SCU Survey Finds More Than Half Silicon Valley Firms Still Outsourcing; Little Change in Area Job Growth Numbers Predicted

Business Wire, August 25, 2005

SANTA CLARA, Calif. -- Silicon Valley job growth was essentially flat for the last 12 months, and area industries don't anticipate a strong upturn in hiring in the next six months, according to the Santa Clara University Business Index (SCUBI). A team of Santa Clara University business faculty conducts the monthly survey of business leaders in the Bay Area.

"In spite of continued improvement in the national economic figures, there has been little change in outlook for area employment. Earnings and productivity numbers have rebounded over the last couple of years for local firms, but this has yet to translate into sustained increases in regional employment," said Kris Mitchener, assistant professor of economics at SCU's Leavey School of Business.

"According to our respondents, more than half the region's firms have outsourced at least 'some' of their IT and support services, and 4 in 10 firms have outsourced manufacturing jobs," he said. "The decision of many firms to outsource both domestically and overseas continues to factor into the local jobs picture and slow the growth in employment since the recovery began. Sustained increases in household incomes may be the additional fuel that the job engine needs to get the regional employment train rolling again."

August marked the third consecutive summer that the survey team had asked the outsourcing question, and Mitchener noted one bright spot in the numbers. "The percentage of firms reporting 'no outsourcing done in the last quarter' has increased in the manufacturing, from 51.1 percent in 2003 to 60.7 percent in this year's survey," he said.

Since February 2002, the SCU Business Index has asked managers and executives in a wide range of businesses in Silicon Valley to assess their business prospects for the next six months, and compared to the past six months, as well as current and future availability of jobs in their companies. It is managed for the Leavey School of Business by The Survey Company. Complete SCU Business Index results and methodology for August and earlier months can be found at http://www.surveycompany.com/SCUBI_05/index.htm.> Media: Kris Mitchener is available to comment on survey results and on business conditions in Silicon Valley. Call 408-554-5125 or 408-554-2162.

About the Santa Clara University Business Index survey

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.

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 is recognized as one of the best in California, and its MBA program is ranked 10th in the nation among part-time graduate programs for working professionals. More than 80 percent of its 1,100 MBA student body are working professionals in the Bay Area.

About Santa Clara University

Santa Clara University, a comprehensive Jesuit, Catholic university located in California's Silicon Valley, offers its 8,213 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. masters' universities, California's oldest higher-education institution demonstrates faith-inspired values of ethics and social justice. More information is available at www.scu.edu.