Press Release: AFTER SLIGHT DIP OVER THE SUMMER, BAY AREA BUSINESS CONFIDENCE TRENDS UPWARD AGAIN
SAN FRANCISCO, CA — The Bay Area Council today released its fall Business Confidence Survey, and the results show that Bay Area CEO’s and executives are feeling more positive about the Bay Area economy, however, they expect the current status quo of slow growth and recovery to continue. The business confidence index – the number that distills the survey findings – registered at 58 out of 100, up 2 points from the last survey, but still down 4 points from May.
A reading over 50 signals positive economic times, while below 50 is negative. Last quarter’s Survey showed the index reading at 56 – making this the fifth positive reading in a row since the summer of 2009. One year ago, the reading registered 53, and in January 2009, the index reached its all-time low of 31.
“Increases in the stock market, actions by the Fed, and our slow, but continued recovery are providing confidence that things are getting better, more than they are getting worse,” said Jim Wunderman, President & CEO of the Bay Area Council. “Small and medium sized companies are still very reluctant to hire new workers, but larger corporations are showing signs that they might be expanding their workforces over the next couple of months.”
The responses of the 473 CEO’s and top executives in the nine Bay Area counties surveyed between November 10th and November 30th, show that overall, 47% think Bay Area economic conditions are better than 6 months ago, up 6 points from last quarter’s survey. In addition, 53% said they expect a better Bay Area economy 6 months from now, up 9 points from last quarter.
The Survey indicates that a majority of executives, 56%, expect their workforces to remain the same over the next 6 months. However, 27% of executives stated they planned to increase their workforce. 41% of executives in San Francisco County and 37% of executives in San Mateo County expect to increase their workforces over the next 6 months. Additionally, the Survey showed that 50% of Bay Area companies with over 10,000 employees expect to increase their workforce over the next six months, an increase of 41 points since last quarter’s survey.
In certain industries, there is much optimism that things will be better in 6 months. 52% of executives in professional and business services, and 94% of leisure and hospitality executives expect their industry conditions to improve. Entering the holiday season, 22% of retail executives expect their industry to improve. Other noteworthy areas expecting better industry conditions in 6 months include: manufacturing (47%), information technology (47%), and financial services (46%).
Finally, when asked, “Which of the following issues is having the biggest impact on your business at this time,” 74% of executives listed the overall economy, out of choices that included: financial regulation (7%), healthcare reform (6%), the tax rate (6%) and debt and deficits (4%).
“While there is still a large degree of uncertainty in executives’ outlook, the most promising news in this quarter’s survey is big corporations’ intent to start hiring in the next six months. If that comes true, it will be welcome news for the recovery,” said Lenny Mendonca, Director at McKinsey & Company.
