The San Joaquin Valley Business Conditions index for June declined slightly into a range pointing to healthy growth in the next three to six months. The index is a leading economic indicator from a survey of individuals making purchasing decisions for firms in the counties of Fresno, Kings, Tulare and Madera.

It is produced by Ernie Goss, research faculty with the Craig School of Business at Fresno State.

Overall index

The region’s Business Conditions Index rose to 58.6 from May’s 56.9. Since bottoming out in August 2016, the index has moved into a range pointing to positive economic growth ahead.

This is the 22^nd month in a row that the index has gone above the growth neutral of 50. Both durable and non-durable goods manufacturing reported solid gains for the month. Food processing continues to be a major contributor to regional growth. As in recent months, construction and whole trade activity in the Valley continued to expand at a healthy pace.

Employment

The employment gauge move slightly higher to 59.1 from 54.7 in May. The region has experienced strong job growth at 2.5 percent over the last year—significantly above the nation’s 1.5 percent expansion in the same stretch of time. The region’s unemployment rate has now fallen to its lowest level in 12 years.

Wholesale prices

The prices-paid index, which tracks the cost of raw materials and supplies, slipped to a still inflationary 71.5 from May’s 74.2, indicating elevated inflationary pressures at the wholesale level. Both the regional wholesale inflation index and the U.S. wholesale prices have expanded by 3.1 percent, the fastest growth since 2012.

At the consumer level, the consumer price index advanced by 2.8 percent over the past 12 months.

Business confidence

Looking ahead six months, economic optimism, as captured by the business confidence index, advanced from 69.9 to 70.5. Healthy profit growth and still-low interest rates contributed to the boost. In months ahead, however, Fresno State economist Ernie Goss expected confidence to decline in coming months due to tariffs.

Inventories

The inventory index once again fell below growth neutral. The index reflects the growth or decline in supplies of raw materials and supplies, climbing from 44 to 47.

Trade

The new export orders index climbed above growth neutral from 43.9 to 50.8, while the import index slipped from 56.3 to 55.3. The expanding regional economy is supporting purchases from regional businesses.

Other components

New orders for June are 66 from 64.1. Production or sales rose 0.8 points to 65, while delivery lead time dropped 2.1 to 55.7 percent.