Central Valley economic index hits 8-month high

An economic index based on a survey of Valley business managers has hit its highest point since it was launched in September.

The monthly San Joaquin Valley Business Conditions Index rose in April to a score of 56.7, up from 55.4 in March. A score of 50 is considered neutral, and anything over 50 suggests economic growth over the coming months.

The region's leading economic indicator increased for the fourth straight month. Colorado economist Ernie Goss, who produces the index for the Craig School of Business at California State University, Fresno, credited growth to healthy exports and an expanding agriculture sector.

"Our survey results, while still somewhat weaker than the national ... survey outcome, point to improving economic conditions in the next three to six months," Goss said.

April was the seventh time in eight months that the index has been in positive territory.

The index surveys purchasing managers from more than 160 companies in Fresno, Kings, Madera and Tulare counties, and represents a composite of scores for companies' production and sales, orders, inventories, employment, supply prices, imports and exports, and business confidence.

New orders for exports also reached an eight-month peak with a score of 57.5, Goss reported Monday. "The cheap dollar and a global economic expansion combined to boost sales and new orders from abroad," he said.

The employment index rose in April to 56.6, from a March score of 54.8, reflecting a climb out of an "employment trough" that the Valley reached in July 2010. "Based on our survey results, the region should continue to add jobs at an improving pace in the months ahead," Goss said.

Also reaching a new high in April, however, were the prices that companies pay for materials and supplies, especially energy. Those prices, Goss said, create "unacceptably high inflationary pressures at the wholesale level."

Goss said that about 40% of the managers surveyed reported that their suppliers are adding transportation surcharges to their rates to make up for rising energy prices.