Silicon Valley Consumer Confidence

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. 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. 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. 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. 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