Californias consumers and purchasing managers — the executives in charge of corporate buying — have seemly tempered their optimism about the future of the states economy.
Three surveys of these bosses, one statewide and two locally focused, as well as a statewide consumer confidence poll hint at a business plateau for California. Everything from growing inflation to the impact of new taxes to President Donald Trumps tough talk on trade could be creating tension for corporations and consumers alike.
Statewide, Chapman Universitys index tracking overall California factory activity shows a slight dip to 63 in the third quarter from 63.3 in the second quarter.
The poll results suggest “the California manufacturing economy is expected to expand at the same rate in the third quarter as it did in the second quarter,” Chapman wrote. “Production, inventories of purchased materials, commodity prices and employment are all expected to grow at approximately the same growth rate as the second quarter. A large number of respondents have commented on the tight labor market that is resulting in higher starting wages.”
For Orange County, Chapmans survey found the manufacturing sector a bit cautious as the Composite Index decreased to 61.2 in the third quarter from 66.2 in the second quarter. A slice of this Orange County index — measuring production — dipped sharply but remains in optimistic territory as it has been for 37 consecutive quarters.
In Riverside and San Bernardino counties, bosses saw a similar cooling of growth. The Inland Empire Purchasing Managers Index from Cal State San Bernardino was at 58.8 in June. Thats down from 60.3 a month earlier, but its the 18th consecutive month above the benchmark 50, which determines optimism vs. pessimism.
The indexs winning streak, the report notes, is “indicating sustained growth for both the manufacturing sector and the overall local economy.”
The CSUSB index, based on a survey of local purchasing managers, found 36 percent of those polled said the local business climate will be improving in the coming months; 56 percent saw unchanged prospects, and only 8 percent foresaw declines.
California shoppers feel good about today but the outlook is cloudy, according to the Conference Boards consumer confidence index for the state. It rose to 118.8 for June, a three-month high and equal to the year-ago level. But much of that upswing is due to consumers optimism about present conditions hitting a record high.
However, the poll showed California shoppers view on future expectations at a 19-month low, back to November 2016 when Trump was elected.
Have you checked out Bubble Watch …
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