The region’s subprime mortgage woes are weighing heavy on the minds of Orange County chief executives, business owners and managers.
After rebounding for the first quarter, sentiment among the group slipped for the second quarter, according to California State University, Fullerton’s quarterly business expectations survey.
“It seemed like there’s a significant downward shift and deterioration in their perception of where the economy is headed,” said Anil Puri, dean of the College of Business and Economics at Cal State Fullerton. “It does not mean a recession. It simply means slowing in the rate of growth.”
The index is at 70.6 for the second quarter, down from the prior quarter’s 83.1. A reading of 50 or more indicates executives expect growth in the quarter.
The first quarter’s index marked a six-month high after two consecutive quarters of decline. In the fourth quarter, sentiment dropped to 69.6 from 81.7 amid the housing and economic slowdown.
The index was at a high in summer 2004 at 94.9. It hit its lowest point, 31.6, at the start of the Iraq war in spring 2003.
The slip in confidence this quarter mainly had to do with concerns about the subprime mortgage industry’s effect on the economy as a whole, Puri said.
For more on this story, see the April 2 issue of the Business Journal.
