A think tank founded by health care entrepreneur and former mayoral candidate Steven Francis launched a new barometer yesterday for measuring the county’s economic health.
And the economy isn’t looking too swift, according to Francis’ San Diego Institute for Policy Research, which opened in January.
Four out of five indicators of economic activity in San Diego County declined sharply over the past several months, according to a report compiled by Kelly Cunningham, a former economist for the San Diego Regional Chamber of Commerce who now works at Francis’ institute.
Based on data from February and March, Cunningham listed several warning signs about the health of the local economy:
In February, the labor force declined by 5,300 jobs – the first net decrease for that month since 1993, the low point of San Diego’s post-Cold War recession. The hiring numbers strongly rebounded in March, bringing the total for the two months back above the historical average.
Residential construction in February was 54 percent lower than in February 2006. Between 2004 and 2006, the total valuation of home building in the county plunged by 36 percent.
Consumer confidence, based on a random sample of 500 San Diego residents, declined 9.2 percent between January and March. “The overall index reveals consumers on the whole are more positive of future expectations, but there is a noticeable decline, especially as to local consumers’ confidence for future expectations,” Cunningham said.
New business licenses dropped 27 percent between February 2006 and February 2007. Overall, the number of new business licenses has fallen to its lowest level since March 2002.
The one bright note in the institute’s report came from the San Diego stock index, which went up 5.9 percent from January to the end of February. But the index remains 1.1 percent lower than in February 2006.
Francis, who ran unsuccessfully for mayor in 2005, is a former Republican majority leader in the Nevada state assembly who founded and now chairs AMN Healthcare Services Inc., the largest temporary health care staffing company in the United States.
He concedes that the six-person institute, funded solely out of his own pocket, is a tool for keeping his influence in local politics.
Francis said he hopes that the findings in yesterday’s index, which show troubled times for San Diego businesses, will encourage city leaders to introduce more pro-business policies.
“San Diego needs a tremendous amount of good leadership,” he said. “Even though I wasn’t elected mayor, the information goes out to all elected officials, chiefs of staff and CEOs. Make no mistake. We are trying to influence the process with our analysis and opinions, which we think are based on common sense and logic.”
Francis’ bimonthly index complements an index of leading economic indicators produced each month by the University of San Diego’s Burnham-Moores Center for Real Estate.
Like Francis’ index, the USD index uses stock prices and consumer confidence as two gauges of the local economy. But the USD index also uses residential building permits, unemployment filings, help-wanted listings and the state of the national economy to forecast how the local economy will perform six to nine months in the future.
“It sounds like (Francis’ institute) has a mix of leading and concurrent economic indicators,” said Alan Gin, who has compiled the USD index since 1991. “Something that would measure the current state of the economy would be good, since we don’t really have that right now.”
Gin said he isn’t worried about the competition. “I’ve been at this for a long time, so I figure the more the merrier,” he said.
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