San José State University
                                                                            One Washington Squar...
MIXED ECONOMIC OUTLOOK

When asked about their current financial situation compared to one year ago, 52% of
Silicon Valley...
SERIOUS RECESSION EXPECTED TO LAST MORE THAN A YEAR

SPRI also asked respondents if they believed California is in an econ...
Silicon Valley Business Conditions


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SPRI FALL 2009 SILICON VALLEY PULSE
CONSUMER CONFIDENCE SURVEY QUESTIONS                    SILICON VALLEY/CALIFORNIA ECON...
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Sv Pulse Consumer Confidence Fall 2009

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Silicon Valley Consumer Confidence

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Sv Pulse Consumer Confidence Fall 2009

  1. 1. San José State University One Washington Square San José, CA 95192-0119 408.924.5293 www.sjsu.edu/spri Dr. Melinda Jackson, Research Director Melinda.Jackson@sjsu.edu PLEASE CONTACT FOR FURTHER COMMENT: Office 408.924.5293 Cell 408.876.8792 RELEASE DATE AND TIME: NOVEMBER 10, 2009 6:00AM SILICON VALLEY CONSUMER CONFIDENCE REMAINS LOW CURRENT PERCEPTIONS UP, FUTURE EXPECTATIONS DOWN SAN JOSE, NOVEMBER 10 – Silicon Valley consumer confidence remains low, with perceptions of current conditions up while future expectations are down, a new survey by the Survey and Policy Research Institute at San Jose State University shows. The Index of Consumer Sentiment, which combines assessments of current conditions and future expectations for personal finances and business conditions in the country as a whole, stands at 76.2 among Silicon Valley residents, unchanged from April of this year. Index numbers below 100 indicate that negative perceptions outweigh positive. The overall flat line actually reflects two opposing trends. Perceptions of current economic conditions (CEC Index) rose to 68.6 in October, an increase of 3.8 percentage points from April. At the same time, expectations for the future, as measured by the Index of Consumer Expectations (ICE) dropped slightly, falling more than two points to 81.0 in October, from 83.4 in April. Silicon Valley Consumer Confidence Indices 110 100 Index value 90 80 70 60 Se 2 Se 03 Se 4 Se 5 Se 6 O 7 M 3 M 4 M 5 M 6 M 7 01 Ju 2 Ja 2 03 Ja 3 04 04 05 05 06 06 07 07 9 09 0 0 0 0 0 0 0 0 0 0 0 0 0 r0 n n n n n n n n n n n p p p p p ec ar ar ar ar ar ar ct ct Ap Ju Ju Ju Ju Ju Ja Ja Ja O M D SV ICS SV CEC SV ICE NOTE: The Index of Consumer Sentiment (ICS) combines consumer perceptions about Current Economic Conditions (CEC) and the Index of Consumer Expectations (ICE). Index numbers = % positive responses - % negative responses + 100. 1
  2. 2. MIXED ECONOMIC OUTLOOK When asked about their current financial situation compared to one year ago, 52% of Silicon Valley residents said they were worse off today, and just 19% said they were better off, while 28% volunteered that they were doing about the same. Looking ahead, 33% of respondents said they expected to be better off a year from now, while 49% said they expected their finances to be about the same, and 10% thought they would be worse off. With regard to business conditions in the country as a whole, 33% of Silicon Valley residents said they expected bad times ahead in the next 12 months, while an equal number said they expected good times. Long-term expectations were slightly more optimistic, with 37% saying they thought the country would see good economic times during the next five years, and 33% saying they expected to see widespread unemployment and depression. Current buying conditions were judged to be good by 42% of those in the Valley, while 32% thought it was a bad time to buy major household items. Comparing the current ratings to SPRI’s last survey in April, expectations of personal finances one year from now, and the long-term business outlook both dropped, while ratings of current buying conditions, short-term business conditions, and personal finances versus one year ago improved. “People are expressing mixed feelings about the economy right now” said Survey and Policy Research Institute Research Director Dr. Melinda Jackson, “While they may feel that the worst is behind us, they’re still not expecting to see good times again for a while.” Silicon Valley Consumer Confidence Index Variables 160 150 140 130 Index Value 120 110 100 90 80 70 60 50 40 Ju 4 Ju 5 Ju 6 Ju 7 O 9 M 04 Se 04 Ja 4 M 05 Se 05 Ja 5 M 06 Se 06 Ja 6 M 07 O 7 07 09 0 0 0 0 r0 0 0 0 0 ar ar ar ar n n p n n p n n p n n ct ct Ap Ja Personal Finances vs. 1 year ago Personal Finances 1 year from now Business Conditions - Next 12 months Five year outlook Buying Conditions - Durables Index numbers = % positive responses - % negative responses + 100. 2
  3. 3. SERIOUS RECESSION EXPECTED TO LAST MORE THAN A YEAR SPRI also asked respondents if they believed California is in an economic recession – 92% said yes. Overall, 58% of Silicon Valley residents said they think California is in a serious recession, 27% said it is a moderate recession, and 8% considered it a mild recession. When asked how long they think the economic recession will last, just 8% of Silicon Valley residents said less than one year, 47% said 1-2 years, 34% said 3-5 years, and 7% said more than five years. FEARS OF UNEMPLOYMENT LESSEN Forty percent of Silicon Valley residents said that they are concerned that they or someone in their family will lose their job in the next year. Another 10% reported that they have already lost their job. Forty-six percent of those surveyed said that they were not concerned about someone in their household losing a job. This represents an easing of unemployment fears compared to six months ago when 49% of Silicon Valley residents expressed concern about job loss, and only 37% were unconcerned. SILICON VALLEY CONSUMER CONFIDENCE HIGHER THAN US Despite the gloomy picture in the region, Silicon Valley consumer confidence remains higher than in the country as a whole. The national Index of Consumer Sentiment stood at 70.6 in October, as measured by the University of Michigan’s Survey of Consumers. The same Index of Consumer Sentiment stood at 76.2 among Valley residents, 5.6 points higher than the national index. Index Consumer Sentiment Current Economic Conditions Consumer Expectations (ICS) (CEC) (ICE) 2009 April 09 Oct 09 April 09 Oct 09 April 09 Oct 09 Silicon Valley 76.2 76.2 64.8 68.6 83.4 81.0 CA 73.8 -- 66.3 -- 78.6 -- US 57.3 70.6 63.3 73.7 53.5 68.6 BUSINESS CONDITIONS IN SILICON VALLEY Silicon Valley residents were also asked about business conditions in Silicon Valley specifically. Current business conditions in Silicon Valley were seen as worse compared to a year ago by 59% of residents, while 28% thought they were better compared to last fall. Looking ahead, 38% of Silicon Valley residents expected the region’s economy to improve over the next 12 months, while 30% thought the bad economic times would continue, and 25% thought it would be mixed. Looking ahead to one year from now, expectations are higher, with 49% of Silicon Valley residents saying they expect business conditions in the Valley to be better than now, 40% expecting them to be about the same, and just 8% saying they thought they would be worse. All three of these judgments represent an improvement over six months ago. 3
  4. 4. Silicon Valley Business Conditions 150 100 50 0 Ju 0 3 Ju 02 Ju 04 Ju 05 Ju 06 Ju 07 M 02 S e 02 S e 03 M 04 S e 04 M 05 S e 05 M 06 S e 06 M 07 O 07 07 O 09 09 D 02 M 02 Ja 0 3 Ja 0 4 Ja 0 5 Ja 0 6 ar ar ar ar ar ct ct r n n ec n n n n n n n n n p p p p p ar Ap Ja SV-Economic conditions next 12 months SV-Business conditions vs. 1 year ago SV-Business conditions 1 year from now ABOUT THE SURVEY The Survey and Policy Research Institute at San José State University conducted the Fall 2009 Silicon Valley Pulse Survey September 29 – October 7, 2009. This telephone survey of 765 Silicon Valley adults was conducted in English and Spanish, and included questions on several different topics including consumer attitudes, charitable giving, and state and local political issues. Some telephone numbers included in this sample were randomly generated by computer to ensure that both listed and unlisted numbers were included, from all landline exchanges in Silicon Valley; others were randomly selected from the list of registered voters in Santa Clara County. Telephone numbers in the survey sample were called up to four times at different times and days to increase the likelihood of reaching eligible households. The sampling error for the total sample is plus or minus 3.54 percentage points at the 95% confidence level. Results were statistically weighted by race and gender to match recent U.S. Census estimates of the Silicon Valley population. Silicon Valley is defined as all of Santa Clara and San Mateo Counties, plus Fremont, Newark, and Union City in Alameda County, and Scotts Valley in Santa Cruz County. This follows the geographic definition of Silicon Valley used by Joint Venture Silicon Valley in their annual Silicon Valley Index. Contact: Dr. Melinda Jackson, SPRI Research Director 408.924.5293 Melinda.Jackson@sjsu.edu 4
  5. 5. SPRI FALL 2009 SILICON VALLEY PULSE CONSUMER CONFIDENCE SURVEY QUESTIONS SILICON VALLEY/CALIFORNIA ECONOMY QUESTIONS: CURRENT ECONOMIC CONDITIONS INDEX (CEC): 6. Thinking now about Silicon Valley specifically, do you think that during the next 12 months we'll 1. We are interested in how people are getting have good times financially, or bad times, or along financially these days. Would you say that what? you (and your family living there) are better off April 09 Oct 09 or worse off financially than you were a year Good 26% 38% ago? Good and bad (vol.) 22 25 April 09 Oct 09 Bad 43 30 Better off 17% 19% Don't know 9 6 Same (volunteered) 25 28 Worse off 55 52 7. Would you say that at the present time, Don't know 2 1 business conditions in Silicon Valley are better or worse than they were a year ago? 2. About the big things people buy for their April 09 Oct 09 homes - such as furniture, a refrigerator, stove, Better Now 8% 28% television, and things like that. Generally Same (vol.) 6 9 speaking do you think now is a good or bad time Worse Now 78 59 for people to buy major household items? Don't know 6 4 April 09 Oct 09 Good 39% 42% 8. How about a year from now? Do you expect Good and Bad (vol.) 15 17 that business conditions in Silicon Valley will be Bad 36 32 better or worse than they are at present, or just Don't know 10 8 about the same? April 09 Oct 09 INDEX OF CONSUMER EXPECTATIONS (ICE) QUESTIONS: Better than now 43% 49% Same 32 40 3. Now looking ahead - do you think that a year Worse than now 14 8 from now you (and your family living there) will Don't know 4 2 be better off financially, or worse off, or just about the same as now? 9. Would you say that California is in an April 09 Oct 09 economic recession, or not? [If yes: Do you Better off 43% 33% think it is in a serious, a moderate, or a mild Same as now 39 49 recession?] Worse off 11 10 April 09 Oct 09 Don't know 7 8 Yes, serious recession 55% 58% Yes, moderate recession 30 27 4. Now turning to business conditions in the Yes, mild recession 6 8 country as a whole - do you think that during the No 8 5 next 12 months we'll have good times financially, Don’t know 1 3 or bad times, or what? April 09 Oct 09 10. How long do you think the economic Good Times 34% 33% recession will last? [if yes to Q9] Good and Bad (vol.) 19 28 April 09 Oct 09 Bad Times 41 33 Less than one year 14% 8% Don't know 6 6 1-2 years 45 47 3-5 years 29 34 5. Looking ahead, which would you say is more More than 5 years 9 7 likely: that in the country as a whole we'll have Don’t know 4 5 continuous good times during the next five years or so, or that we will have periods of widespread 11. Are you concerned that you or someone in unemployment or depression, or what? your family will lose their job in the next year, or April09 Oct09 not? [If yes: Are you very concerned or Continuous good times 47% 37% somewhat concerned about this?] Stay about the same (vol.) 11 20 April 09 Oct09 Widespread unemployment Yes, very concerned 28% 19% or depression 37 33 Yes, somewhat concerned 21 21 Don't know 6 9 No 37 46 Have lost job already (vol.) 11 10 Don’t know 1 3 5

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