Written by The Business Journal Staff
The San Joaquin Valley Business Conditions Index has reached its highest level since April 2015.
The January index jumped to 59.5, up from 54.5 in December 2016. An index greater than 50.0 indicates an expansionary economy over the course of the next three to six months.
Economist Ernie Goss, research associate with the Craig School of Business at Fresno State, produces the index each month from surveys of individuals making company purchasing decisions in Fresno, Madera, Kings and Tulare counties.
It was the fifth-straight month the index has been above the 50.0 growth neutral mark. The region is currently experiencing growth in manufacturing and regional construction, Goss said.
“Obviously that’s good,” Goss said. “We’re moving ahead, and we’re picking it up in our surveys.”
The employment index also picked up from 49.0 in December to 53.3 in January. About 38.5 percent of survey respondents reported finding and hiring qualified workers as the biggest challenge to their company this year.
The wholesale prices-paid index, which tracks the cost of purchased raw materials and supplies, climbed to 60.4 from 54.2 in December. That indicates rising inflationary pressure. Goss said a Fed rate hike in the first quarter of the year is likely, with nearly 31 percent of survey participants saying a rate hike would negatively impact their business.
Business confidence is reaching new highs, with an index of 70.6 last month compared to 64.4 in December.