August 17, 2016

The following content is from the August edition of the Business Forecast newsletter, sponsored by Silvergate Bank. To get these updates directly to your inbox, sign up here.

County’s business outlook continues to fluctuate, Index up five points this month

The region’s housing shortage continues to be a topic of much discussion and this month the Silvergate Bank-sponsored Business Forecast looks at what county businesses think of the issue. The findings reveal that nearly every businessperson (93 percent) in San Diego County believes housing in the area is expensive, and 44 percent say it’s much too pricey.

(click for larger image)

When asked about the importance of building more housing related to recruitment or employee retention, nearly two thirds (63 percent) of businesses see building additional housing in their community as at least a somewhat important thing to do. Where we find a difference on how important it is to build is between the smallest and the largest firms. Among micro firms with less than two employees, 58 percent believe building housing is unimportant. These firms are presumably less concerned with employee attraction and retention as owners run their operations. Larger companies see housing as more important than micro firms do.

(click for larger image)

Geography within the county also plays a role in housing costs. While no region of the county is immune to high housing prices, businesses in the north inland portion see the problem as less extreme. Only 28 percent of firms there say housing is much too expensive in that area, and 14 percent even believe it’s affordable. In contrast, 55 percent on the opposite side of the county, the south suburbs, believe prices are much too high.

During the past six months, confidence among San Diego County businesses has been continually up-and-down. Those fluctuations in confidence continue this month as the Business Outlook Index (BOI) moved up about five points to 20.9. While this is a slight improvement over last month’s 15.7, the lowest point since the survey began in August 2013, it is still below the historical average of 25 and the 52-week trend has been downward. The BOI ranges from -100 to +100, with zero being neutral, so the overall outlook remains somewhat positive.

(click for larger image)

The year-long decline has mainly been due to businesses located outside the city of San Diego. Companies there are consistently less optimistic while those in the city have remained fairly stable in their outlook. One possible reason for this is that more growth-oriented companies are located in the city.

Two industries helping to keep the local economy on the brighter side are cyber-related firms and those in the development and construction sector. The IT, software, and on-line security professionals who make up the cyber sector have long been immune to pessimism, and lead the way with a strong BOI of 45. The development and construction industry is not far behind at 37 and see better conditions in their industry through the summer. These businesses are also more bullish about hiring with more than half saying they will add employees. Unlike cyber businesses, construction has been a roller-coaster since the Forecast began, but now the industry is settling into a more stable optimistic outlook.

(click for larger image)

This positivity is necessary for the county to maintain a moderately positive outlook. That’s because the city’s minimum wage increase and the state’s impending increase continue to weigh heavily on optimism. Firms seeing the mandated increases as a new challenge report a meager BOI of only 5. This is one more in a series of findings which show increasing the minimum wage saps the confidence of companies that are forced to deal with it. Currently 9 percent say it is the new challenge they deal with. Based on the trends of the previous months, it is likely that until those businesses absorb the increase, close, or leave the county, the overall outlook will suffer.

The effects that minimum wage increases have on business confidence can be seen in the hours companies are able to offer their employees. Among firms that see minimum wage as a problem, 29 percent will cut hours in the coming months and only 18 percent believe they will be adding hours for their workers. That’s nearly the reverse of what companies not affected by the wage increases tell us.

August 8, 2016

The Chamber team is excited to announce the opening of its new, online Small Business Resource Center! The center – which is made possible through the Wells Fargo Works for Small Business^SM program – contains articles, webinars, and videos to assist business owners at each step of the business management process, including for emerging entrepreneurs who wish to start a new venture.

Through the new Resource Center, Chamber members can:

• Read articles covering all aspects of small business management, including: financing, marketing, talent acquisition and more
• Watch webinars from industry experts on small business management skills
• Share industry expertise with the Chamber business community by submitting online content
• Register for upcoming small business workshops

How to Get Started

Visit the Small Business Resource Center at www.sdchamber.org/smallbiz to learn vital information on how to effectively drive business growth. To submit content, members are encouraged to submit a final draft of their content to their Member Relations Managers using the form located on the Small Business Resource website.

July 28, 2016

Chargers Board Chairman, Dean Spanos, Presenting at Chamber Board Meeting

The Chamber Board of Directors voted to support the Chargers’ plan to build a multi-use sports complex and convention facility in downtown San Diego.

Following the Board’s vote, Chamber President & CEO Jerry Sanders – along with Dean Spanos (Chargers Board Chairman), Margie Newman (Chargers Initiative Ad Hoc Committee member and small business owner), and Nick Hardwick (retired Chargers center) – held a press conference to formally announce the Chamber’s decision.

“We take pride in being an action-oriented business organization that works to continually move our region forward.

After a thorough review of the plan we believe the Chargers Initiative is the best step forward in meeting the challenge before us: keeping our NFL team in San Diego and enhancing our convention industry.”

– Jerry Sanders, San Diego Regional Chamber President & CEO

Chamber President & CEO, Jerry Sanders, at Chargers Press Conference

While the Chamber team understands there are some risks to the Initiative, we believe the benefits far outweigh them.

A few key advantages of a downtown stadium:

• The opportunity to host future Super Bowls, continued revitalization of East Village, additional capacity for convention business
• An estimated 7,000 permanent jobs and 15,000 construction and construction-related jobs
• An estimated 1.85 million additional hotel room nights in the first ten years of operation
• An estimated $60 million per year increase in hotel room revenue

Furthermore, by keeping our NFL team, it will continue to increase San Diego’s perception as a “major league” city – this will be an important retention and attraction tool for companies, employees, and recruiters wishing to hire outside talent.

Special appearance by Chargers Coach Mike McCoy

A letter of support from Chamber Board Chair Ernesto Arredondo and Sanders was delivered to Spanos, which outlined several considerations the Chamber requested be addressed by the Chargers. Among them:

• The Tourism Marketing District be made whole at 2 percent
• Scheduling of games to best accommodate large events in the city
• Replacement parking identified for removal of Tailgate Park
• Appropriate community outreach to address infrastructure needs
• Absolute protection of the City of San Diego’s General Fund

Ad Hoc Committee Member & Small Business Owner, Margie Newman

The Chamber team plans to continue its conversations with the Chargers as necessary to address the outlined considerations and help facilitate the community dialogue related to the plan. For the full news release and letter to Dean Spanos, click here.

For more photos of the press conference event, click here.