Fresno State's Craig School of Business San Joaquin Valley Business Conditions Index declined below growth neutral for a third straight month, signaling slow to no growth for the region in the months ahead. In November, the overall index dipped to 48.3 from 48.9 in October. A year ago, in November 2011, the index read 51.7.
Business confidence remains very weak, the report said. The job index expanded slightly to 50.5 from 49.4 in October; however, survey results point to slightly negative job growth for the next three to six months and job losses in non-durable goods firms such as food processors and reductions in the average weekly hours.
56.6% of businesses in the area expect no pay raises next year. On average, supply managers project a 0.1%vwage gain for the next year. The index is a leading economic indicator from a survey of individuals making company purchasing decisions in firms in the counties of Fresno, Madera, Kings and Tulare. The index is produced by Dr. Ernie Goss, a research associate with the Craig School who uses the same methodology as that of the national Institute for Supply Management (www.ism.ws)
Wholesale prices decreased slightly to 63.7 from 65.2 in October. Goss says weaker commodity prices are linked to slower global growth in the survey. This month, on average, survey participants expect a 3.0% increase in the prices of products they purchase in the next six months. According to Goss, businesses have raised their annualized projected wholesale price index from 4% to 6% Inventories declined to 46.3 from 50.9 in October, another indicator of a slowing economy, reported Goss.
In trade, although export orders for November were up slightly (37.6) from October's 35.9, imports decreased with an index of 40.9, down from October's 46.6.
Other components were new orders unchanged at 43.1; production or sales at 48.0, up from October's 47.8; and deliveries lead time at 53.6, up slightly from October's 53.3.