Prerecession confidence topped for second straight quarter
Sonoma County businesses are outperforming the United States as a whole in expenditures for growth and customer demand, supporting an overall upward trend for commercial-sector confidence, according to a new report.
Sonoma County’s purchasing trends index was 68.65 — a number above 50 indicates growth — beating a national average of 53.2, according to the winter Business Confidence Survey and Report released Monday by the Economic Development Board. It marks the third year that Sonoma County has beat the national average since 2007.
The index includes new customer orders, production, employment, supplier deliveries and inventories, measured as part of a quarterly survey by the board since 2005.
Retail and wholesale distribution, one of eight industry classifications in the data, had the highest index value — 81.21. Agriculture had the second-highest at 80, followed by manufacturing at 78.41.
Almost every industry received scores above 70 for new customer orders and production, supporting the notion that consumer spending is a primary driver in Sonoma County’s economic performance, according to the report.
Methodology is modeled after the national purchasing managers index from the Institute for Supply Management. The EDB received 95 surveys out of 241 circulated to business leaders for its winter 2014 report, a response rate of nearly 40 percent.
Overall confidence above pre-recession levels
Overall business confidence continued to rank above prerecession levels, just above a historic high point measured in the summer of 2006.
Measured on a one-to-10 scale with 10 the highest possible score, Sonoma County business executives averaged 6.83 in their overall economic confidence. The historic high was 6.8, a peak that preceded a plunge in confidence to a low point of 3.2 in winter 2008. The confidence measure has risen 113 percent in following six years.
Responders averaged 7.22 in their outlook over the next six months, compared with 6.88 in the last survey. A full 100 percent of responders in the education sector said they expected to hire in the next six months, followed by 68.4 percent of responders in professional and financial services.
Meanwhile, 57 percent of business executives said they have experienced difficulty in finding qualified hires in Sonoma County.
Airport expansion joins special topics
Almost half — 46 percent — of responding businesses said they expected the lengthening of runways at Charles M. Schulz–Sonoma County Airport would help their business, and 23 percent expected no effect. The project is set to be complete this fall.
The question joined other special topics circulated as part of the regular survey.
Around 30 percent responded that a rise in consumer holiday spending had helped their business, 37.8 percent indicated no change and more than 25 percent said the question was not applicable.
Three-quarters of responders said they expected to raise wages and salaries by between 1 percent and 3 percent this year, with less than 10 percent of additional responders expecting to raise compensation more than 3 percent.
Nearly two-thirds of survey-takers — 65.3 percent — said they expected national unemployment to decline over the next six months.
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