Beruflich Dokumente
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Winter 2013
2013
SONOMA COUNTY
Sincerely,
2011 Sonoma County Economic Development Board. The Economic Development Board (EDB) believes all data contained within this report to be accurate and the most current available, but does not guarantee its accuracy or completeness. Use of data from an outside source does not represent an endorsement of any product or service by the EDB, its members or affiliates. This publication can be made available in alternative formats such as Braille, large print, audiotape, or computer disk. Please direct requests to (707) 565-7170 and allow 72 hours for your request to be processed. This report was prepared by Matthew Liedtke.
Business Confidence
The business confidence level for Sonoma County reached a new 6-year high in the Winter of 2013 with a score of 6.36. In a survey conducted by the Economic Development Board, business executives were asked their perception of current economic conditions in Sonoma County on a 10-point scale, with a score of 1 representing the lowest possible confidence level and 10 the highest. When asked to judge the current economic conditions solely in their industry, as opposed to Sonoma County as a whole, business executives expressed higher confidence with a score of 6.39. Business confidence in Sonoma County has been strengthening since the recessionary period of 2007-08. Since hitting a low of 3.2 in the winter of 2008, confidence has soared by nearly 100%. With confidence returned to pre-recession levels, businesses will be more inclined to step up hiring, make capital investments, and increase production. Comparing business executives opinion about the performance of their industry currently and over the next six months shows an optimistic trend. The survey reveals that during this period the average confidence level of Sonoma County rises to 6.5. When business owners where asked about confidence in their specific industry, the average anticipated confidence level dipped to 6.39. Industry results were also mixed, with several indicating no change in confidence. During the Summer of 2012, when the EDB conducted its last business confidence survey, the six month forecasted confidence was 5.3. It is certainly encouraging to see business executives more confident than anticipated while adding another successive year of growth.
Response
Winter 08 3.20
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
0%
M an
0%
R et
0%
0%
0%
3 2 1
E du ca R tio C ea n on l E st st ru at e Te ctio & ch n F in P no an ro lo ci fe gy al ss S io er na N on vic l & es pr of H it/ ea G ov lth t S er vi ce A gr s M an icu lt uf ac ure R et tu ai rin l/W g D h is o tr le ib s u a H tio le os n pi ta lit y O th er
gy lo no al ch ci Te an in ces f/F vi ro er P S fit/ t ro en -P m on rn N e ov n G tio ca e du at n E st ctio l E tru es ea s ic R on rv C Se & le lth sa le ea H ho e l/W ad g ai Tr rin tu ac
uf
-6%
e th
H os pi ta r tu e ul
A gr
ic
lit y
www.sonomaedb.org 2
Purchasing Trends
The Purchasing Trends Index (PTI) value for Sonoma County in the Winter of 2013 was 70. An index score above 50 indicates that the economy is expanding. The PTI survey measures a companys performance in key industry metrics over the past two quarters. This marks the second year that Sonoma County has scored higher than the United States since 2007. This indicates that business feel less economically challenged operating in Sonoma County than in the US as a whole. By industry, technology has the highest PTI index value at 79 points, followed by agriculture with 76, and the other category with 72. Businesses that identified themselves by other where primarily in the tourism, media, and transportation industries. High index values imply that these industries performed especially well over the last two quarters. Breaking the PTI down into its components allows us to identify areas in which each industry did especially well and also where businesses struggled. Two components, new customer orders and production, indicated rapid expansion by scoring above a 70 in each industry. The magnitude of the scores in new customers further suggests that more consumer spending is a main driver of Sonoma Countys economic performance. The results in the employment component were positive, with industries indicating that they are hiring more employees or providing more hours for current employees.
80 70 60 50 40 30 20 10 '05
70
'06
'07
'08
'09
'10
'11
'12
'13
PTI By Industry
80 70 60 50 40 30 20 10 0
& Re C a on l E st st ru at ct e io n
re
er
rin
al
th
l/W T h ra o de le s
tu
tu
ac
ul
uf
gr
an
50
50
50
50
et
ai
50
Te c
hn
ic
ol
og
100
www.sonomaedb.org 3
Looking Forward
The business outlook over the next six months for Sonoma County is positive in several industries. A large proportion of businesses reported wholesale profits and investments in locations and equipment are expected to increase in the future. While employment and exports showed strong performance, the majority of respondents indicated that these categories would remain unchanged. The employment outlook for agriculture and manufacturing are among the strongest of all industries, with 67% and 61% of business executives anticipating a hiring increase, respectively. On the other hand, health services reported a negative outlook, with 50% predicting a decrease in employment. The six month investment outlook broken down by industry shows strong expectations across the board and most notably in agriculture, and non-profits and government. About two-thirds of business executives in hospitality, technology, and manufacturing have a positive attitude towards investments over the next six months. In contrast, health service representatives reported a negative-neutral outlook. When asked their attitude toward significant capital expenditures, the majority of business executives responded that they were cautious. Capital expenditure is important for the continued growth of infrastructure and productivity of Sonoma County. Uncertainly regarding both the United States and European economies prevents capital expenditure because businesses are not sure they will return a profit on their investment.
Full-time employees
Investments in LocationsEquipment
Net Profits
Exports
Decrease
No Change
Decrease
No Change
10.8%
54.5%
34.6%
Hospitality Prof/Financial Services Real Estate & Construction Retail/Wholesale Trade Technology Health Services
0% 20% 40% 60% 80% 100%
www.sonomaedb.org 4
How do you anticipate wage and salary rates to change in Sonoma County next year?
2%
11%
32% 33%
1-2% 2% +
22%
How you do you predict the national unemployment rate to change in the next 6 months?
12.2% Decline
41.1%
No Change
46.7%
Rise
Total
1%
8%
32%
32%
0%
20%
40%
60%
80%
100%
www.sonomaedb.org 5
Respondent Summary
The Economic Development Board distributed 234 surveys representing 11 industry sectors in order to gather opinions about the confidence of Sonoma Countys businesses. The EDB received 106 surveys in response, for a response rate of 45.2%. This is a high enough response rate to construct a snapshot of the business sentiment in Sonoma County. The EDB attempted to survey a broad range of businesses when conducting the Business Confidence Survey. Using NAICS designations, we asked respondents to match themselves to the industry that closest represented their business. The four most represented industries responding to the survey were Professional and Financial Services (17.8%), Other (16.8%), Retail and Wholesale Trade (15.9%), and Real Estate and Construction (14.0%). Agriculture, Health Services, and Education were the least represented industries. The most common business size of those that responded was in the 16-50 range. The 51-100 range had the second highest frequency, with 22 firms reporting that many employees. The third highest was 1-15 employees, with 21 responding firms having that many employees. There were 10 total firms that had either 250-500 or 500+ employees. This shows a good representation of small, medium, and large businesses included in the EDBs survey.
Response Rate
Responded Did Not Respond
45.2%
Respondents by Industry
2.8% 2.8% 2.8% 1.9% 0.9%
Prof/Financial Services
17.8%
11.2% 16.8% 13.1%
Other Retail/Wholesale Trade Real Estate & Construction Manufacturing Hospitality Technology
14.0%
15.9%
35 30
Frequency of Response
Number of Employees
www.sonomaedb.org 6
Index Methodology
An index is an economic tool that is used to make general comparisons across a range of metrics. The Sonoma County purchasing trends index is modeled after the national Purchasing Managers Index from the Institute for Supply Management (www.ism.ws). It is intended to provide a measurement for the pace at which an economy is expanding or contracting. The national PMI uses information detailing companies new orders, production, employment, supply deliveries and inventories. Sonoma Countys index mirrors the PMI in computation. However, due to differences in compilation methodology, the two indices may not be directly comparable. The formula for the PTI in each category is, using the responses to the question, What has happened to the following within your company in the past quarter? with regard to new customer orders, production, employment, supplier deliveries and inventories. Respondents then chose answers of Increased, Decreased, or Unchanged. The indices for each category were then calculated by: (I + 0.5*U)/N where I is the number of people responding increased, U is the number of people responding unchanged and N is the number of people responding to this particular question. Once all of the indices have been computed, the numbers are inserted into the overall PTI formula of: PTI = 0.3 * O + 0.25 * P + 0.2 * E + 0.15 * S + 0.1 * I, where PTI = Purchasing Managers Index; O = New Customer Orders; P = Production; E = Employment; S = Supplier Deliveries; I = Inventories. The following industries comprise the PTI: Real Estate and Construction,Manufacturing, Retail and Wholesale, Agriculture, Technology, and Other. The Sonoma County Business Confidence Index is the mean of all respondents perceptions of Sonoma Countys current economic situation on a scale of 1-10. Due to adjustments in methodology, some percentages differ from those cited in earlier Sonoma County Business Confidence reports.
Any feedback, suggestions, or comments can be directed to the Sonoma County Economic Development Board at edb@sonoma-county.org or (707)-565-7170.
www.sonomaedb.org 7
With acknowledgement and appreciation to local key businesses supporting Sonoma County Economic Development: Director
Executive
Sponsors
OM
CO
U
NT
Y
SO
C A L IF O R N IA
RE PU B L IC
Economic Development Board 401 College Avenue, Suite D Santa Rosa, CA 95401 (707) 565-7170 www.sonomaedb.org
A G R I C U LT U R E INDUSTRY R E C R E AT I O N