KADAC: Business Sentiment Index Shows Signs of Hope 

The Lehigh Valley’s business sentiment index (BSI) is bouncing back after a historic fall.  

The Kamran Afshar Data Analytics Center at DeSales University (KADAC)—in conjunction with the Greater Lehigh Valley Chamber of Commerce—conducted the survey and found that the BSI increased 5.7 percent in July after falling a whopping 31.6 percent in April.   

“All of the indices in our model are still well below where they were in January,” says Afshar, director of KADAC. “The small July recovery could be either the start of a directional change or just a bounce.” 

The survey found that the largest losses and gains in July were among the purchasing indices. The index of plans for future purchases rose sharply—though it’s still 19 percent below its January level. Meanwhile, the index of actual purchases over the last six months continued to drop, falling to half of its January level. 

“Businesses clearly are not buying nor planning to raise their purchases close to where they were before the coronavirus,” Afshar says. 

The employment indices also moved in different directions. While the index of actual hiring over the last six months continued to fall to an all-time low, the index of plans for future hiring recorded a small increase—a sign that businesses have started to plan for future hiring.  

According to Afshar, the speed of the economic recovery has little to do with how fast or slow businesses reopen or whether children can attend school in person. Instead, it all depends on how safe people feel leaving their homes.  

“That kind of feeling does not come from wishful thinking and cannot be manufactured. For it to sustain, it has to be real. Our economic recovery is directly related to the rate at which we can bring this pandemic under control.”