Index: Valley economy continues slow recovery
- Published on 07/02/2012 - 1:56 pm
- Written by Business Journal staff
The Central Valley economy will continue to grow but at a slightly lesser rate, according to the San Joaquin Valley Business Conditions Index released on Monday by the Craig School of Business at Fresno State.
The overall index for the month of June was 55.4, down from the 57.7 in May. The index is not a percentage and any score above 50 indicates expected growth over the next three to six months.
“We continue to trace a slowly improving economy,” said Ernie Goss, a research associate heading the monthly survey, in a release. “As in the past several months, companies linked to agriculture and international markets are experiencing significantly improving business activity.”
The traditionally high wholesale prices index dropped in June to 50.5 from an index of 56.0 in May.
“The degree to which inflationary pressures have cooled has surprised me. This is an important signal and indicates that the Federal Reserve can become more aggressive in its stimulation of the U.S. economy without any significant inflation fears,” Goss said. “However given current short- and long-term interest rates, there is little the Fed can do to push growth higher especially with the national elections ahead. The last thing the Fed wishes to do is enter the political fray by abruptly changing policy.”
Employment is expected to continue to grow with an index of 55.4, but down somewhat from the 57.9 in May.
Despite the positive indexes, business confidence came in at only a 49.5, but up from the 46.8 in May.
“While survey respondents are more optimistic about their own company's prospects, they remain fairly pessimistic regarding the overall economy,” Goss said.
The new export orders index rose to 67.7 in June, from 53.5 in May. However new orders as a whole decreased from 58.2 in May to 51.7 in June. The production or sales index also decreased from 59.0 in May to 52.3 in June.