Cautious optimism is the mood of top local executives, according to the Orange County Business Expectations Index.
The latest quarterly index reading checked in at 91.3, the third-highest level since the survey started in 2002. That’s up a bit from last quarter’s 89.7.
A reading of 50 indicates executives don’t expect a downturn in the economy in the next three months.
The index, which polls OC chief executives, business owners and managers, is done by California State University, Fullerton, in association with the Business Journal. The highest reading ever was 94.9 in July 2004.
“The general message from the survey is that executives are still a little bit cautious,” said Anil Puri, dean of the College of Business and Economics at Cal State Fullerton. “They expect their profitability to be better, but they are not ready to hire a large number of employees.”
Nearly 44% of respondents said they plan on adding workers in the quarter. Six percent said they intend to make cuts. About half, 51%, expect to keep employment steady. That’s up from 49% last quarter.
Labor costs aren’t expected to rise, according to 44% of companies that responded.
Gov. Arnold Schwarzenegger is getting high marks from business executives. About 88% of respondents approved of the governor’s policies, with 80% believing that they were good for Southern California.
A significant note about this quarter’s survey: Upheaval in Iraq no longer registers as a top concern among many OC executives, as it did in past quarters. Instead, 45% of executives see the overall economy as the chief concern, followed by government regulation at 15%.
For more on this story, see the April 11 edition of the Business Journal.