San Diego Appraiser Blog

2015 Is Looking Bright For The San Diego Economy
February 9th, 2015 1:02 PM

2015 Is Looking Bright For The San Diego Economy

The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose a strong 1.3 percent in November and followed it with a solid 0.8 percent gain in December.  

Both months featured big positive moves in initial claims for unemployment insurance and help wanted advertising and gains in all the other components except for building permits.  November benefited from a sharp increase in local stocks prices and a smaller drop in building permits.  

With the gains in November and December, the USD Index has increased for seven consecutive months, and November’s gain was the largest monthly gain since February 2011.  San Diego’s economy did well in 2014, with jobs increasing by about 34,000 (before revisions).  

With the strong uptrend in the indicators and with most of them positive, the forecast is for continued growth in the local economy at least through the end of 2015.  The forecast for the year ahead is for job growth in the 35,000 to 40,000 range, which will drive the seasonally adjusted unemployment rate below 5 percent.  Sectors expected to do well are professional, scientific, and technical services, health care, and leisure and hospitality.   

Highlights:  A bad year for residential units authorized by building permits ended with a string of nine straight monthly declines and drops in 11 of the 12 months of 2014.  For the year as a whole, residential units authorized fell by 17 percent.  Whereas multi-family units led the gains in this component in recent years, they were responsible for much of 2014 losses.  Multi-family units authorized were down almost 23 percent for the year, while single-family units were down less than 4 percent. . . Both initial claims for unemployment insurance and help wanted advertising were extremely strong in November and December.  

This strength on both sides of the labor market resulted in the seasonally adjusted local unemployment rate falling to 5.6 percent in December, which was down from 5.9 percent in November and from 6.9 percent in December 2013.  It was the county’s lowest seasonally adjusted unemployment rate in six and a half years (since June 2008).  

Although the gain was not large, consumer confidence increased for the 11th consecutive month in December.  Good news in the labor market and falling gas prices likely contributed to the improved outlook by consumers. . . 2014 was a good year for local stock prices, which gained 9.20 percent.  By comparison, the Dow Jones Industrial Average, the Standard and Poor’s 500 Index, and the NASDAQ Composite Index were up 7.52 percent, 11.39 percent, and 13.42 percent respectively. . . The national Index of Leading Economic Indicators was up in 11 of the 12 months of 2014 and was unchanged in the other month.  After a weather-influenced decline in the first quarter, GDP growth has been strong, with the third estimate for the third quarter coming in at a robust 5.0 percent, which follows strong growth of 4.6 percent for the second quarter.  

December’s increase puts the USD Index of Leading Economic Indicators for San Diego County at 132.4, up from November’s reading of 131.4.  Revisions in the national Index of Leading Economic Indicators reduced the previously reported Index levels for July and August and the previously reported change for October from +0.6 percent to +0.5 percent.  For revisions to the previously reported values for the Index and for the individual components, please visit the Website address given above.  

Posted by Jennifer L. Chandos on February 9th, 2015 1:02 PMPost a Comment

Subscribe to this blog