The Sonoma County business Confidence Index dropped 19 percent to 3.62, the lowest it’s been in its 10 year history. Submitted.
Sonoma County executives are more pessimistic about the economy than they’ve been in a long time. The Sonoma County Economic Development Board (EDB), in partnership with the Sonoma County Workforce Investment Board, recently released the Winter 2008 Business Confidence Report. The EDB has conducted this survey for about 10 years, interviewing more than 200 executives.
“I think it just shows we’re reflecting the national trend about concern with the economy,” said Ben Stone, director of the EDB. “Parts of the recession have come home to other parts of the country.”
Among the findings:
Business confidence is down and dropping
The Sonoma County Business Confidence Index dropped to 3.62, down 19 percent since summer 2008 and 36.4 percent since from fall 2007. The index is measured on a 10-point scale, with a score of 1 representing the lowest possible confidence level and 10 the highest. Business executives’ confidence within their industries decreased 24 percent from summer 2008. Sonoma County executives foresee greater challenges over the next six months and predict summer business confidence may fall even further to 3.20. Business confidence hovered around 6.5 for most of 2004 through 2006.
Sonoma County more challenged than the national average
Sonoma County’s businesses feel more challenged than the national average, according to the local Purchasing Trends Index (PTI), when compared with the U.S. Purchasing Manager’s Index (PMI). Stone said companies aren’t folding, but they’re not expanding. Many are holding off on capital investments.
Manufacturing and retail stronger
Those surveyed from the manufacturing industry reported the highest level of business confidence, while those from the real estate/construction industries reported the lowest. The survey also included executives who work in agriculture, education, health services, hospitality, nonprofit/government, retail, technology and professional/financial services. All industries experienced losses in confidence compared with the prior, except retail/wholesale, which saw a slight gain.
Caution with capital expenditures
About 82 percent of executives reported a cautious attitude towards overall significant capital expenditures. Executives didn’t report that access to capital has worsened. Nearly half said it has remained the same over the past six months. A third said it improved and 15.2 percent said it had worsened.
Economy and employment to grow again within two years
About 56 percent of those surveyed expect the economy to be growing again within one to two years. Of the rest, 22.7 percent think it will be sooner and 16.7 percent think it will take two to four years. The majority of respondents expect national unemployment to rise through 2009, with only 7.6 percent expecting unemployment rates to fall during the year.
