San Diego, California - Confidence among San Diego County businesses continues to fluctuate in this month’s Silvergate Bank-sponsored Business Forecast as the Business Outlook Index tests a new low, dropping to 15.6. Some of this downturn is attributed to businesses offering fewer work hours to employees as summer ends. This month’s Forecast also asked about diversity in the workplace, finding that feelings are mixed as to the importance of diversity on business success and the majority view their industry as adequately diverse. Most notable is the finding that companies that place a high value on diversity in the workplace are far more optimistic over the next few months than firms which see it as less important.
Statement from San Diego Regional Chamber: “At the Chamber, we know through our members that social inclusion in the workplace is a very important aspect of economic development and growth,” said Jerry Sanders, President and CEO of the San Diego Regional Chamber. “Not only is inclusion linked to a stronger economy, but inclusion - whether it is ethnicity, LGBT, gender, or race - unleashes the economic potential of our greatest assets: our people.”
Statement from Business Forecast Sponsor: “While we continue to see an overall regression in optimism over the last two years, we remain positive in our overall outlook on the economy,” said Dino D’Auria, Executive Vice President and Chief Banking Officer at Silvergate Bank. “One area where we will hopefully see some improvement is workforce hours as seasonal holiday jobs could lift that indicator and provide some much needed optimism to the overall outlook.”
Forecast: Confidence among San Diego County businesses continues to fluctuate in this month’s Silvergate Bank-sponsored Business Forecast. The Business Outlook Index (BOI) tests a new low as it moves to 15.6. The previous low, set only two months ago, was a tick higher at 15.7. The BOI ranges from -100 to +100, with zero being neutral, so the overall outlook is still in somewhat positive territory.
Some of the drop in this month’s outlook can be attributed to businesses offering fewer work hours to employees as summer ends. Currently, only 25 percent will offer more hours and 11 percent say they will decrease the hours their workers get.
The survey also shows that businesses within the City of San Diego have lost some momentum. The trend since the beginning of this year for business located in the city has been very stable, but this month their outlook has dropped to a poor 14. Looking outside the city, firms located in the county’s north inland area took the biggest hit. Businesses there went from a BOI of 16 the previous quarter to 7. And by business size, medium-sized businesses with 11 to 49 employees have taken the brunt of this month's drop. They regressed from a healthy 28 all the way down to 10 in this month's survey. The main culprit of all of this downward movement is the anticipated tightening of workforce hours.
In terms of new challenges businesses are facing, the minimum wage increase remains at the forefront for many businesses. Currently, 6 percent say it is a new challenge they are dealing with. Government regulations tops the list of other concerns. In total, one-quarter indicate their biggest challenge relates to government rather than being a business-related issue.
This month the survey asked county businesses about ethnic diversity in the workplace. The results show mixed feelings towards the value of ethnic diversity in the workplace. Forty-eight percent said diversity is very or extremely important to the success of a business. However, 22 percent regard it as unimportant and another 30 percent said it’s somewhat important.
Analysis of these results shows an impressive connection between outlook and importance of ethnic diversity. Companies that highly value diversity in the workplace are far more optimistic over the next few months than firms which see it as less important. In fact, businesspeople who say it is entirely unimportant for a workplace to be ethnically diverse slide into slightly negative territory on the BOI. The results suggest there is a real link between attitudes on diversity and optimism for improving business conditions in the near future.
We also asked firms whether companies in their industry ought to become more ethnically diverse. Despite nearly half the businesses placing a high value on diversity, 60 percent say their industry is adequately diverse.
Those who place more value on ethnic diversity in the overall workplace are much more likely to call for greater diversity in their own industry. Those in the arts and culture space also tend to think the industries they are involved in could use more ethnic diversity.
About the Business Forecast
The San Diego County Business Forecast, sponsored by Silvergate Bank, is a scientific look at where our region's economy is headed. The survey for this month’s installment was fielded August 16-31, 2016 by Competitive Edge Research & Communication using responses from 200 randomly-selected members of the San Diego, East County, Alpine, Escondido, Lakeside, Vista, Santee, Encinitas and National City Chambers of Commerce. One-third of the members were invited to complete the survey online. Those members who initially did not respond were invited to complete the survey over the phone.
The Business Outlook IndexTM (BOI) is comprised of four self-reported assessments regarding the next three months: Will a respondent’s business increase or decrease its number of employees, experience an increase or a decrease in revenue, increase or decrease the number of hours its employees work, and experience an improvement or a worsening of business conditions. For each assessment, definite and positive responses are scored 100, probable and positive responses are scored 50, neutral responses are scored 0, probable and negative responses are scored -50 and definite and negative responses are scored -100. The scores are summed and divided by 4 to get a range for the BOI of -100 to +100, with zero being a neutral outlook. Visit http://sdchamber.org/businessforecast to see past Business Forecasts.
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About The San Diego Regional Chamber
The San Diego Regional Chamber is the hub for connections and collaboration among the regional business community, and uses that clout to advocate for public policies and candidates that support economic growth and the creation of jobs for all businesses. As the largest Chamber on the West Coast, representing approximately 2,500 businesses and an estimated 300,000 jobs, the San Diego Regional Chamber is fighting to make San Diego the most business-friendly region in California. For more information, please visit SDChamber.org or call 619-544-1300.