, President & CEO of the Bay Area Council. “The situation is not nearly as sunny as it was several years ago, but confidence amongst business leaders continues to slowly build. According to our survey, the best places to look for a job over the next 6 months are still in San Francisco, on the Peninsula and Silicon Valley, in industries like IT, trade, professional and business services and interestingly, for the first time in several quarters, construction and infrastructure. Small and medium sized businesses also continue to show signs of increasing their workforce over the next few months.”
The responses of the 432 CEO’s and top executives in the nine Bay Area counties surveyed between May 13th and June 5th, show that overall, 64% think Bay Area economic conditions are better than six months ago, up 6 points from last quarter’s survey. In addition, 60% said they expect a better Bay Area economy six months from now, down 1 point from last quarter.
The Survey indicates that a majority of executives, 53%, expect their workforces to remain the same over the next six months. That figure is exactly the same as last quarter’s survey. However, 33% of executives stated they planned to increase their workforce. 46% of executives in San Francisco County and 37% of executives in Santa Clara County expect to increase their workforce over the next six months. Contra Costa County and Alameda counties were the exception, with companies surveyed there expecting to increase their workforce by 21% and 27%, but also planning to decrease their workforce by 23% and 17% over the next six months – the highest reported decrease of all nine Bay Area counties.
Additionally, the Survey showed that 37% of Bay Area companies with 500-999 employees and 43% of Bay Area companies with 50-99 employees, expect to increase their workforce over the next six months.
Executives in specific industries are showing much more confidence that things will be better in six months in their sector. 70% of executives in information technology (up from 60% last quarter) and 73% of leisure and hospitality executives (up from 67% last quarter) expect their industry conditions to improve. Confidence in retail, manufacturing and the education and health services industries remained flat. 33% of government leaders surveyed expect their situation to get worse.
“We’re clearly not out of the woods yet with persistently high unemployment, but the Bay Area’s robust globally competitive technology and tourism sectors are helping the region weather the storm better than other parts of the country,” said Lenny Mendonca, Director at McKinsey & Company.
