Hurricanes, inflation, higher interest rates,they’re starting to weigh on local executives’ minds.
That’s according to California State University, Fullerton’s fourth-quarter business expectations index, which checks in at 75.9, its lowest level since the war in Iraq began more than two years ago.
The latest reading is down from 83.6 last quarter and marks the second consecutive quarter of decline.
The index hit a low of 31.6 in the spring of 2003 at the onset of the Iraq war. It dramatically rebounded a few months later after the initial ground war ended quickly. The index has been at 80 or higher for the past two years.
The current outlook certainly isn’t one of doom and gloom.
Some 84% of executives surveyed expect overall business activity to improve or stay the same in the fourth quarter, down slightly from 87% last quarter. And a general index reading above 50 indicates that Orange County executives, business owners and managers are optimistic.
The index, which began in 2002, hit a peak of 94.9 for its forecast in the third quarter 2004. The quarterly index is based on a survey by Cal State Fullerton’s Institute for Economic and Environmental Studies in association with the Business Journal.
“The index indicates that business is concerned about the future, and both the immediate reasons are Hurricanes Katrina and Rita,” said Anil Puri, dean of the College of Business and Economics at Cal State Fullerton. “But the longer-term concerns are indicated by fear of higher interest rates and energy pricing.”
For more on this story, see the Oct. 10 edition of the Business Journal.
