Survey finds ‘remarkable’ optimism in Silicon Valley

The Associated Press
Saturday January 12, 2002

SAN JOSE — More than one-third of Silicon Valley residents say they are in worse financial shape than they were a year ago, but most people still believe their situation will stabilize or improve in 2002, according to a new survey. 

The inaugural consumer confidence survey of the region by San Jose State University also found that Silicon Valley consumers are more optimistic about a nationwide economic recovery than people elsewhere. At the same time, they are less certain about how much such a rebound would be felt here. 

“With corporate layoffs and the demise of many dot-coms, the economic decline in Silicon Valley has been more dramatic than it has been around the country,” said Linda O. Valenty, an assistant professor of political science who directed the survey. 

“Consumers have been knocked down and they’re cautious about spending money right now. And yet they’re relatively optimistic about their prospects for the future.” 

The telephone survey of 1,000 people last month used the same methods as the University of Michigan report often cited by economists as a nationwide benchmark. The researchers put Silicon Valley’s score on the index of consumer expectations at 91.7, compared to the 88.8 registered nationwide by the Michigan study. 

The survey, being released today, found that 35 percent of Silicon Valley respondents said they and their families were worse off financially than at the same time the year before. Only 22 percent said they were doing better. 

However, 83 percent said they expect to be better off or in the same shape a year from now, a figure the researchers called “remarkable.”  

Forty percent predicted “good times financially” for Silicon Valley in 2002, while 38 percent envision “bad times.” 

The state said Friday that unemployment in Santa Clara County, which encompasses most of what is considered Silicon Valley, was 6.1 percent in December. That fell from 6.8 percent in November but was still nearly 5 times higher than the December 2000 figure of 1.3 percent. 

The county generally sees a seasonal decline in unemployment from November to December because of increased retail activity over the holiday season, said Ruth Kavanagh, a labor market analyst for the state Employment Development Department. 


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