The Economic Data Global Express (e-EDGE)

v.11 n.48      Released Nov. 26, 2007                     [Click here to print this page]
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

This Week's Headlines:


U.S. Housing Watch--October Starts

     The U.S. Census Bureau reported last week that U.S. housing starts unexpectedly rose by +3.0% in October to 1.23 million units (seasonally adjusted annual rate or SAAR), after falling by -11.4% in September and by -1.8% in August.  Construction was started on about 884,000 single-family homes in October, down by -7.3% from September—and the lowest level for single-family starts since October 1991.  Volatility reigned in the multi-family sector (apartments and condominiums), as 345,000 units were started last month, well up from 239,000 units in September—but below the 373,000 units started in August.

     Total housing starts peaked back in January, 2006 at 2.29 million units, according to the Census Bureau.  Starts reached another new low for this downturn in September, and as of October were down by -43% from the peak quarter.  Single-family and multi-family starts were down by -49% and -8% respectively. 

     The underlying trends in housing construction continue to be negative.  The latest monthly survey of homebuilder attitudes taken by the NAHB (National Association of Home Builders) continued at September’s record low level last month (data go back to 1985).  More than four-fifths of the builders reported slow sales, and 83% complained about lower buyer traffic.  Expectations for future sales also remained dismal. 

     Lenders’ stricter standards for granting all types of mortgages haven’t helped the situation, and it’s harder to find subprime and jumbo mortgages at favorable rates.  Most builders and industry observers expect housing construction activity to move down some more from here.  They disagree only on how far down starts will fall and how long it will take until the bottom is reached.   (Nancy D. Sidhu)


PR: http://www.census.gov/const/www/newresconstindex.html

U.S. Industrial Production Weaker in October

     The Federal Reserve Board reported last week that industrial production in the U.S. fell by -0.5% in October (seasonally adjusted), after increasing by 0.2% in September and by 0.1% in August.  The weakest performance was turned in by motor vehicles & parts, down by -1.0% over the month, following declines of -3.0% in September and -1.3% in August.  Meanwhile, while output of high technology products (computers & peripherals, communications equipment and semiconductors) rose by 0.5% in October, following increases of 1.1% in September and 0.9% in August.  Excluding automotive and high tech, manufacturing output fell by -0.4% last month, held back by production declines in business supplies (-0.9%), consumer goods (-0.6%), construction supplies (-0.4%), and materials (also -0.4%).


     The industrial sector looked a bit better if we take a longer view.  Total industrial production last month was up by 1.8% compared to October 2006.  Output of high tech products has risen by 15.8%, a relatively healthy pace.  However, production of motor vehicles and parts was up by just 0.9% over the year.  Excluding these two important sectors, industrial production increased by 1.1% over the year.  Business equipment was the best performer, with output up by 3.8%.  Materials production grew by 1.4%.  Production of consumer goods was up by 0.6% compared to October 2006, while output of construction supplies was even with the year ago level and business supplies edged down by -0.2%.  


     Weakness in automotive, housing, and some machinery/equipment sectors is clearly dragging down U.S. manufacturing.  The only real strength has been in the high technology and aerospace sectors, both important to California and the Los Angeles area.   (Nancy D. Sidhu)


PR: http://www.federalreserve.gov/releases/g17/Current/default.htm

October Containers Mixed

     The total number of containers handled at the ports of Los Angeles and Long Beach during October was down by 4.9% over the year to 1.38 million TEUs, the second decline in a row.  For the first 10 months of 2007, total container volume at the ports was 13.08 million TEUs, up by just 0.1% over the comparable 2006 period.

     Loaded import container activity during October at the two local ports continued to be disappointing.  Los Angeles saw a decline of 6.6% over the year, while Long Beach was down by 7.3%.  Combined import container activity during the month was off by 5.2%.    However, loaded export container activity continued to boom, with Los Angeles up by 11.9% over the year to October, while Long Beach was ahead by a whopping  32.5%.  The combined loaded export container count for the month was up by 21.2% and the largest ever monthly count for the ports.

     At the port of Oakland during October, import containers were down by 1.3% over the year, while exports were up by 12.5%.  The number of empties handled was off by 10.9%.  The total number of containers moved at Oakland during the month was up by 0.8% to 215,266 TEUs.  At the 10 month mark, the total number of containers handled at the port was down by 0.9% to 1.99 million TEUs.  (Jack Kyser)


Port of LA data: http://www.portoflosangeles.org/factsfigures_Monthly.htm
Port of Long Beach data: http://www.polb.com/about/port_stats/latest_month.asp

September Hotel Numbers OK

     The September report from PKF Consulting was mixed.  In Los Angeles County, the occupancy rate was 78.5% compared with 77.8% last year, while the average daily room rate (ADR) rose by 8.8% to $153.23.  Five areas in the County had 80% plus occupancy rates during the month, including: Santa Monica (83.0%), West Hollywood (82.5%), LAX (81.9%), the South Bay (81.6%), and Marina del Rey (80.6%).  The highest ADR was once again in Beverly Hills at $395.70, which was up by 14.8% over the year.

     The September hotel occupancy rate in Orange County was 69.7% compared with 71.8% last year.  The ADR was up by 4.8% to $146.59.  For the month, the highest occupancy rate was Costa Mesa’s 75.0%, while South Orange County had the highest ADR of $224.85, up by 3.3% over the year.

     San Diego County’s hotels recorded a 75.1% occupancy rate in September, compared with 76.8% last year.  The ADR rose by 3.9% to $169.03.  Two areas in the County had occupancy rates over 80% -- San Diego Bay at 81.8% and Sports Arena/Old Town at 80.2%.  One surprise – the San Diego Bay area moved past La Jolla to claim the highest ADR during the month.  It was $242.23, which was up by 0.3% over the year.  (Jack Kyser)


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