The Economic Data Global Express (e-EDGE)
v.7 n.30 Released July 28, 2003
Produced by the Los Angeles
County Economic Development Corporation as a public service to the
DURABLE GOODS ORDERS MAKE A LITTLE PROGRESS
New orders for manufactured durable goods increased
by 2.1% in June, after showing no change in May and dropping by 2.4% in
April. All industries except Fabricated Metal Products reported higher
orders last month. Still, the dollar value of durable goods orders
remains in the same narrow band it's inhabited for the past 17 months.
Year-to-date orders have risen by only 0.7% compared to the first six months
This report is a good source of information
on demand for several types of business equipment of importance to California.
Manufacturers of several different types of equipment saw higher orders
in June over the month: computers and related products (+0.8%), machinery
(+4.4), and nondefense aircraft (up by a whopping 20.0%). However,
orders for communications equipment dropped by 9.6%. Year to date,
computer orders were up by 10.5%, communications equipment orders rose
by 8.2%, and machinery edged up by 1.5%. However, commercial aircraft
orders fell by 6.2%, and Boeing has just marked down its delivery forecast
for 2004. (Nancy D. Sidhu)
CALIFORNIA'S BUDGET: SOME (SMALL) SIGNS OF PROGRESS
No, this is not an article about the budget deal
arranged last week and passed by the State Senate last night. Instead,
there is some interesting information you should know about in the latest
monthly Finance Bulletin, which is published by the state's Department
of Finance. This issue of the Bulletin contained preliminary General
Fund revenue figures for the month of June and fiscal year 2003 (which
ended June 30th). The good news is that sales tax revenues increased
by 4.3% last year compared to fiscal year 2002. Even better, corporate
tax revenues soared by 28.6% over the year, a sign that profits of California
corporations have improved substantially. Personal income tax receipts
remained a laggard, however, falling by 2.4% in FY2003. Nonetheless,
income tax revenues over the past five months (February through June 2003)
were higher than the same period in 2002, despite a shortfall in April
(the biggest month for income tax revenues).
Conclusion: the worst is probably over
on the revenue side of the budget. Nonetheless, the General Fund
is still in a deep hole. According to past issues of the Bulletin,
total General Fund revenues peaked in fiscal year 2001 at $78.4 billion.
Fiscal year 2003 receipts were $68.4 billion. Revenues from both
the sales tax and corporate taxes are back to the FY2001 levels.
We need improvement in employment and income tax receipts to get back to
ground level. (Nancy D. Sidhu)
DoF Finance Bulletin: http://www.dof.ca.gov/HTML/FINBULL/July03.HTM
RESALE HOUSING STILL STRONG IN JUNE
The state's resale housing market turned in another
strong performance in June according to data from the California Association
of Realtors. As usual, the median price increased over the year,
by a healthy 15.9% to $376,260. Moreover, unit sales were up over
the year, after a string of declines. The CAR's Unsold Inventory
Index (the number of months needed to deplete the supply of homes on the
market at current sales rates) continued to run at a low level, only 2.3
months. All reports from the field complain about the lack of inventory.
In Los Angeles County, the median price in
June was up by 20.8% over the year to $339,100, while unit sales also increased
by 2.3%. In Orange County, the median price increased by 12.0% to
$479,410, but unit sales eased by 0.7%. The Riverside-San Bernardino
area's median resale home price jumped up by 24.6% in June to $222,340,
while unit sales moved ahead by 3.9%. In San Diego County, the median
price moved ahead by 13.7% to $419,320, while unit sales were up over the
year by 4.8%. Ventura County's median price was up by a stout 25.9%
to $455,420, but unit sales continued to run below year-ago levels, down
In the "San Francisco Bay" area, the June
median price was up a restrained 3.9% to $572,870, while unit sales moved
ahead by 4.6%, after a string of year-to-year losses. In San Jose,
the median price was down by 1.7% over the year (the third such decline
in a row), while units sales increased by a fairly healthy 11.3%, after
declining for four months.
People in the residential real estate market
are keeping a wary eye on mortgage interest rates, and are hoping that
the Federal Reserve can continue to work its magic. In this regard,
the CAR's next report -- for July -- should prove interesting. (Jack
(should be posted shortly)
JUNE AIRLINE PASSENGER TRAFFIC -- MIXED
The June passenger traffic reports were a mixed
bag. At Los Angeles International Airport (LAX), total traffic declined
by 4.2% over the year, with the international component down by 7.0%.
The news from Ontario International was better, with a 1.7% increase.
The June numbers from John Wayne/Orange County made for even better reading,
up by 4.1% over the year. The Palm Springs Airport kept the ball
(or bag) rolling with a 13.1% gain.
We don't have June data yet from the Burbank-Glendale-Pasadena
Airport, but they have been recording year-to-year gains so far this year,
with May up by 3.1%. And we are waiting for the Long Beach numbers.
The June air cargo numbers were also mixed.
LAX was down by 2.8% over the year, while Ontario recorded an 18.0% gain.
The international air freight numbers from LAX were uniformly down, with
total tonnage off by 5.9%, imports down by 5.1% and exports off by 6.9%.
LAX data: http://www.lawa.org/statistics/tcom-0603.pdf
ONT data: http://www.lawa.org/ont/statistics/tcom-0603.pdf
COMMENTARY: MTA GOLD LINE IS A GREAT ALTERNATIVE TO DRIVING
Today is the first weekday for the new MTA Gold
Line that runs between Pasadena and the Union Station. I had the
pleasure of riding it from the terminal station (Sierra Madre Villa) in
East Pasadena to work this morning. And it was pleasure indeed.
This is one MetroRail that actually has scenery to enjoy, including a spectacular
trestle over the 110 Pasadena Freeway.
I drove from my house to the station, which
has a 1,000-unit parking garage. (Six of the 13 stations have parking,
but space is very limited for some of them.) At the Sierra Madre
Villa station, passengers filled up about half of the seats on the train.
There were fewer passengers getting on at the other stops, however.
By the time the train reached the Union Station, most of the seats were
filled but no one had to stand. The train is fairly quiet and smooth
enough for reading. The whole trip took about 45 minutes (7:25-8:10,
including transferring to the Red Line subway to the Pershing Square Station/Financial
District). Even though this was is much faster than riding an MTA
bus, it was much more enjoyable. The whole one-way trip cost $1.60
(including the transfer necessary for the Red Line subway), but I paid
just $1.15 by using a MTA token (plus $0.25 for the transfer). (A
monthly pass costs $42/month. Parking downtown, in contrast, can
easily cost you twice as much.)
How can the Gold Line attract more passengers
instead of just becoming a bus substitute? Four key factors may determine
its success in attracting current drivers: parking, cleanliness, speed,
and space. Some stations do not have accompanying parking spaces,
and that "first mile" problem may be enough to deter some drivers from
giving up their cars. Although MTA has many new feeder bus lines
to bring residents to the nearest train station, they simply take too much
time and are not attractive enough for most people. (Many Angelenos
earnestly believe that God created our legs in order to step on gas pedals
and brakes instead of walking one mile to train stations or standing for
35 minutes on crowded trains.) Also, if the two terminal stations
(Sierra Madre Villa and Union Station) get enough ridership traveling between
just these two stops, MTA should consider having "limited" service trains
that do not stop at less demanded stops during rush hours. That could
easily cut the travel time by one-third or more and increase the trains'
attractiveness to business travelers.
The Gold Line may lead to a revitalization
of some neighborhoods along its route, such as Chinatown. Weekend
runs for dim sum just got a lot easier. Property owners in such neighborhoods
should create a collaborative masterplan to develop more visitor attractions
and bring in additional businesses for local merchants. To encourage
local tourist use of MetroRail, MTA may wish to provide one-day passes
in addition to the weekly passes, which costs $11.
In all, I would give the Gold Line a "B+,"
but with the footnote that the coveted "A" is easily within reach.
Gold Line info: http://www.mta.net/metro_transit/metro_rail/goldline/index.htm
LAST CALL!!! TRYING TO REACH SMALL AND MID-SIZED BUSINESSES?
LAEDC may have the right channel for you.
LAEDC's Business Resource Guide (BRG) is full of free resources
that serve small and mid-sized businesses and is seen as an indispensable
reference book for these businesses. An advertisement in the BRG
can reach these businesses at a fraction of the cost of radio and billboard
ads. Our 2003 edition is nearing completion and a few ad spots are
still available. Please call Beverly Dill at 213-236-4820 or e-mail
to firstname.lastname@example.org for more information.
VARIOUS EVENT CALENDARS (Repeat announcement)
To prevent the e-EDGE from listing too many events,
we encourage you to visit our events pages:
LAEDC events: http://www.laedc.org/data/events/index.shtml
World Trade Center Association events: http://www.wtcanet.org/index_event.htm
LAEDC's economic development-related events: http://www.laedc.org/events/calendarevent.asp
TRADE SHOWS LISTINGS (Repeat announcement)
LAEDC is now compiling a comprehensive listing
of trade shows in Southern California. Please send us such information.
Thank you so much.
Our current listing includes fashion/apparel,
textiles, shoes, home furnishings & giftware, and manufacturing.
It's available at http://www.laedc.org/trade_shows.html
* Cal. Assn. of Realtors: California existing single-family detached home
sale for 6/03: +0.0% to 572,130 annual units (5/03: -1.9% to 572,270 a.u.)
* Cal. Assn. of Realtors: California existing condo sale for 6/03:
-2.9% (5/03: +4.9%)
* Cal. Assn. of Realtors: California median single-family detached
home sale price for 6/03: +1.8% to $376,260 (5/03: +1.5% to $369,290)
* Cal. Assn. of Realtors: California median condo sale price for 6/03:
+1.7% to $282,000 (5/03: +2.1% to $273,330)
* Cal. Assn. of Realtors: LA County existing home sale for 6/03: -9.7%
* Cal. Assn. of Realtors: LA County median home sale price for 6/03:
+2.1% to $339,100 (5/03: +3.6% to $332,210)
* Census: US new durable goods orders for 6/03: +2.1% (5/03: +0.0%)
* Census: US durable goods shipments for 6/03: +1.3% (5/03: +0.1%)
* Census: US durable goods inventories for 6/03: -0.6% (5/03: -0.3%)
* Census: US unfilled durable goods orders for 6/03: +0.1% (5/03: -0.2%)
* Census: US new home sales for 6/03: +4.7% to 1.160 million annual
units (5/03: +10.9% to 1.108mil.a.u.)
* Natl. Assn. of Realtors: US existing home sales for 6/03: -0.3% to
5.83 million annual units (5/03: +0.9% to 5.85mil.a.u.)
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