OC businesses are putting AI to work, according to Cal State Fullerton economists led by Anil Puri.

“A majority of businesses are saying AI is increasing their productivity,” Puri told the Business Journal on July 6.

The economists’ latest quarterly survey said 19% of respondents reported productivity boosts of 20% or more in their firms, while others reported smaller increases.

AI may also be increasing businesses profitability, the results showed.

While AI may be increasing productivity, more than 70% of those surveyed reported that AI had not significantly affected their workforces by causing layoffs.

OC Optimism Keeps Rising

The survey, released July 1, said OC business leaders have grown more optimistic about the future of the economy.

The CSUF Orange County Business Expectations Index, or OCBX, rose to 72% for the just-started quarter, up from nearly 69% in the second quarter. This marks the third consecutive quarterly increase in the index this year. A score above 50% indicates expectations for future economic growth in Orange County.

Before last week’s renewed escalation in the Middle East, inflation had “become the main concern” among respondents, said Puri, the director of the Woods Center for Economic Analysis and Forecasting.

The Woods Center produced the index and survey in partnership with the Orange County Business Council.

Puri said President Donald Trump’s trade tariffs “have stabilized the situation but the after-effect is not completely done. Businesses are still passing on those costs to households.”
U.S. inflation hit 4.2% in May, the highest in three years, as consumers chafed against soaring gasoline and grocery prices.

Government Deficit Concern

Government deficits were the second-largest concern at the start of the current quarter.

Survey results for the third quarter of 2026 show that 17% of Orange County firms plan to increase their workforce, a slight decline from 20% in the previous quarter.

The figures suggest that companies are approaching hiring with greater caution. Fewer firms plan to expand their labor force, while more expect to reduce headcount compared with last quarter.

Orange County’s unemployment rate fell to 3.5% in May from a revised 3.7% in April, while the U.S. rate was 4.1%.

Puri said that 325 people received the survey e-mail and 52 responded, or just over 16%.

The survey was conducted between June 16 to June 26.