Silicon Valley Begins New Year With No New Optimism, SCU Business Index Shows

Business Wire, Jan 29, 2003

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 29, 2003

Survey by Leavey School of Business Shows That Business Optimism

in Silicon Valley Continues in Seven-month "Holding Pattern"

Seven months and holding: That's the pattern continuing for Silicon Valley business executives and managers, according to the latest monthly survey of business optimism in the Silicon Valley, the Santa Clara University Business Index, released today.

Amid mixed signals about the overall U.S. economy and anxiety about war, the January survey by SCU's Leavey School of Business was conducted after some details of the President's tax cut were revealed but before his State of the Union address.

The latest SCU Business Index shows that Silicon Valley executives and managers continue to be only slightly optimistic about their business prospects in the next six months. The SCU Business Index responses tracking business optimism have remained static since June 2002.

"Events on the global stage appear to be trumping any local trends right now," said SCU economist Kris Mitchener.

"Although there are a few promising signs that the chip producers may be in the early stages of a recovery, our index suggests that sentiment has not improved over last month. Uncertainty over proposals to stimulate the national economy and reduce unemployment, and heightened global tensions are keeping firms in the Valley in a holding pattern."

The Santa Clara University Business Index debuted in October after a year in development. The survey has been tabulating results since February 2002 to affirm its validity and establish trends.

This monthly business indicator, the only one of its kind for the Silicon Valley region, is a composite index that every month tracks business conditions in Silicon Valley companies and their markets, as well as trends in job availability in the region, by polling the region's executives and managers.

The SCU Business Index asks managers and executives in a wide range of businesses in Silicon Valley to assess their business prospects for the next six months, and in comparison to the past six months, as well as the current and future availability of jobs in their companies. It is managed for the Leavey School of Business by The Survey Company.

The last time the survey respondents expressed significant optimism about current and future economic conditions in Silicon Valley was in May. Complete SCU Business Index results and methodology for January and earlier months, can be found at http://www.surveycompany.com/SCUBI/SVOutlook.html.> About the Santa Clara University Business Index:

The Santa Clara University Business Index survey polls several hundred MBA alumni and several dozen members of its business advisory board, all in managerial and executive positions in Silicon Valley companies.

The survey elicits both a backward-looking as well as a forward-looking indicator, thereby capturing the sentiment of the past six months' trend and its counterpart six months into the future. The reported averages of these indicators offer an aggregate summary of business sentiment in the Valley. The indicators range from 0 to 100, centered on 50. Values below 50 imply negative sentiment, and those above 50 imply positive sentiment. A comparison of the backward swing to the forward one reveals the change in sentiment. The survey is conducted every month and over time is meant to develop an early warning system of upswings and downswings in the Silicon Valley economy.

MEDIA:

Economics Professor Mario Belotti is available for comment TODAY on the SCU Business Index, as well as on the President's economic proposals and today's expected announcement by the Federal Reserve Board.

Contact SCU Media Relations at 408-396-4491 to arrange an interview on Wednesday, Jan.29.

About The Leavey School of Business

The Leavey School of Business at Santa Clara University began in 1926, and was one of the first business schools in the country to receive national accreditation. Its undergraduate business program has been recognized as one of the best in California, and its MBA program has been ranked in the nation's top 20 part-time programs. More than 80 percent of its 1,043 MBA students are working professionals in Silicon Valley. For more information, see http://business.scu.edu.

About Santa Clara University

Santa Clara University, a comprehensive Jesuit, Catholic university located in California's Silicon Valley, offers its 8,054 students rigorous undergraduate curricula in arts and sciences, business, and engineering, plus master's and law degrees. Distinguished nationally by the third-highest graduation rate among all U.S. master's universities, California's oldest higher-education institution demonstrates faith-inspired values of ethics and social justice. More information is on line at www.scu.edu.