The U.S. Census Bureau just released preliminary estimates of services industry revenues for nine industry sectors during second quarter 2010, and the results were quite interesting. Collectively, firms in these sectors took in about $2.28 trillion (yes, with a "t") last quarter. This represented an increase of +2.1% over the first quarter. The largest sector covered in the latest quarterly survey was Finance & Insurance, which garnered $801.5 billion, up by just 0.1% compared with the first quarter. Excluding that sector, the nonfinancial industries took in about $1.48 trillion (+3.2% over the quarter).
The eight nonfinancial sectors covered in the Census Bureau's current survey are listed below in order of size.
Seven of the eight nonfinancial sectors reaped higher revenues in second quarter 2010 than during the first quarter. The biggest increases were recorded by Arts, Entertainment & Recreation (+14.7%); Rental & Leasing (+13.8%); and Transportation & Warehousing (+10.0% over the quarter). Other Services was the only sector to record declining revenues over the quarter (-6.4%), due entirely to plunging revenues at "Religious, Grantmaking, Civic, Professional & Similar Organizations" (mostly nonprofits, revenues were down by an estimated -19% over the quarter).
Seven of the eight nonfinancial sectors also earned higher revenues in second quarter 2010 compared with the second quarter of 2009. The biggest increases were recorded by Transportation & Warehousing (+9.8% over the quarter); Administrative & Waste Management (+6.2%, primarily due to increased activity at employment services firms); and Professional, Scientific & Technical Services (+5.4% over the year). Other Services was also the only sector to record declining revenues over the year (-2.4%), due again to lower revenues at "Religious, Grantmaking, Civic, Professional & Similar Organizations" (down by an estimated -11% over the year).
Two other details of regional interest to emerge from this report:
Consumer credit contracted again in July, falling by -1.8% after dropping by -0.5% (revised) in June. By dollar volume, total consumer credit declined by -$3.6 billion over the month (seasonally adjusted) after falling by -$1.0 billion in June. July marked the 19th consecutive monthly decline in total consumer credit.
Revolving debt, including balances owed on store charge accounts and bank credit cards, took another steep dive in July (-6.3%). Over the past year, revolving debt has tumbled by -9.1% or by -$83.2 billion.
Non-revolving debt, increased in July, rising by +0.6%, mostly due to improving auto sales over the summer. Over the past year, non-revolving debt has expanded by just +0.2%
Consumer credit has plunged by -$79.6 billion during the past twelve months and by a total of $162.7 billion from its peak in July 2008. Consumers are still struggling to repair household finances and are doing it in large part by cutting back on credit card use. Households will probably continue to rein in borrowing until their incomes and employment start to show significant improvement. (Kimberly Ritter)
During the first two months of the new fiscal year 2010-2011, total receipts ($11.9 billion) were up compared with last year, but fell far short of disbursements ($15.8 billion). By the end of August, the State’s cash balance stood at -$13.8 billion. The latest financial results released by the State Controller for the General Fund show that fiscal year-to-date, total receipts increased by +3.7% compared with the previous year but were overwhelmed by disbursements, which rose by +29.7%.
On the revenue side, corporate tax receipts posted a steep decline, falling by -47.4% to $292.8 million (compared with FY2009-2010), while personal income taxes rose by +8.2% to $6.0 billion. Revenues from retail sales and use taxes climbed by +5.3% to $4.5 billion. Taken together, revenues from the “big three” revenue sources were up by +4.1% compared with the same time last year.
On the expenditure side, most of the major expense categories saw an increase last month. Local K-12 Education received $6.1 billion, which was up by +8.2% from the previous year, but Community Colleges saw spending decline by -24.8% to $719.3 million. Contributions to CALSTERS (the K-12 teachers’ pension fund) were up slightly – rising by +0.6% to $198.9 million (no contributions were made in August).
Spending for the Department of Corrections also increased, jumping by +48.3% to $1.3 billion while outlays for Health and Human Services rose by +43.1% to $469.3 million. Payments to General Government were up by +36.0% (to $374.2 million) and Legislative/Judicial/Executive rose by +19.0% to $242.3 million.
As of August 31, the state had $20.5 billion in borrowable resources against $13.8 billion in outstanding loans, which left $6.7 billion in unused borrowable resources. The outstanding loan balance is being covered entirely by internal borrowing and is comprised of $9.9 billion carried over from the previous fiscal year plus the current year increase of $3.9 billion.
In a statement issued with last month’s Statement of General Fund Cash Receipts and Disbursements, the State Controller noted that last month revenues were higher than the Governor’s May revision estimates and that disbursements were running behind projections. Thus, California would be able to meet payment obligations in the near term (September) and that a second round of IOUs would not be necessary for the time being. (Kimberly Ritter)
California maintained its position as the second largest exporting state in July (Texas #1, New York #3, Washington #4 and Florida #5), with total exports valued at $11.9 billion. Merchandise exports in July were up by +20.1% over the year, the ninth consecutive year-to-year increase.
The top five California export markets in July were Mexico, China, Canada, Japan, and South Korea. All of California’s top export markets experienced gains. California’s fifth largest market, South Korea, saw the biggest annual increase for the sixth consecutive month, with a surge of +66% over the year to July. The state’s second largest market, China, experienced the second largest year-to-year increase, with a +33% rise in July. Exports to Mexico, California’s largest market, recorded the third highest annual increase, with a climb of +13% over the year. Exports to Japan and Canada strengthened by +11% and +10%, respectively. From an industry standpoint, the top three product exports (ranked by dollar value) were computers & electronic products, machinery (except electrical) and transportation equipment.
On the import side, California remained the top importing state in July, with total imports valued at $28.5 billion. Texas, New Jersey, New York and Illinois were the other top importers. California merchandise imports increased by +24% from July 2009 to July 2010. Total imports in July were up by +17% year-to-date. (Ferdinando Guerra)
The U.S. Commerce Department reported that the U.S. trade deficit narrowed to $42.8 billion in the month of July, down from a revised $49.8 billion in June. The significant -14% decline followed three months of expanding deficits and was triggered by a strong rise in exports, which jumped to their highest level in nearly two years.
U.S. imports fell by -2.1% in July to $196.1 billion. The $4.2 billion monthly decline in imports reflected a drop in demand for consumer goods (televisions & VCRs), auto parts and food. U.S. exports rose by +1.8% to $153.3 billion in July due to an increase in foreign demand for U.S. made capital goods (especially civilian aircraft), other goods, and industrial supplies. Some major categories remained unchanged including foods, feeds, and beverages and consumer goods.
The U.S bilateral trade deficit with China (largest trade deficit with any country) declined slightly in July, falling to $25.9 billion from $26.2 billion in June. The deficit with China accounted for more than 50% of the total U.S. trade deficit. Imports from China were $33.3 billion in July, while exports to that nation were $7.3 billion. Year-to-date, the trade deficit with China has grown by nearly +18%. Exports to China have grown by +37% relative to last year, while imports from China have jumped by +21%. The monthly trade deficit with China remained below its record level of $28 billion in October 2008. U.S. trade deficits with Canada, Mexico, and Japan all narrowed in July, while deficits with Germany and the European Union widened. (Ferdinando Guerra)
Saturday, September 25: Valley Economic Development Center: Where's the Money Access to Capital Business Expo
8:00 AM - 2:30 PM at The Odyssey Restaurant (15600 Odyssey Drive), Granada Hills.
Join us for a day of Education, Resources & Business Growth! Discuss your financing needs with lenders – schedule a one-on-one consultation. Obtain information from a wide range of business resource providers. Attend workshops where these topics will be discussed by panels of experts.
Get your tickets today! Wednesday, November 10: The LAEDC 15th Annual Eddy Awards
6:30 p.m. Reception. 7:30 p.m. Dinner and Awards Program. At the Beverly Hilton. Contact Justin Goodkind (213) 236-4813 for sponsorship and tickets.
The Eddy Awards® is a cocktail, dinner, and awards gala to support fulfillment of the LAEDC mission to attract, retain, and grow businesses and jobs for the regions of Los Angeles County. Kaiser Permanent is the corporate honoree. The Awards were introduced by the LAEDC in 1996 to celebrate individuals, organizations, and now cities that demonstrate exceptional contributions to positive economic development in the region. We are also pleased to present the 2010 Most Business-Friendly City in Los Angeles County award. The winning cities will be announced live at the event.
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