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The results point to slowed economic and business growth. An index reading greater than 50 indicates an expansionary economy over the course of the next three to six months.

“Two months of reading slightly below growth neutral do not necessarily set the stage for negative economic growth for the San Joaquin Valley,” said Dr. Ernie Goss, research faculty with the Craig School of Business at Fresno State and the author of the index.

“We will have to see several months of readings below 45 before a negative economic growth forecast will be issued,” Goss said. “However, weaker readings since January of this year are pointing to slower growth.”

According to Goss, pullbacks for the area’s durable goods producers and construction firms “more than offset growth among non-durable goods manufacturers for the month.”

The index, considered a leading economic indicator, is compiled from a survey of individuals making company purchasing decisions in Fresno, Madera, Kings and Tulare counties. The index uses the same methodology as that of the national Institute for Supply Management.

After three straight months below growth neutral, the jobs in July rose to the 50.0 threshold, expanding slightly from June’s 49.8 and May’s 49.7. Goss said that until recently local businesses have boosted employment at a strong pace.

“Over the past 12 months, the region has experienced job growth of 3 percent, which is more than double the pace of the nation,” Goss said. He expects overall job gains to be “slight” for the region in the months ahead.

Looking ahead six months, economic optimism, as captured by the business confidence index, climbed to a solid 54 from 47.9 in June.

Businesses reduced inventories of raw materials and supplies for July, causing the July inventory index to improve to 45.9 from 41.9 in June.

But the new export orders index remained below growth neutral for July, slumping to 31.5 from June’s 34.4, and the import index sank to 38.8 from 46.4 in June.

“The U.S. dollar remains relatively strong making U.S. goods less competitively priced abroad,” Goss said. “At the same time, weaker regional growth reduced imports into the area for the month.”