The Monterey County Business Optimism Survey
Presented by Pacific Valley Bank
Pacific Valley Bank was created by local business leaders who were looking for a bank that truly understood the local business landscape and could provide solutions to help the local economy thrive. Since our first customer walked through the door in 2004, we have done exactly that.
During October and November of 2024 we conducted a survey of small businesses located in Monterey County. The objective was to get a sense of local business optimism. We received slightly less than 100 responses. While the number is too small a sample to provide statistically valid conclusions, there are a number of themes we think will ring true to readers.
It’s worth noting, the survey went out in the months preceding a consequential election for both national and local politics. While we can’t say for sure, it seems logical to assume some of the sentiment of the times is reflected in the survey responses, particularly in the assessment of local government.
General Observations
Across a range of questions, respondents are neutral to slightly optimistic.
They are most optimistic about:
The prospects for their business
The quality of local banking resources
The quality of local professional services resources (it’s worth noting this was the largest category of respondents!)
They are least optimistic about:
The impact of housing costs on their business
How supportive they find local government
We had 98 responding companies. The top four categories were as follows:
26 professional Services, 10 Real estate Related, 6 Farming/Agriculture, 6 Ag Related
Following are the questions and summaries of the findings:
1. Thinking about the nest 12 months . . . What is your overall view of the economy?
2. Thinking about the nest 12 months . . . What is your overall view of the prospects for business?
3. Thinking about the next 12 months . . . how optimistic are you about finding, hiring, and retaining the people you need?
Comments: The mathematical average and Mode (the most commonly occurring response) are both “3” which equates to “Neutral.” The second highest response is “Cautiously Optimistic,” which we think is encouraging. This will be a recurring theme.
Comments: We’re heartened to see the pervasive trend towards business confidence. The average and modal scores both point solidly to “Cautiously Optimistic,” with over 20 indicating they are “Highly Optimistic.” It will be interesting to see how this trends over the next six months.
Comments: Unlike the previous questions, here we see a nearly perfect normal distribution around “Neutral.” This observation holds up when we look at the top five categories of respondents.
4. How would you rate the following statement: Local Banking Resources are able to support my business.
Comments: The survey occurred before the announcement that a local Salinas bank had been purchased. We are heartened to see the confidence local businesses have in local banking resources and will be interested to see how this sentiment trends in the future.
5. How would you rate the following statement: Our local government is supportive of businesses like mine.
6. How would you rate the following statement: The cost of housing is having a negative impact on your business. (Note scale inverts)
7. How would you rate the following statement: Local Suppliers are able to support my business.
Comments: The responses to this question are noticeably more pessimistic than the other responses. In line with this, many of the written comments reflected a range of frustrations, notably including regulation, taxes, permitting, public safety, and labor laws.
Comments: This is the second question that elicited strong negative reactions: nearly half the respondents agreed or strongly agreed with the statement Respondents noted interest rates, permitting, and the effects of remote work bringing affluent families from out of the market as contributing factors.
Comments: The strong bias towards optimism reflected here is a positive indication of business health. Local trade relationships help recirculate dollars in the local economy, support local businesses, and help support strong community ties.
8. How would you rate the following statement: Local Professional Services are able to support my business.
Comments: Given the strong participation by Professional Services firms in the survey, we would hope the responses to be positive!
9. Where do your customers come from (or) where to you sell your products or services (check all that apply)?
Comments: Respondents were able to select multiple options. Given the skew towards services businesses, it is not surprising to see the concentration in the local economy (local, California, Western US).
An Optimistic Note . . .
Small businesses are the beating heart of our local economy. For example, in Monterey County, some 90% of the 14,000+ businesses employ fewer than 20 people and provide more than 60% of all the jobs.
Pacific Valley Bank was started and built to provide the core banking services those businesses need to thrive.
Against that backdrop, we felt it was time someone took the pulse of local small business owners. Lots has changed over the past few years and we were keen to find out what folks thought.
So, we launched what we intend to be a twice-a-year survey of local business optimism. Our first crop is ready for harvest and nearly 100 owners shared their views on the local economy, housing costs, labor force, and more. We’re grateful to everyone who participated and are already looking forward to making the mid-year 2025 edition bigger and better.
- Anker Fanoe Chief Executive Officer
5th generation Monterey County
Presented by: Pacific Valley Bank December 2024 Business Optimism Survey