Santa Clara University

SANTA CLARA, Calif. – May 2, 2005 – Silicon Valley’s business sentiment is holding steady at a ‘mildly optimistic’ level, in spite of a second month of sentiment decline, said a team of Santa Clara University business school faculty who conduct a monthly survey of business leaders in the Bay Area.

“The overall index is hovering around a nine-month mean,” said Mario Belotti, W. M. Keck Professor of Economics at the Leavey School of Business. Belotti said that “although the survey numbers slid for the second month in a row, the sentiment remains on the positive side of the scale.” Valley optimism was higher a year ago, he observed. “Last spring we had a new bipartisan spirit in Sacramento, the presidential candidates all but nominated, and the end of coalition involvement in governing Iraq,” said Belotti. “This spring, we’ve seen reality set in.”

The index of current economic conditions fell slightly from last month, from 57.00 to 54.92,  remaining in the region above the neutral 50 mark. SCU faculty said this indicates respondents felt business conditions for their companies (and that of their customers) were somewhat better than they were six months ago.

In addition, survey participants also anticipated that business in the next six months will be better than current conditions, with the forward-looking index standing at 58.17, about the same levels reported since August 2004.

Participants were also asked about rising oil prices and the dollar’s weakness, and the impact of these market factors on their businesses next year. The faculty team indicated concern over oil prices as a bigger factor in business planning, with the dollar’s weakness having a neutral or even positive impact, reflecting Silicon Valley’s relatively strong export-oriented position.

Since February 2002, the SCU Business Index (SCUBI) 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 April and earlier months can be found at  http://www.surveycompany.com/SCUBI_05/index.htm

Media : Mario Belotti is available to comment on survey results and on business conditions in Silicon Valley. Call 408-554-5125 or 408-554-2162 to arrange an interview with him.

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 among the top 15 in the nation among part-time graduate programs for working professionals by US News & World Report. 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 second-highest graduation rate among all U.S. master’s universities, California’s oldest higher-education institution demonstrates faith-inspired values of ethics and social justice. More information is online at www.scu.edu.