Santa Clara University Business Index Survey Finds Silicon Valley Managers Reduce Expectations for Future; Semiconductors and Software Most Bullish for Next Six Months

Business Wire, Nov 29, 2005

SANTA CLARA, Calif. -- Although Silicon Valley managers report being 'mildly' optimistic about business conditions in the next six months, their expectations have been tempered by slow job growth and sluggish investment throughout 2005, said the Santa Clara University School of Business faculty team which released results today from the SCU Business Index November survey. Semiconductor and software sectors were the bright spots in the survey of area business executives, conducted monthly by SCU's business school faculty.

"We've seen managers revise their expectations in a downward fashion over the past year," said Kris Mitchener, assistant professor of economics, and spokesperson for the survey team. "This is consistent with very little job growth in Silicon Valley," said Mitchener. "Overall, job growth has been flat in Silicon Valley, with bright spots confined to a few sectors such as web search and data processing, health services, and education."

When asked if their industries would lead, track, or lag the Valley's overall technology business growth, semiconductor and software business managers expected their sectors would lead, said Mitchener. "Within the technology sector, optimism in the semiconductor industry is being driven by the expected expansion in sales of dual core and multi-core processors as well as the accelerated shift from 32-bit to 64-bit architecture. Managers in legal services and management consulting appear less sanguine about growth relative to the tech sector," he said.

The survey also gauges business optimism by asking senior managers and executives to compare conditions six months prior to the survey, and to project conditions six months from now. This month, the Index registered a slight decline in current conditions and modest optimism for future expectations, with current conditions rated somewhat lower than six months ago (down from 57.92 to 55.17). Future expectations were more modest, with the 'forward' index moving from 55.42 to 56.50. Participants were surveyed the week of November 13.

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 U.S. masters' universities across the country, California's oldest higher-education institution demonstrates faith-inspired values of ethics and social justice. More information is online at www.scu.edu.