Silicon Valley/San Jose Business Journal - April 21, 2006
Bay Area businesses leaders optimistic about forecast
Silicon Valley/San Jose Business Journal - April 21, 2006by Mark Calvey
Northern California businesses are increasingly bullish on their outlook for the year despite expectations that interest rates and costs for everything from labor to commodities and energy will continue escalating, according to the second annual Mechanics Bank Business Optimism Index and Survey.
The survey's findings underscore a growing sense among some observers that the foundation is being laid for another economic boom despite angst over pensions, health care, taxes, housing prices and the war in Iraq.
The Richmond bank said it was surprised by the intensity of positive expectations in the face of all the continuing economic and political uncertainty.
The majority of those surveyed - 55 percent - said they are better off now than a year ago. The bank said it found it even more "astonishing" that 84 percent of business leaders surveyed expect their companies to be better off a year from now. That figures rises to almost 90 percent for those businesses in San Francisco and Sacramento.
The Mechanics Bank Business Optimism Index inched up from 100 to 100.28 last year. The bank surveyed 1,213 business owners and senior managers at Northern California businesses with annual revenue between $50,000 and $20 million.
"What's striking is the near unanimity of many of the opinions and attitudes expressed by these businesses," said Steve Buster, president and CEO of the Mechanics Bank.
Economist Tapan Munroe said he was surprised by the survey results.
"In my 30 years as an economist I have seldom seen survey results of this type that tracked better with the economic numbers coming out of the marketplace," Munroe said. "By most measures, the Northern California economy - and the U.S. as well - are doing better than most people think."
Calvey is a reporter for the San Francisco Business Times.
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