Report Shows Business Confidence Is Up
A recent study conducted by the College of Business Administration (CoBA) at CSUSM shows that confidence among local business owners is up -- an important indicator in forecasting economic growth in the region.The Business Confidence Report, the first of its kind produced by the University, gauges the economic outlook business executives have for their company over the next 12 months in comparison to last year’s performance.Gauging the outlook of business leaders is a vital predictor for economic trends, said Jim Hamerly, director of Business Community Relations for CoBA. He explained that a southern California study has shown that executives trust the opinions of their industry peers and overwhelmingly turn to them to make sense of the economy, more so than the media, politicians or business advisors. Those business-to-business exchanges can then influence an owner’s decision. Confidence -- or the lack thereof -- affects how business owners operate and invest in their business.“Despite what media, Wall Street or Capitol Hill says about the state of the economy, business owners are generally optimistic, which is significant since uncertainty can affect critical business decisions,” Hamerly said.Nearly 60 percent of business leaders indicated that they have a positive economic outlook for their industry in 2012, while 28 percent expect the same economic performance as 2011. A big contributor to the perceived boost lies in employment, profit and revenue projections, the report suggests. One third of executives reported that they plan to hire more workers in 2012, a step that is critical toward reducing San Diego’s unemployment rate of 8.9 percent. Two-thirds predict an increase in revenue, and 55 percent expect to see greater profit this year.“CSUSM is undertaking important and valuable work to assess where business leaders are heading and their feelings about the future,” said Director of Economic Development for the City of Vista, Kevin Ham.External factors could limit that business growth, the report states. According to businesses, most perceive governmental regulations and the availability of credit to be the biggest threat to the growth and prosperity of their company in 2012.“Local economic activity is a key component in planning for businesses, yet North San Diego County previously lacked a source for this information,” said Robert Brown, professor of economics at CSUSM who studies and publishes monthly economic trends in the local housing market.“The report fills this important role,” he added, “by offering a reliable gauge of business confidence and the general economic outlook in our region.”The inaugural Business Confidence Report, which was spearheaded by the college and implemented by a Senior Experience team, surveyed 200 businesses with geographic representation from North County and San Diego companies. Organizers of the report plan to increase the number of participants to over a thousand businesses for its 2013 forecast report, which will be disseminated late this year and published in early 2013.To request a full copy of the report, visit the Business Confidence Report online.