The Economic Data Global Express (e-EDGE)

v.6 n.47       Released Nov. 27, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

U.S. ECONOMY RANKED MOST COMPETITIVE IN THE WORLD

     The World Economic Forum (WEF), based in Geneva, Switzerland, has ranked the United States as the world's most competitive economy.  The WEF publishes its rankings of 80 countries annually using an index comprising key determinants of economic performance.  This year's index, published last week, lists the U.S., Finland, Taiwan, Singapore, and Sweden as the top 5 economies by this reckoning.  Countries that dropped in the rankings from one year ago are: (1) Canada dropped from #3 to #8;  (2) Finland slipped from #1 to #2; (3) Australia dropped from #5 to #7; and (4) The Netherlands fell from #8 to #15.  Countries that moved up the rankings scale over the past year are:  (1) Taiwan moved up from #7 to #3; (2) Switzerland climbed from #15 to #6; (3) Denmark moved up from #14 to # 10; (4) the United Kingdom inched up a notch from #12 to #11.  Japan joined the "top 15 club, with its ranking of number 13 and Germany also joined the club with its ranking of number 14.
      The WEF ranks countries according to criteria such as technology, public institutions, macroeconomic environment. The United States was rated best of the lot for its leading edge technology and its favorable business climate which nurtures entrepreneurship and risk-taking.  Noteworthy is the poor rating of the U.S. in the "public institutions" arena due to the Enron, WorldCom, Anderson scandals and other instances of corporate malfeasance.
     The World Economic Growth Competitiveness Index is made up of two separate approaches to the analysis of competitiveness.  The first emphasizes a country's prospects for growth over a 5 to 8 year period and was originally developed by former Harvard economist, Jeffrey Sachs.  The second focuses on a country's effective utilization of its current stock of resources, including institutions, market structures, and economic policies--developed by Professor Michael Porter of Harvard Business School.
     It is significant that Mexico ranks as low as 45th in the pack, but not surprising that the two largest Latin American economies, Brazil and Argentina, are in 46th and 63rd positions respectively.  Rather surprisingly, though, is South Korea's somewhat "low" ranking of 21st out of 80 countries.  Considerable weight is given to these rankings in investment and trading decisions as well as country risk analysis.  Be aware that drastic changes have been made by WEF in the past 5 years with respect to the evaluation of individual countries both in the emerging-market world and in advanced industrial nations.  (Ken Ackbarali)
 

CONSUMER PRICES ROSE SLIGHTLY

     The US Producer Price Index rose significantly last month, but the October Consumer Price Index (CPI) was within its normal range, registering at 0.3% increase.  Compared to a year ago, the CPI was up by 2.0%.  Food prices were stable overall, rising by only 0.1% over the month.  Energy prices rose by 1.9%, the largest increase since the 4.5% jump in April.  Gasoline prices rose by 3.8% and were 29.9% higher than a year ago.  Household fuel oil prices rose by 1.7%.  The core CPI, which excludes food and energy price, rose by 0.2%.  Medical care costs posted a 0.6% increase and were 4.8% above the year ago level.
     Locally, the LA metro area CPI rose by 0.2% in October.  Local CPIs are not seasonally adjusted.  The October CPI was 3.0% above the year-ago level.  Food prices rose by 0.5% over the month and were 1.5% higher than a year ago.  Housing costs were higher by 0.6% last month and 5.0% higher than a year ago.  Natural gas costs rose by 2.0% last month and were 32.4% higher than a year ago.  Gasoline prices actually fell by 3.4% last month, but they were 6.8% more expensive than in October 2001.  The core LA metro area CPI was higher by 0.2%, and 2.9% above the year-ago level.
     Up north, the Bay Area CPI rose by 0.4% over the past two months.  Housing costs actually fell by 0.2%, reflecting the depressed housing markets there.  Gasoline prices were 2.9% below the August level.
     Did the port shutdown have an impact on prices?  It is difficult to gauge from the CPI data, which was not out of the ordinary.  There were stories of dumping of fresh veggies into local markets, but otherwise merchants were unwilling to adjust prices because of this temporary supply disruption.  (George Huang)
US PR: http://www.bls.gov/news.release/cpi.nr0.htm
LA PR: http://www.bls.gov/ro9/ro9cpila.htm
Historical LA CPI: http://www.e-edge.org/cpi-la.htm
Bay Area PR: http://www.bls.gov/ro9/cpisanf.htm
 

RETAIL E-COMMERCE CONTINUES TO GROW

     U.S. retail e-commerce (e-tail) sales during the third quarter were 34.3% higher than a year ago.  In comparison, total retail sales rose by just 5.8%.  Compared to the second quarter, e-tail sales were up by 7.8% (total retail sales: +0.3%).  E-tail sales rose from 1.05% of total retail sales (excluding food service) in 3Q01 to 1.34% in 3Q02.
     What's fueling the strong growth?  E-tailing is moving past the hype of its early days and becoming more mature.  Marketing efforts of e-tailers are now more rational (e.g., no more million-dollar drawings every week), even if they are less appealing to consumers (e.g., mass e-mailing).  Ancillary services such as credit card online fraud protection and comparison shopping services help reassure consumers of safety and value.  With the shorter holiday shopping period this year, analysts expect more harried shoppers to turn to online shopping than last year.  (George Huang)
PR: http://www.census.gov/mrts/www/current.html
 

FOURTH QUARTER 2001 RETAIL SALES

     The State Board of Equalization has just released the 4th quarter 2001 taxable sales numbers.  We generally look at the retail store trends, but there are also taxable business and personal service transactions and sales by "all other outlets," and this data told an interesting tale.
     Retail sales in the state during the 4th quarter of 2001 were up over the year a modest 1.1%, after a 0.1% decline in the third quarter.  Preliminary data for the year pointed to a 2.4% increase in retail sales, quite a slowdown from the 12.8% advance in 2000.  While retail sales managed a modest increase in the 4th quarter, taxable business and personal services sales declined over the year by 3.6% and the sales of other outlets dropped by 10.1%.
     Around Southern California, retail sales in Los Angeles County during the 4th quarter were up over the year by 1.6%, while the increase for 2001 as a whole was 2.2%.  In 2000, the yearly increase was 11.1%.  Orange County recorded a 3.3% increase in retail sales during the 4th quarter of 2001, while the preliminary increase for the year was 3.8%.  Riverside County saw retail sales in the 4th quarter increase by 9.3%, while the 2001 total was ahead by 8.1%.  San Bernardino County saw 4th quarter retail sales move ahead by 6.5%, while the year's total was up by 5.7%.  The 2001 total for the two-county metro area increased by 6.8%.
     Retail sales during the 4th quarter of 2001 in San Diego County were up by 4.8% over the year, while the annual total recorded a 5.3% gain.  Ventura County came in with a 4th quarter increase of 6.8%, while the year's total was ahead by 5.3%.
     Fourth quarter 2001 retail sales results weren't pretty in the Bay Area.  San Francisco County saw sales decline by 13.4%, while the year's total was down by 8.7%.  In Santa Clara County, 4th quarter sales were off by 17.1%, while the total for 2001 dropped by 9.3%.  (Jack Kyser)
Data: http://www.boe.ca.gov/news/tsalescont01.htm
 

OCTOBER CONTAINER NUMBERS HIT BY LOCKOUT

     The recent lockout at West Coast ports had a big impact on the number of containers moved at the Long Beach/Los Angeles port complex in October.  The number handled was down by 17.8% over the year to a total of 772,289 TEUs.  In the months running up to the disruption, record numbers of containers had been handled by the local ports, with August at a new high of 1,032,729 TEUs.
      The number of loaded import containers handled at the ports during October was down by 17.3%, while the number of loaded export containers was off by 36.0%.  Traffic flows at the ports are slowly getting back to normal.  The agreement on a six-year contract is more good news.  (Jack Kyser)
POLA data: http://www.portofla.org/statistics/detailmonth.htm
POLB data: http://www.polb.com/html/2_portStats/teus.html
 

AGREEMENT REACHED AT THE WATERFRONT

     The International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) reached a tentative agreement over the weekend, a month before the government-imposed restraining order expires.  Details of the agreement are not yet available, but both sides are said to have made major concessions.  One key gain to the shippers is the ability to use computer tracking systems that can improve productivity and accuracy.  Workers are reported to have gained in the wages and benefits area.  LAEDC has prepared a comprehensive state-by-state analysis of the impact of trade disruption.  It is available at http://www.laedc.org/data/economic_research/ports_labor_dispute_2002.shtml  (George Huang)
PR: http://www.pmanet.org/pubs/negotiations/FMCSandDOL-PressReleases.pdf
LAEDC's special ports page: http://www.e-edge.org/special/ports.htm
 

APARTMENT CONFERENCE

     The Real Estate Conference Group presents the "Real Estate 2003" conference.  It will be held on Tuesday, Jan. 21, 2003, at the Beverly Hilton Hotel.  Please visit http://www.realestateoutlook.com for more information.
 

HOLIDAY NOTICE

     LAEDC offices will be closed on Thursday, Nov. 28, and Friday, Nov. 29, in observance of Thanksgiving.  e-EDGE for next week will be released as scheduled.
 

VARIOUS EVENT CALENDARS

     To prevent the e-EDGE from listing too many events, we encourage you to visit our events pages:
LAEDC events: http://www.laedc.org/data/events/index.shtml
World Trade Center Association events: http://www.wtcanet.org/index_event.htm
LAEDC's economic development-related events: http://www.laedc.org/events/calendarevent.asp
 

TRADE SHOWS LISTINGS (Repeat announcement)

     LAEDC is now compiling a comprehensive listing of trade shows in Southern California.  Please send us such information.  Thank you so much.
     Our current listing includes fashion/apparel, textiles, shoes, home furnishings & giftware, and manufacturing.  It's available at http://www.laedc.org/trade_shows.html
 

QUICK STATS:

* BLS: US Consumer Price Index for 10/02: +0.3% (9/02: +0.2%)
* BLS: LA Area Consumer Price Index for 10/02: +0.2% (9/02: +0.2%)
* Census: US exports for 9/02: -0.4% (8/02: -0.5%)
* Census: US imports for 9/02: -0.5% (8/02: +2.4%)
* Census: US trade deficit for 9/02: US$38.0bil. (8/02: $38.3bil.)
* Census: US housing starts for 10/02: -11.4% to 1.60 million annual units (9/02: +11.0% to 1.81mil.a.u.)
* Census: US retail e-commerce sales for 3Q02: +7.8% (2Q02: +3.9%)
* Conference Board: US Index of Leading Economic Indicators for 10/02: +0.0% (9/02: -0.4%)
* Natl Assn of Realtors: US existing home sales for 10/02: +6.1% to 5.77 million annual units (9/02: +2.6% to 5.44mil.a.u.)
* US Treasury: US Treasury budget surplus/deficit for 10/02: -$54.0 billion deficit (9/02: $41.7bil. surplus)

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 research@laedc.org. To contact LAEDC, please call 213-622-4300.

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.

To send us comments regarding e-EDGE, please e-mail to research@laedc.org.