The outlook for San Diego businesses was largely unchanged in April, according to a largely positive forecast from the San Diego Regional Chamber of Commerce, though nearly half of manufacturers polled predicted that impending water usage restrictions would cause them to lose revenue or cut jobs.
The chamber’s survey asked businesses about water usage after Gov. Jerry Brown ordered mandatory 25 percent urban water use reductions, but before the State Resources Water Control Board assigned city-specific targets ranging from 16 percent cuts for San Diego to 36 percent for Valley Center.
More than 80 percent of San Diego County businesses said they didn’t anticipate any revenue or job losses even if water usage was cut up to 35 percent, but only 55 percent of manufacturers felt the same way with that sector expecting to suffer the most during the drought. Eighteen percent anticipated only lost revenues while 27 percent predicted declines in both revenue and jobs. The chamber cautioned that because manufacturing often has dire outlooks, sustained water cuts could be “catastrophic.”
“San Diego’s manufacturing sector plays an important role in the region’s economy and supports tens of thousands of good paying jobs so it is concerning to see potential losses in this sector,” said Dino D’Auria, chief banking officer at Silvergate Bank, which sponsored the monthly forecast. “As we work with clients in this sector we will use this information to help prepare for any potential downturns.”
Other industries’ predictions did not significantly differ from the overall business community’s forecasts, according to Competitive Edge Research and Communication President John Nienstedt, who carried out the survey.
Businesses in all sectors that predicted water restrictions would hurt their bottom line were far more likely to have cutback already, the survey said. Seventy-one percent of those businesses took at least some steps to conserve water.
The overall Business Outlook Index for the county dipped slightly from last month to 26.6, though the figure still represented a positive forecast. More businesses anticipated economic conditions would definitely improve compared with last year, rising from 12 to 17 percent. Firms in the city of San Diego were significantly more optimistic than businesses in the rest of the county.
The Chamber polled about 200 businesses, with roughly 10 in the manufacturing sector.