e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The Census Bureau’s lead sentence reads: “New orders for manufactured durable goods decreased in March … by -1.3%.” Pretty downbeat. Actually, most of the numbers below the headline were quite good. Only two major sectors reported lower orders last month—fabricated metal products (down by -1.2%) and aircraft & parts (which plunged by 42.2%)—and both had previously reported increased orders in February (of +3.5% and +6.8% respectively).
A more revealing headline would read: “New orders for durable goods excluding transportation increased by +2.8% in March, after growing by +1.7% in February.” Six durable goods sectors reported higher orders in March. In order of size, these were led by computers & electronic products (+3.4%); motor vehicles & parts (+2.5%); and machinery (+8.6%). Indeed, new orders year-to-date for all eight sectors were higher than the first three months of 2009.
Manufacturers’ order books suggest that production will increase in coming months. What’s happening now? The same report reveals that manufacturers’ shipments of durable goods increased by +3.1% during the first three months of 2010 compared with early 2009. In this case, the headline figure looks good, but the details are decidedly mixed. Year-to-date shipments of computers & electronic products grew by +10.7%, and motor vehicles & parts were up by +3.2%. However, year-to-date shipments were still down for: fabricated metal products (-1.5%); machinery (-3.2%); and aircraft & parts (-4.3%). In the latter case, defense aerospace shipments were higher in 2010, while shipments of commercial aircraft have decreased.
Quietly, almost unnoticed except in industrial areas, the nation’s manufacturing sector is stirring. The upturn is being led by high tech manufacturing, a California-centric sector, and by automotive. However, their growing order books mean that most other industrial sectors should join the upturn soon. (Nancy D. Sidhu)
Source: http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
The March report from the Construction Industry Research Board offered a few signs of hope for the beleaguered nonresidential building industry, with plus signs reported in a number of areas.
In Los Angeles County through three months, industrial permit values jumped by +486.5% over the comparable 2009 period, but remained well below the 2008 pace. Office construction still trailed last year by -20.5%. In the retail segment, the three- month permit valuation total was behind last year by -54.5%. No hotel permits were issued during March, but the $24.1 million in permits issued so far this year was still better than last year’s 0. Overall, total nonresidential building permit values were down by -14.9% year to date.
In Orange County through three months, industrial permits valued at $23 million were issued, compared with none in 2009. However, office construction jumped by +253.4% over the comparable 2009 period. Retail building activity also stirred, with the three month total now ahead of last year by +53.8%. No hotel permits were issued. Overall, total nonresidential building permits issued so far in Orange County were up by +15.1% over last year.
Industrial construction in Riverside County remained dormant through March, while office permit values were ahead of last year by +525.6%. The three-month total for new retail permit activity was behind last year by -24.3%. Hotel building sprang to life in March, with $12.9 million in permits issued, compared with none last year. Overall, total nonresidential permit values were up over last year by +22.6%.
San Bernardino County’s industrial building segment continued to pick up a little steam with a three-month total of $15.8 million compared with none last year. Similarly, $1.8 million in office permits were issued compared with none for the three month 2009 period. Retail activity also surged, with the three month 2010 total now up by +124.0% over last year. No hotel permits were issued. Overall, total nonresidential building permit values were just a tad below (-0.5%) the comparable 2009 period.
In San Diego County, industrial permit values through three months lagged last year by -91.8%. The three month 2010 permit total for office buildings was ahead of last year by +201.3%. There was a similar trend in retail, with the three month total was up by +56.1% over last year. No hotel permits were issued. Overall, total nonresidential building permit totals in the County were down by -29.5% from last year.
In Ventura County so far in 2010, no permit have been issued for either industrial structures or hotels. Permits valued at $4 million were issued for office buildings, but at this time last year no permits had been issued for this type of building. The only action was in retail, where new permits pushed the three month total up over last year by +350.0%. Overall, total nonresidential building permit activity in the County was up by +27.1%.
In the nine county Bay Area, industrial building permit values through three months jumped by +395.2% over last year, while office permits were ahead by +499.4%. However, retail lagged last year by -51.1%. No hotel permits were issued to date. Overall, total nonresidential permit values were up by +7.4% over the year. (Jack Kyser)
Source: http://www.cirbdata.com/
The total number of housing permits issued in California during March slipped by -1.0% to 39,300 units from 39,700 units a year earlier (seasonally adjusted annual rate or SAAR). Single-family home permits were up by +11.0% to 23,300 units but multi-family permits dropped by -14.4% to 16,000 units. Over the month, permits for single-family homes fell by -7.5%, while the number of multi-family permits plunged by -26.9%.
In Los Angeles County, 832 permits were issued in March compared with 600 permits posted a year ago (+38.7%). Permits for single-family homes rose by +79.9% to 277 units, while multi-family permits increased by +24.4% to 555 (year-over-year). Year-to-date, the total number of housing permits issued was down by -1.4%. During the first quarter of 2010, single-family permits were up by +35.4% but multi-family permits declined by -13.3%. (Note: data at the county level are not seasonally adjusted).
Residential construction in Orange County continued to make significant gains last month compared with March 2009. A total of 124 permits were issued during the month, bringing the year-to-date total to 442 units. The YTD total represented an increase of +63.1% compared with the same period last year. Permits for single-family homes rose by +19.2% to 279 during the first three months of 2010 while the tally for the county’s struggling multi-family sector was 163 units (YTD), compared with just 37 multi-family permits issued during the same time last year.
In the Inland Empire, housing permits were up by +14.4% to 547 units in March (1,736 YTD). Single family housing accounted for 96% of the total last month - 525 units versus 22 multi-family units. For the first three months of this year, single-family permits shot up by +78.6%, while permits for multi-family residences slumped by -40.7%.
The March permit count in Ventura County was 132 units versus 37 in March 2009. Three months into 2010, Ventura County residential construction was up by +74.0%. Moving south to San Diego, the total number of units permitted last month was 298 compared with 521 a year ago. Still, the total number of permits issued year-to-date (841) was up by +21.2% compared to the first quarter of 2009.
The results in the Bay Area were mixed in March. The San Francisco metro area posted 62 permits for the month, bringing the current YTD total to 116 (down by -68.7% compared with the same period last year). In the Oakland metro area, a total of 270 permits were issued, or 845 year-to-date (+44.0%). In the San Jose area, total permits for the first quarter were up by +44.0% to 845 units (with 270 issued in March).
Among California’s 28 metropolitan areas, total new units permitted were up in 25 areas during the first quarter of 2010 from the same period last year. The number of single-family and multi-family units permitted increased in 20 areas, with the largest gains posted in Riverside-San Bernardino, followed by Oakland and San Jose. (Kimberly Ritter)
Source: http://www.cirbdata.com/
The California Association of Realtors (CAR) recently released their March 2010 report for existing home sales and prices in California. Statewide, sales of existing single-family homes rose by +2.5% compared with March 2009 to 516,590 units (seasonally adjusted, annualized rate). Meanwhile, the median price soared by +20.8% to $301,790. On a month-over basis, sales fell by -2.5% but the median price increased by +7.8%.
In Los Angeles County, unit sales during March were up over the year by +5.5% and the median price increased by +11.6% to $329,190. In Orange County, unit sales advanced by +14.9% during March. The median price also increased, rising by +10.9% over the year to $493,120. Compared with February, the median price ticked up by +0.7% in Los Angeles County while in Orange County, the median price rose by +2.2%.
In the battered Riverside-San Bernardino area, unit sales experienced another sharp drop – falling by -26.8% compared with March 2009 (following hefty declines of -24.1% in February, -26.2% in January and -19.3% in December), but jumped by +27.4% for the month. The area’s median price gained by +10.5% over the year, rising to $184,930.
Unit sales in San Diego County were up by +4.0% in March while the median price climbed by +20.4% to $393,600. On a month-over basis, sales were up by +35.6% and the median price advanced by +5.8%. Ventura County posted a decline in unit sales (-2.3% over the year) in March, but the median price increased by a robust +21.9%.
In the San Francisco Bay area, unit sales increased by +20.4% over the year and were up by a thumping +48.1% for the month. The area’s median price increased by +34.8% to $544,120.
The CAR reported that the unsold inventory index for all types of homes fell to 5.0 months in March, compared with 5.6 months at this time last year.
Last month’s statewide median price gain of +20.8% was the largest in more than five years. According to the CAR, the end of the federal tax credit on April 30 may slow the pace of sales during the coming months, but the inventory of unsold homes is expected to remain tight, which should result in higher prices going forward. In spite of the recent advances in median price, home affordability is still near record highs. Four years ago, the ratio of median price to household income was ten to one. Currently, the ratio stands at four to one. (Kimberly Ritter)
Source: http://www.car.org/newsstand/newsreleases/marchsalesandprice/
Movements in the U.S. Producer Price Index (PPI) were mixed during March. Prices in the index for finished goods ticked up by +0.7% last month after declining by -0.6% in February. Prices of core finished goods (less food and energy) edged up by +0.1%, after rising by the same amount over the previous month. From March 2009 to March 2010, finished goods prices increased by +6.0%.
In the early stages of production, prices of intermediate goods were up by +0.6% after edging up by +0.1% in February. Prices quoted by manufacturers of intermediate goods have increased by +7.7% since March 2009. Prices in the crude goods index gained in March (+3.2%), recovering most of the ground lost in February (-3.5%). Over the year, the crude index soared by +33.4%.
In the finished goods category, the index for energy goods rose by +0.7% last month after falling by -2.9% in February. Gasoline prices led the advance (+2.1%). Gasoline prices have now risen in five of the last six months. Residential electric power also contributed to the increase (+1.2%). The index for finished foods climbed by +2.4% last month after inching up by +0.4% in February. This was the sixth monthly increase in a row. Most of the uptick in food prices was the result of a surge (+49.3%) in the prices of fresh and dry vegetables. The core index for finished goods was up by +0.1%. Except for a jump in the index for jewelry, platinum & karat gold (+5.9%), price movements outside the more volatile energy and food indexes were muted.
Prices of intermediate materials increased by +0.6% in March after rising by +0.1% in February. The energy goods index was up by +0.4%. Much of the advance in intermediate energy goods resulted from higher prices for commercial electric power (+0.8%). Meanwhile, prices for intermediate foodstuffs were pushed down (-0.5%), primarily due to lower prices for prepared animal feeds (-2.9%). March was the third consecutive monthly decline for the foodstuffs index but over the year, prices have risen by +2.6%. Led by higher prices for basic organic chemicals (+3.2%), the core intermediate index moved up by +0.7%.
The price index for crude materials rose by +3.2% last month with higher food prices (+3.4%) contributing about 40% to the overall increase. In March, a lift in prices of slaughter livestock (+6.4% overall), and hogs in particular (+15.4%), accounted for about 70% of the advance in crude food prices. Higher energy prices (+1.3%) also helped to drive up the crude materials index last month. The largest jump in this category came from a +12.1% rise in crude petroleum prices. The core crude materials index rose by +6.0% for the month. More than half of last month’s increase was attributable to iron and steel scrap prices, which increased by +12.3%. (Kimberly Ritter)
Source: http://www.bls.gov/news.release/pdf/ppi.pdf
The PKF Consulting report for February revealed that the hotel occupancy rate in San Francisco was up to 69.8%, compared with 59.1% last year. However, the average daily room rate (ADR) slipped by -5.0% to $146.54. By area in the City, the highest occupancy rate of 74.2% was found in the Financial District. And the ADR was only down by -2.7% to $179.21.
Things really perked up in San Jose/Peninsula with a February occupancy rate of 70.2% compared with 57.2% last year. The ADR declined by -6.7% to $117.47. The reported up turn in tech activity seems to be spilling over. (Jack Kyser)
IMF: The International Monetary Fund (IMF) released its 2010 World Economic Outlook (WEO) last week. The IMF raised its forecasts for the world economy in 2010, as it now expects the global recovery to be stronger than anticipated in January 2010. They are now projecting the world economy to grow by +4.2% in 2010 versus the January 2010 forecast of +3.9%.
The Fund expects the advanced economies to grow at a much slower pace than the emerging economies. The advanced economies are forecasted to grow by +2.3% in 2010, while the emerging and developing economies are projected to expand by +6.3% this year. The U.S. economy is expected to outperform both the Euro Area and Japanese economies over the year. Meanwhile, in Asia, the Chinese and Indian economies are once again projected to outperform the rest of the world, growing by a very robust +10.0% and +8.8%, respectively.
Taking a regional perspective, the Los Angeles Customs District top five trading partners are forecasted to expand by:
Wednesday, May 12, 2010: International Trade Outlook: L.A. County's Global Economic Ties
Breakfast & Networking: 8:00 a.m. - 9:00 a.m. Program: 9:00 a.m. - 10:30 a.m. At Hilton Long Beach & Executive Meeting Center, Catalina Ballroom (701 West Ocean Boulevard).
Los Angeles County has one of the world’s largest and most dynamic economies, thanks in part to its strong economic ties with nations from around the globe. In the first of an upcoming series of Key Country reports, the Kyser Center for Economic Research will release a special report on China, L.A. County’s largest trading partner. The report which will feature trade connections between China and L.A. County, investments that local companies have made in China, the educational and cultural ties between the two regions, and the challenges and opportunities that lie ahead. Additionally, the LAEDC will present its annual International Trade Trends & Impacts report highlighting the trade activity for the Southern California 5-county region.
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