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Economic Reports & Studies
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The Economic Data Global Express (e-EDGE)The Kyser Center for Economic ResearchThe Economic Data Global Express (e-EDGE) is a free, weekly broadcast of useful economic news for the greater Los Angeles area. It covers news and statistics at the international, national, California and local levels. Past e-EDGE newsletters are available online back to July 2000. Subscribe to e-EDGE and receive current economic news and major developments. Your e-mail address will not be disclosed to any outside party (including e-EDGE sponsors) under any circumstances.
v.14 n.35 - Released August 30, 2010 [Printer-friendly version] THIS WEEK'S HEADLINES:
Corporate Profits Much Better in Second Quarter 2010The Bureau of Economic Analysis has released preliminary estimates of corporate profits in the second quarter of 2010 (2q2010). The results continued to be impressive. Seasonally adjusted, total pre-tax profits from “current production” (which exclude inventory profits and include other adjustments) rose by +4.6% during the 2nd quarter from 1q2010. This was the sixth consecutive year-on-year increase and put the level of second quarter adjusted profits about 65% above the 4q2008 trough. U.S. financial industries’ profits edged down by -0.1% (annual rate) in the 2nd quarter compared with the first quarter, while nonfinancial industries’ profitability rose by a respectable +8.1%. Total corporate profits were well up—by +39.2%--compared with 2q2009. In particular, profits of U.S. financial industries last quarter were up by a huge +48.3% over the year (as the financial crisis dampened early 2009 profits). U.S. nonfinancial industries’ profits grew at a similar rate, rising by +47.1% over the year. Net profits from the “rest of the world” increased by +18.2% over the year. [FYI, rest of the world profits are defined as the difference between U.S. receipts of profits earned in the rest of the world (which grew by +24.8%) and U.S.-based profit payments to companies and residents in the rest of the world (+42.8%).] (Nancy D. Sidhu) Source: http://www.bea.gov/newsreleases/national/gdp/2010/gdp1q10_3rd.htm
Nonresidential Construction in July – Still Looking for a Way UpThe report for nonresidential construction activity through July from the Construction Industry Research Board contained a few positive numbers but overall, nonresidential construction remains stuck in the doldrums. In Los Angeles County, total nonresidential permit values in the county increased by +4.6% during the first seven months of this year compared to the same period in 2009. Hotel permit values were up by +163.5% (compared with last year’s very low level of activity), industrial dropped by -18.0% and office fell by -6.7%. Retail permits jumped by +43.5%. In Orange County through July, total nonresidential permit values were down by -1.3%. Office permit values increased by a factor of nearly 14 (from virtually no activity last year), while retail rose by +9.4%. Hotels fell by -14.4% and in the industrial sector, permits valued at $23 million have been issued so far this year versus none last year. Nonresidential construction activity in Riverside County has seen a sharp increase in activity so far this year – total permits in the county through July were up by +45.5%. No industrial permits have been issued so far this year, but office permits soared by +418.8%, hotel permits increased by +106.4% and retail permits were up by 49.0%. In San Bernardino County, nonresidential construction is challenging industry observers with the question of, “How low can it go?” Total permit values in the county were down year-to-date by -36.5%. Office permits were off by -44.3% compared with this time last year; industrial permits were down by -50.0%, retail plunged by -30.9% and no new hotels have been built so far this year. In San Diego County, total nonresidential building permit values in the county so far in 2010 were down by -7.0%. The decline was primarily due to a slump in industrial construction – permit values declined by -64.4% during the first seven months of this year. On the other hand, office was up by +76.5%, retail increased by +53.0% and $4.0 million in new hotels were permitted versus zero last year. In Ventura County, total nonresidential permit values in the county were down by -8.7% over the comparable period last year. No permits have been issued year-to-date for industrial or hotel buildings. Office permits were up by +327.7% (to $5 million), and retail increased by +58.7%. In the 9-county Bay Area, the total value of nonresidential permits year-to-date was almost even with last year – down by just -0.4%. Industrial permits were up by +313.7% and office surged by +157.3%. However, retail tumbled by -33.5% and no hotel permits have been issued so far this year. (Kimberly Ritter)
Residential Construction in JulyThe total number of housing permits issued in California during July jumped by +41.9% to 48,100 units from 33,900 units a year earlier (seasonally adjusted annual rate or SAAR). The bump in permits came exclusively from the volatile multi-family sector. Single-family homes dropped by -5.2% to 22,000 units. In contrast, the rate for multi-family homes soared by +143.9% to 26,100 units. Over the month, permits for single-family homes plunged by -22.0%, while the number of multi-family permits increased by +30.5%. In comparing the first seven months of 2010 to the same period last year, total new housing permits were up by +21.6%. Single-family home permits rose by +7.2% and multi-family permits climbed by +51.4%. In Los Angeles County, 886 permits were issued in July compared with 721 permits (+22.9) posted a year ago. Permits for single-family homes dipped by -2.8% over the year to 172 units, while the number of multi-family units permitted was 714 compared with 554 (+31.3%) in July 2009. Year-to-date, the total number of housing permits issued in Los Angeles County was up by +18.7%; single-family permits rose by +11.9% and multi-family permits increased by +22.1%. [Note: Data at the county level are not seasonally adjusted.] The July numbers for Orange County looked a little better than last month. The total number of housing permits issued was up by +33.4% (to 203 units) compared with the same period last year: 140 permits (+121.1%) were issued for single-family homes, while the number of multi-family units permitted dropped by -25.9% to 63 units. On a YTD basis, total housing permits increased by +6.8%. During the first seven months of this year, 937 single-family homes were permitted (+24.3%), while permits for the county’s multi-family sector moved in the opposite direction. Multi-family permits fell by -14.9% to 515 units. In the Riverside/San Bernardino area, total housing permits in July fell by -16.8% over the year to 510 units. Permits for single-family homes declined by -8.7% (to 399) and the number of multi-family units permitted tumbled by -36.9% (to 111). So far this year, a total of 4,002 housing permits were issued in the Inland Empire compared with 3,621 last year (+10.5%). The July permit count in Ventura County was a meager 14 units compared with 41 issued in July 2009. During the months January to July 2010, 341 housing permits were issued, which was up by +35.9% from the same period last year. In San Diego County, the total number of units permitted last month was 236 compared with 183 (+29.0%) a year ago. During the first seven months of 2010, the total number of permits issued in San Diego County was up by +28.2% compared with January to July 2009. (Kimberly Ritter)
Source: http://www.cirbdata.com/ California’s Resale Housing Market in JulyThe California Association of Realtors (CAR) just released their July 2010 report for existing home sales and prices in California. Statewide, sales of existing single-family homes plunged by -20.8% compared with July 2009 to 440,370 units (seasonally adjusted, annualized rate). Meanwhile, the median price was up by +10.4% to $314,850. This represented the ninth consecutive year-over gain in monthly median price. The median price in July was -47.0% below the peak of $594,530 reached in May 2007, but was +28.4% higher than February 2009 when the median price in California troughed at $245,230. In Los Angeles County, unit sales tumbled in July by -20.3% over the year, while the median price edged up by +1.8% to $345,410. In Orange County, unit sales fell by -12.6% but the median price was up by +2.8% to $514,180. The Riverside-San Bernardino area added another month to a string of consecutive monthly declines. The number of homes sold in July plummeted by -29.9%. Prices, on the other hand, climbed by +15.4% to $190,870. Unit sales in San Diego were dismal as well – slumping by -15.5% even though the median price increased to $389,440 (+4.5%). Ventura County saw unit sales retreat by -7.5% over the year and the median price fall by -2.7%. In the San Francisco Bay area, unit sales dropped by -17.0% over the year. The area’s median price increased by +11.3% to $607,510. Comparing July sales and median prices with June:
The CAR reported that the unsold inventory index for all types of homes rose to 5.8 months in July, compared with 4.0 months at this time last year. The drop in July’s sales was expected – most industry observers were of the opinion that the federal home buyers’ tax credit pulled a number of June/July sales into May. (Kimberly Ritter) Source: http://www.car.org/newsstand/newsreleases/junereport/?view=Standard
Global Economic MonitorJapan: The Japanese Finance Ministry announced last week that Japan’s exports slowed for a fifth straight month in July. However, exports still increased by +23.5% compared to a year earlier. Exports rose by +27.7% in June after climbing by +32.1% in May on year-to-year basis. A pronounced slowdown in world demand would present a very big problem for the Japanese export-led economy. The other key issue facing exports remains the strength of the Yen, which hit a 15-year high vis-à-vis the U.S. dollar last week. The Ministry of Finance announced it will try to stabilize the Yen to prevent its going any higher. Thailand: Thailand’s government announced last week that (the Los Angeles Customs District’s #5 trading partner) Thailand’s GDP expanded by +9.1% in the second quarter compared with a year earlier after experiencing growth rate of +12% in the first quarter. The GDP resulted was higher than expected as the economy overcame political unrest. The country’s central bank (Bank of Thailand) raised interest rates for the second consecutive time last week as growth has been superseded by inflation concerns. At the same time, the main concern going forward will be maintaining strong export growth, as Thai exports contribute nearly 60% to overall GDP. (Ferdinando Guerra)
Events of InterestSaturday, September 25: Valley Economic Development Center: Where's the Money Access to Capital Business Expo 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 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 city will be announced live at the event. The Economic Data Global Express (e-EDGE) is a free service of the Los Angeles County Economic Development Corporation (LAEDC). Permission to quote any proprietary part of this release is granted given proper credit. Distribution is allowed provided that no modifications are made to the original content. Sponsors of this service do not necessarily endorse all opinions stated herein. For more information, please e-mail to eedge@laedc.org. To contact LAEDC, please call 213-622-4300.
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