Survey reveals local economic optimism

November 16, 2003

Survey reveals economic optimism
By Rachel Raskin-Zrihen /Vallejo Times-Herald A new survey of business leaders says the Bay Area is experiencing an economic recovery, although not all the news is good.

The most recent Bay Area Business Confidence Survey, conducted quarterly by the San Francisco-based Bay Area Council, indicates an economic recovery has taken hold, with the third consecutive quarter of large gains in business confidence reported. But, the survey also indicates some serious lingering concerns.

The council is a business/CEO-led nonprofit, public policy organization founded in 1945.

Sunne Wright McPeak, the council's president and CEO, said the survey questioned more than 500 top business executives in the nine Bay Area counties between Oct. 15 and Oct. 30 and found the results mostly positive.

Rick Wells, Vallejo Chamber of Commerce president, said he's cautiously optimistic that the city may be experiencing an economic recovery.

"I think there are some indications of it taking place in Vallejo," Wells said. "However, I think we probably need to see more definitive indicators like new businesses opening up and growth of existing businesses. The holiday shopping season will be a good indicator of consumer confidence, which directly impacts our local economy."

The number of business executives in the study who said economic conditions are better now than six months ago jumped 18 points, from 23 percent to 41 percent from last quarter. And 65 percent expect further improvement in the next six months, which is up 15 points from July. The number of those reporting conditions are worse now than six months ago dropped 15 points from 26 percent in July to 11 percent this quarter.

The survey lumps Contra Costa and Solano counties together for statistical purposes. According to the survey, 78 percent of business executives reported business conditions are better now than six months ago, and 83 percent said they expect them to get better still in the next six months.

On a sliding scale of one to 10, with one being poor and 10 being excellent, respondents rate the United States' business climate at a 6.12. California's overall rating is significantly worse at 4.4, and the Bay Area's ranks lowest 4.25.

The survey also found that the larger the company, the greater the dissatisfaction with the Bay Area's business climate. High housing costs had the greatest negative impact on these businesses, followed by labor costs, taxes, transportation and traffic.

McPeak said these negative findings are "cause for concern."

But most of the signs are good, said council spokesman John Grubb.

"We saw business confidence increasing, which is a very positive sign, and it's the third quarter with growth there," Grubb said. "More people are saying positive than negative things about the business climate here, and that's a great sign. But there are still negative sentiments out there, and those may put the recovery in jeopardy."