Executive expectations for business growth in Orange County are at a low.
A survey by California State University, Fullerton for the first quarter saw the fourth consecutive drop in executive sentiment amid growing fears of a recession.
The survey’s index came in at 29.1, down from 41.5 for the fourth quarter, meaning less than 30% of executives surveyed expect to see growth in the quarter.
“It appears that finally the gloom is spreading beyond the housing sector,” said Anil Puri, dean of the College of Business and Economics at Cal State Fullerton.
The index hit a peak early last year at 83.1 and dropped off throughout the year as more housing and credit problems surfaced.
The survey shows sentiment of local chief executives, business owners and managers is worse than the previous low of 31.7, which came after the onset of the Iraq war in 2003.
A reading of lower than 50 indicates executives don’t expect growth in the quarter.
Most respondents said the credit crisis hasn’t had a major impact on their businesses. Only 15% said the problem has had a considerable to devastating effect on their businesses. The rest said it has had no impact to a moderate one.
The outlook for hiring dimmed with about 20% of respondents saying they will lay off workers in the first quarter, up from 13% in the last survey.
About 54% said no change would be made to their workforce, which is down from 61%.
A quarter said they would hire more, the same as in the fourth quarter.
“The consolation is that the majority are not going to cut back,” Puri said.
For more on this story, please see the Jan. 7 edition of the Business Journal.
