Retail and food services sales jumped up by 1.4% in July following a revised decline of 0.4% in June and a weakish +0.2% in May. Sales by motor vehicle and parts dealers soared by 3.1% last month. Also on the upside were gasoline stations--whose sales rose by 2.5% due to higher prices--nonstore retailers (i.e., catalog and internet, +2.1%), building material & garden equipment & supplies dealers (+1.9%), and electronics & appliance stores--up by 1.8%. Three sectors registered lower sales over the month: miscellaneous retailers, down by 0.7%, department stores (-0.4%), and sporting goods, hobby, book & music stores (-0.2%).
For a longer perspective, total retail and food services sales increased by 4.8% compared to July 2005, but were up by 9.2% excluding automotive. Again, gasoline stations were the leaders, with sales up by 19.2%, mostly due to higher prices. Other leading sectors over the year were nonstore retailers (+15.6%) and building material & garden equipment & supplies dealers (+10.9%). Two retail sectors recorded lower sales in July over the year: automotive vehicle dealers (-9.4% compared to "employee pricing" promotions last year) and department stores (-1.1%). (Nancy D. Sidhu)
And it was more than "good" in Los Angeles County, according to data from PKF Consulting. The occupancy rate for the month was 81.1% compared with 78.9% last year. Better yet, the average daily room rate (ADR) rose by 11.6% to $142.85. Nine areas in the County had June occupancy rates of over 80%, including: Santa Clarita (91.0%); LAX (86.0%); West Hollywood (85.6%); Pasadena (84.4%); San Fernando Valley (83.9%); Hollywood (83.5%); I-5 Corridor/Whittier (83.4%); Santa Monica (82.9%); and South Bay (80.1%). The highest ADR in the County was found in Beverly Hills at $357.47, which was up by a zesty 18.5% over the year to June. For the first 6 months of the year, Los Angeles County's occupancy rate has averaged 78.6%, above both Orange County (74.5%) and San Diego County (77.9%). This is the first time in several years that Los Angeles County has had a higher occupancy than both these areas.
Orange County's June hotel occupancy rate was 77.5% compared with 81.1% a year ago. However, the ADR rose by 10.8% to $142.64. The highest occupancy rate by area was found in Huntington Beach at 80.7%. The highest ADR was South County's $209.41, which was up by 17.7% over the year.
June hotel occupancy rates in San Diego County were also down over the year, 83.4% compared with 84.3% in 2005. The ADR increased by a modest 2.0% to $164.30, but revenue per room was still 0.9% higher this year. Seven areas in the County had occupancy rates over 80% during the month, including: Mission Bay (90.6%); South Bay (89.5%); Sports Arena/Old Town (88.8%); San Diego Bay Areas (86.5%); Downtown (85.5%); Mission Valley (85.4%); and North County/UTC (81.4%). The highest ADR was found in La Jolla, at $240.86 which was up by 4.6% over the year.
San Francisco area hotel trends for June
were also favorable.
In San Francisco the occupancy rate was 80.2% for June compared with
81.3% last year. However, the ADR rose by 9.3% to $166.46.
In the San
Jose/Peninsula area the recovery continued during June. The
rate was 72.0% compared with 65.6% last year. The ADR increased
7.2% to $113.18. (Jack
The Southern California economy continues healthy. As employment grew, both office and industrial market vacancy rates have dropped across the Los Angeles five-county region. Southern California has the tightest industrial market in the U.S. and a rapidly tightening office market. A growing challenge and concern for the area is the shrinking supply of both office and industrial space in the face of still brisk demand.
On-going analysis and research on major expansion activity in the Los Angeles five-county region conducted by the Los Angeles County Economic Development Corporation (LAEDC) revealed that businesses continued to relocate to larger facilities or expand their existing ones during the first half of 2006. The total number of expansions for the six-month period was 128 compared with 154 during the first six month period of 2005. A number of businesses have purchased buildings instead of leasing to take advantage of still low interest rates.
The LAEDC regularly tracks major business expansion activity in the Los Angeles five-county region. The LAEDC defines a "major business expansion" as a lease or building permit of at least $1 million or of 20,000 sq. ft. or more.
The number of expansions was down across all five counties in the region. In Los Angeles County, the number of major projects decreased by 5 to a total of 67. Orange County's level was down by 9 to a total of 38. The Riverside-San Bernardino area registered a decline of 7 major projects to a total of 18. Ventura County declined by 5 to a total of 5 major projects for the six-month 2006 period. There is a continued migration of businesses, especially distribution and warehouse companies to the Inland Empire for bigger space requirements, as well as for cheaper rents compared to the rest of the region. Both Los Angeles and Orange counties are running out of land to accommodate major industrial expansions. However, the Inland Empire market is also getting tight and rents are starting to increase there as well.
Some notable transactions include Ashley Furniture Industries' new 683,200 sq. ft. distribution and warehouse facility in Redlands; Pactiv Corp.'s expansion of their distribution and warehouse facility in San Bernardino, to 586,800 sq. ft.; Air Force Space and Missile Systems Center's new R&D facility in Los Angeles, with more than 535,000 sq. ft.; Minka Lighting and Lowe's Home Improvement distribution facilities both in Moreno Valley, at 532,000 sq. ft. and 508,000 sq. ft., respectively; Kuehne & Nagel Logistics Corp.'s new distribution facility in Rialto, with more than 493,800 sq. ft.; and Medline Industries' new distribution/warehouse facility in San Bernardino, with more than 404,500 sq. ft.
By industry sector, Professional Services posted the highest number of expansions (36), with financial services related firms leading the way. The next largest number of major expansions was in Logistics/Warehousing with 9, followed by Biomedical, Entertainment and Food industries, with 6 each. (Candice Flor)Summary file: http://e-edge.org/special/BER-midyear-2006.pdf
Several developments led to a decline in crude oil prices on Monday:
First, BP announced that it will resume oil production from the western operating area (WOA) of the Prudhoe Bay oil field after extensive inspections and discussion with Federal and Alaskan officials. The resumption of WOA production will bring back around 150,000 bpd (barrels per day) of production almost immediately, and up to 200,000 bpd by the end of the month. This means that 50% of the anticipated "lost production" will return to the market soon.
Second, BP has completed installation of metal sleeves over the corroded pipelines. Meanwhile, 16 miles of replacement pipelines have been ordered and will be delivered during the fourth quarter. Therefore, full production might not resume until sometime early next year. After the pipes are manufactured, they have to be transported to the Alaska North Slope via barges, trains, and finally trucks. It's a massive project and the dark, cold winter of Alaska doesn't make it any easier.
Third, interesting stories are emerging that show just how the oil industry is coping with the shutdown of Prudhoe Bay production. Norway is shipping crude oil from its stockpile in South Korea, which keeps a large reserve because of its lack of domestic oil production. Tankers are being redirected to transport both crude oil and refined oil products from countries such as Japan and South Korea that have no crude oil production. In turn, these nations will replenish their stockpiles using crude oil from the Middle East. While South Korea has a relatively small reserve of crude oil (as compared to our Strategic Petroleum Reserve), their stockpile is mainly privately owned and their operating arrangements make this crude more easily accessible to the oil companies than our government-owned crude.
Finally, assuming it holds, the cease-fire in southern Lebanon reduces the political risk premium in the oil prices. Three decades ago, Arab countries initiated the 1973 oil embargo to punish countries that supported Israel during the Yom Kippur War. While no such threats were made this time, there were always concerns that an expansion of the current conflict might lead to a disruption of oil supply. (George Huang)
BP's PR: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7020798
Related news regarding South Korea oil exports: http://archive.gulfnews.com/articles/06/08/11/10059003.html
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