Optimism among Orange County business leaders increased sharply heading into the new year, according to a survey to be released today by Cal State Fullerton.
The university's quarterly index of business expectations surged to 79 in late December, up from 52.6 in October. A reading above 50 means that companies expect to grow, whereas an index below 50 portends economic contraction. About 89% of the Orange County business owners, chief executives and managers surveyed said they expected overall business activity to improve or hold firm over the next three months.
That's the highest percentage since last summer and a sign that local companies are seeing stirrings of life in a stagnant economy, according to survey director Anil Puri.
"Business leaders are beginning to recover from the low expectations held during the last two quarters," Puri wrote in the Orange County Business Expectations Survey.
According to the Cal State Fullerton research, nearly 45% of businesses surveyed expect higher profits in the first three months of 2003, up from 43.1% in the fourth quarter of 2002, while the percentage who expect lower earnings has dropped to 16.3% from 21.6% over the same period.
Still, companies aren't looking to boost their payrolls significantly. Although 29% of employers said they intended to do some hiring in the first quarter, 58% said they would make no changes and 13% said they planned to cut jobs.