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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.13 n. 46 - Released November 9, 2009 [Printer-friendly version] THIS WEEK'S HEADLINES:
Announcing ChooseLACounty.comThe LAEDC recently launched a new website to promote Los Angeles County as the premier location for businesses seeking to relocate or expand in the region. ChooseLACounty.com provides important information businesses need to know such as the major industry clusters of the region, including Fortune 500 companies headquartered here, the cost of doing business, special incentives and resources for businesses, major modes of transportation, foreign direct investment in the region, quality of life characteristics and much more. Visit Choose LA County today to learn about doing business in the region and how the LAEDC's Business Assistance team can help your business grow. A great way to get started is to check out “20 Reasons to Locate Your Business in LA County.”
Fewer Banks Tightened Lending Standards Last QuarterThe Federal Reserve recently released its Senior Loan Officer Opinion Survey on Bank Lending Practices for the third quarter of 2009. This survey addresses changes in the supply and demand of bank loans for businesses and households. In the latest survey, domestic banks indicated that they continued to tighten lending standards and terms over the past three months on all major types of loans to businesses and households. However, the net percentage of banks that tightened standards and terms for most loan categories fell compared with the second quarter and from peak levels reached late last year. On the demand side, the majority of responding banks reported a decline in most major loan categories with the notable exception of demand for prime residential real estate loans, which increased. Business Lending: Of the large banks surveyed, 14.0% reported tightening standards for commercial and industrial (C&I) loans compared with 31.5% in the second quarter and 83.6% at the peak (4q08). Banks remained slightly more cautious for small business borrowers – 16.1% tightened standards during the third quarter for C&I loans compared with 34.0% in the preceding quarter. The net percentage banks reporting a decrease in demand for C&I loans fell to 31.6% and the number of banks reporting a decrease in demand from small businesses fell to 35.7%. This was an improvement over the second quarter when the percentage of banks reporting weaker demand was 44.4% (large customers) and 54.7% (small customers). The percentage of banks reporting tighter standards for commercial real estate (CRE) loans also fell during the third quarter - to 33.9% compared with 46.3% in the second quarter and a peak of 87.0% (4q08). Although the overall trend shows improvement, lending standards remain tight relative to historic levels. On the demand side, 42.9% of banks reported lower demand for CRE loans, an improvement over the second quarter’s 63.0%. Household Lending: On net, 24.1% of banks reported they tightened standards on prime residential real estate loans, up slightly from the previous quarter (21.6%) but still down considerably from the peak of 74.0% (3q08). When considering nontraditional residential loans, 30.4% of banks tightened standards last quarter compared with 45.8% during the second quarter and 89.7% (4q08) when banks were most reluctant to lend. Demand for prime residential loans was up, with 27.8% of the survey respondents reporting an increase, but 4.3% of banks, on net, reported a decrease in demand for nontraditional loans. In spite of some improvement, tight credit remains a drag on the economy. Many banks have reduced lending in response to stricter underwriting standards. Additionally, demand from recession weary businesses and shell shocked consumers (struggling with the bleak labor market outlook and household balance sheets hollowed out by the collapse of housing prices and the financial crisis), remains sluggish. (Kimberly Ritter) PR: www.federalreserve.gov/boarddocs/SnLoanSurvey/200911/
Bay Area Hotels Muddle Along in SeptemberThe September report from PKF Consulting for Northern California hotels contained a surprise or two. In San Francisco, the average occupancy rate edged up to 87.2% from 86.6% last year. However, the average daily room rate (ADR) dropped by -16.2% to $172.74. By area in the City, the highest occupancy rate for September was found in Fisherman’s Wharf at 89.9%. This was down from last September’s 91.7%, and the area’s ADR was slashed by -19.9% to $153.24. The average September occupancy rate in San Jose/Peninsula in September came in at 63.7% compared with 68.6% last year. The ADR fell by -16.0% to $116.58. In case you hadn’t noticed, fees on hotel rooms are building up. You’ve already met the local hotel tax and the “California Tourism Assessment.” The “tourism marketing district” is a newcomer. It is being implemented by convention bureaus and hotels around the state to raise more money for promotional purposes. (Jack Kyser)
September Burbank Airport NumbersTotal passenger traffic at Bob Hope Airport (Burbank) decreased in the 12 months to September, as passenger counts declined by -9.7% over the year. Still this was better than the percentage year-to-date figure of -16.9%. Air cargo tonnage increased by +6.3% from September 2008 to September 2009. The percentage year-to-date figure was also encouraging, as total tons rose by +2.9 percent. (Ferdinando Guerra)
September California Export FiguresCalifornia maintained its position as the second largest state exporter in September with total exports valued at $10.4 billion. Texas remained the top state exporter in the nation and expanded its lead over California with total exports valued at $14.4 billion. California’s exports grew by +4.0% from August to September. However, exports were down by -16.3% in September 2009 compared with a year earlier. The slump has now been evident for eleven straight months. The top Californian export markets in September were Mexico, China (including Hong Kong and Macao), Canada, Japan, and South Korea. Exports to Mexico, California’s largest market declined by -13.8% over the year. California’s fifth largest market, South Korea, experienced the largest year-to-year decline, a -25.8% drop in September. Exports to China, Canada, and Japan weakened by -11.5%, -16.7% and -21.1%, respectively. From an industry standpoint, the top three product exports (ranked by dollar value) were computer & electronic products, transportation equipment and machinery. (Ferdinando Guerra)
September U.S. Trade Deficit Widens More Than ExpectedThe U.S. Commerce Department reported that the U.S. trade deficit widened to $36.5 billion in the month of September, from a revised $30.8 billion in August. The trade deficit expanded by +18.0% over the month. Imports grew by +5.8% in September to $168.4 billion, their highest rate of increase since 1993. The $9.3 billion monthly increase in imports reflected the U.S. economy was beginning to recover. The big story in September was that oil prices increased, causing the value of oil imports to rise by $4.5 billion. The strengthening in imports also reflected a jump in industrial supplies and materials, auto vehicles & parts and capital goods. U.S. exports increased by +2.9% to $132.0 billion in September due to stronger foreign demand for civilian aircraft, industrial machinery and petroleum products. This was the highest level of exports since December 2008. In addition, September was the fifth consecutive month that exports have expanded, reflecting the global economic recovery (predominantly in Asia) and a weaker dollar. Only exports of foods, feeds and beverages decreased in September. The U.S bilateral trade deficit with China rose by +8.5% in September to $22.1 billion from $20.2 billion in August, and continued to be the largest trade deficit with any country. However, the deficit with China has fallen significantly from its record level of $28 billion in October 2008. Imports from China were $27.9 billion in September, while exports were $5.8 billion. U.S. trade deficits with Germany and Japan narrowed in September, while deficits with Canada, Mexico and the European Union expanded. (Ferdinando Guerra) PR: http://www.bea.gov/newsreleases/international/trade/2009/pdf/trad0909.pdf Events of InterestsThursday, November 19: 16th Annual UCLA Real Estate Conference 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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