Orange County business leaders are anticipating increased wage payments for the current quarter, a new survey from economists at Cal State Fullerton indicates. This comes as executives express a more upbeat outlook on the local economy, though inflation remains their primary concern.
The quarterly business expectations for the final three months of the year were released last week by the economists, led by Woods Center director Anil Puri. The findings largely reflect those from the preceding quarter, where executives had already reported growing optimism about the economic future.
However, the latest survey notes significant changes in labor cost expectations. The survey stated that “Labor-cost expectations for the fourth quarter of 2026 increased from the previous quarter.” Nearly 56% of executives now expect wages to rise during the final three months of the year, a substantial increase from approximately 42% in the last quarter. About 40% of respondents foresee wages remaining unchanged.
Orange County’s unemployment rate stood at 4.4% in August, an increase from 4.2% in July.
The researchers’ Orange County Business Expectations Index (OCBX) climbed to 70.2% for the quarter that began October 1st, up from 62.9% in the previous period. A score exceeding 50 signals an expectation for future economic growth within Orange County.
Despite the growing optimism, inflation continues to be the leading concern for businesses in Orange County. This is followed by the high cost of fuel. U.S. inflation was observed at a 3.4% annual rate in August, surpassing the Federal Reserve’s target of 2%. The war against Iran and subsequent crude oil delivery challenges have pushed the nationwide average price of gasoline to $4.43 per gallon as of September 30. Prices are considerably higher for Orange County residents, with an average of approximately $6.405 per gallon, according to AAA.
Interest rates and tariffs were tied for third place among concerns, followed by government deficits, the ongoing Iran war, and a potential decline in the stock market. Researchers commented that “These issues are contributing to uncertainty” and are likely to continue influencing business decisions. They added that for the last quarter of 2026, Orange County business leaders demonstrated greater optimism regarding activity within their own industries and across the broader regional economy.
Slightly more than one-third of executives now expect regional industry activity to increase, a rise from 25% in the previous quarter.
The CSUF researchers conducted their survey from September 16 to 25, receiving an effective response rate of 18% from approximately 300 individuals contacted via email. The survey was conducted in partnership with the Orange County Business Council.
