A Year of Gains in Local Economy

The San Diego economy rose “sharply” in March, according to the University of San Diego’s monthly index of local indicators. It was the 12th straight month of increases for the index.

Pulling the trend positive were local stock prices and a positive outlook for the national economy, according to the index’s director, economist Alan Gin.

Consumer confidence was the only one of six indicators to decrease from the month before. There were slight gains in the pieces of the index that measure construction activity, unemployment and help wanted ads.

Gin was encouraged by some signs in local employment:

As was mentioned in previous reports, employment is the indicator that comes out most regularly at the local level, and employment tends to be a lagging indicator in recent recessions and recoveries. March employment numbers show a gain of 5,000 jobs compared to February, which was the best monthly gain in local employment since February 2008.

The unemployment rate still edged up for the month because more workers returned to the workforce in search of employment, which itself is a positive development. It is a sign that the unemployed are a little more optimistic about their prospects and no so discouraged as to give up looking for work altogether.

You can read the whole index here.

Along similar lines, I wanted to share an e-mail from Nathan Moeder in response to my story last night. Moeder is a principal with The London Group Realty Advisors, a local real estate firm.

He said he thought my story represented “a little more harsh perspective than what actually is happening” in San Diego’s economy. Here’s more:

I, too, share the same concerns regarding housing and the big question mark about whether we have legs to stand on. For what it’s worth, here are my thoughts.

I disagree that zero permits for construction is a stark sign of pessimism about the future. That’s just realistic and does not indicate that people are pessimistic about the commercial market. It’s completely appropriate that there were zero permits because developers understand that there is a lot of vacant inventory that needs to be filled well before we construct any new buildings. It’s expected.

Employment isn’t sending mixed signals either. The year over year rate of decline has slowed and we have had some positive growth in the last couple months. It doesn’t mean that we are in full recovery mode, but it is a welcomed sign of positive news. The fact that unemployment rose is attributable to people re-entering the job market to look for jobs. Makes sense — people are reading more that the worst is behind us and are probably beginning to look (for a second time) for work. But I wouldn’t say the employment data is mixed — there is already a clear trend of stabilization.

What do you think? Share your thoughts in the comments.

– KELLY BENNETT

 

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K Hernandez

K Hernandez
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