The growing optimism in the county’s business outlook at the beginning of 2016 has waned, with the San Diego Regional Chamber of Commerce‘s economic index taking a a “significant” drop in February.
The chamber reported that its Business Outlook Index fell from 25.0 to 19.4, bringing it well below both its historical average of 25.3 and its 52-week average of 23.5.
“The labor market continues to be a challenge for business: while larger firms expect to add employees they are challenged by a lack of talent in the labor market. In contrast, smaller firms, which are more affected by the looming minimum wage hikes are less than optimistic about increasing their workforce,” said Dino D’Auria, executive vice president and chief banking officer at Silvergate Bank, sponsor of the monthly index.
By industry, healthcare and medical companies took a hit over the last couple of months. The index for that sector dropped from 35 to 14.
Geographically, businesses outside the city of San Diego experienced a 10-point drop over the last two months while businesses within city limits held the optimism they started 2016 with.
Only 26 percent of firms foresee adding employees over the next three months and only 24 percent believe they will offer more hours to the workers they have.