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In June, when we crunched the numbers provided by a Vistage CEO confidence survey showing declining business confidence in the Valley, commenter edmDusty argued, "Most industries are cyclical. I doubt you can find any significant trends just using two quarters." While unlikely to satisfy edmDusty, we can now report that the trend has continued into the third quarter. In the second quarter, the margin between those Northern California business leaders who saw profitability improving versus decreasing was 32%. This quarter it has declined to 27%. Previously, the margin between those who saw revenues increasing versus decreasing was 54%, it is now 44%.

Additionally, Northern California business leaders, which are a fair barometer for the tech industry, were far less optimistic than the average American business leader:

63 percent of all Northern California firms anticipate an increase in revenues during the third quarter, which is slightly lower than the national reading of 67 percent. Higher profits are expected by 47 percent of CEOs in Q3, slightly lower than the national reading of 55 percent. These projections by CEOs are despite the fact that only 31 percent of all San Francisco firms thought falling home prices and more costly mortgages would have a negative effect on their businesses, nationally, 50 percent of all firms thought the same.

The full study will be released tomorrow.