Optimism among San Diego County employers hit a three-year low in August as a number of companies participating in a local survey indicated they would offer employees fewer work hours as summer ends, according to a forecast released Sept. 20 by the San Diego Regional Chamber of Commerce.
The chamber’s Business Outlook Index dropped to 15.6 from about 21 in July. Its previous low of 15.7 was reported in June.
The index is based on four self-reported sets of expectations during the next few months: changes in number of employees, increases or decreases in revenue, more or fewer employees and improvement or worsening of business conditions. The index ranges from 100 to -100; it’s high since August 2013 was about 31, reported in February 2014.
Only one-quarter of companies surveyed in August indicated they would offer employees more hours, while 11 percent suggested they would decrease employees’ work hours.
“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,” Dino D’Auria, executive vice president and chief banking officer at Silvergate Bank, said in a news release. Silvergate sponsors the chamber’s monthly business outlook report.
Geographically, the biggest drop in confidence took place in the county’s northern inland area, where businesses’ outlook dropped from 16 in July to 7.
By business size, companies with 11 to 49 workers were most pessimistic. Their index reading fell from 28 to 10 in August.
The chamber reported two factors were challenging local businesses: plans to increase the minimum wage, cited by 6 percent of survey respondents, and government regulations. It said a quarter of companies surveyed saw their biggest hurdles as having to do with government, as opposed to being strictly business matters.
A question new to August’s survey dealt with workplace diversity. When asked how important ethnic diversity was in the workplace, 34 percent of businesses deemed it “extremely important,” while 18 percent called it “very important.” Fourteen percent ranked diversity as “somewhat important” and 5 percent saw it as “not that important.”
The chamber found what it called an “impressive” correlation between optimism and perceived importance of ethnic diversity. It said companies greatly valuing diversity in the workplace were “far more optimistic” than those who view it as less important.