| Santa Clara University Business Index:
Silicon Valley Outlook Cumulative Table of Results
(February-October) Results for October (Index to detailed charts) About Leavey School of Business The Santa Clara University Business Index: Silicon Valley Outlook survey polls alumni of the MBA program on the third Tuesday of each month with a view to forecasting sentiment about the Valley's economic trends. Our sample accesses a highly qualified group of individuals who populate the employment base of Silicon Valley. The brief survey elicits both a backward-looking as well as a forward-looking swing indicator, thereby capturing sentiment of the past six months' trend and its counterpart six months into the future. The reported averages of these indicators offer an aggregate summary of business sentiment in the valley. The swing indicators range from 0 to 100, centered on 50. Values below 50 imply negative outlook, and those above 50 imply positive outlook. A comparison of the backward swing to the forward one reveals the change in sentiment. The survey is conducted every month and over time results may serve as an early warning system of upswings and downswings in the Silicon Valley economy. Interpretation of Results for October (Updated 10/28/2002)This month's backward-looking indicator
is 45.60 (compared to 42.16 for September). As illustrated in the Trend chart, the index of future business prospects has leveled out after a sustained downslide since March 2002. This forward index declined 25% from March to September. However, the October index is essentially unchanged since September, and in fact shows a small uptick of 3%. Of particular interest is the fact that Silicon Valley companies’ assessment of the health of their customers’ business conditions had reached its lowest value of the year last month. It had dropped by 19% since March. Since much of Silicon Valley’s sales reflect infrastructure expenditures by their customers, this decline in customer prospects implies continued reductions in purchases from Silicon Valley suppliers. The momentum may be shifting, however, because the view of Silicon Valley companies about the future prospects of their customers has remained essentially unchanged from September to October. The assessment of job prospects follows a similar pattern. Sample Information On October 22, 2002, 1357 invitations were distributed to Advisory Board members and alumni in Silicon Valley. 103 were undeliverable, 16 were "out of office," and 5 requested removal for a total of 1233 valid invitations. No reminder was sent. A total of 136 responses were received by the closing date of October 26, for an overall response rate of 11%. Charts showing respondent characteristics are included in the monthly report along with item-by-item trends and a graph of the Swing Indicators for February through October. Monthly Results and Respondent Demographics: Please direct questions and comments to svi@scu.edu.
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