Written by Associated Press
In the next three to six months, expect continued growth in durable manufacturing and lagging growth in non-durable manufacturing, including food processing, according to the latest San Joaquin Valley Business Conditions Index.
Economist Ernie Goss, research associate with the Craig School, produces the index each month from surveys of individuals making company purchasing decisions in Fresno, Madera, Kings and Tulare counties.
The overall business index hit a “solid” 58.7 for June, up from 58.1 in May, according to Goss.
An index greater than 50.0 indicates an expansionary economy over the next three to six months.
The June employment index hit 60.8, also up from 59.6 in May. It has remained above growth neutral since January.
“Over the past 12 months, the San Joaquin region has experienced strong and improving job growth at 2.2%, which is well above the pace of the nation’s 1.6%,” Goss said in a statement. “The region’s rapid expansion is boosting average hourly salaries and wages at a very strong and unsustainable pace of 7.0%. Our surveys over the last several months indicate that the San Joaquin job market will continue to expand at a pace above that of the nation through the third quarter of 2017.”
The prices-paid index, which tracks the cost of purchased raw materials and supplies, advanced to 67.3 from 65.4 in May — an indicator of “modest but elevated inflationary pressures,” Goss said. He expects inflationary pressure at both the consumer and wholesale level, with the survey revealing that area companies expect to raise they prices by nearly 2 percent over the next year.
The business confidence index slipped to a “strong” 69.1 from May’s 72.6.
The survey finds that businesses continue to expect improving conditions and profits, but “I expect a failure of D.C. to enact corporate tax cuts to shrink that confidence.”