Jobs, homebuilding hardest-hit areas
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
February 1, 2007
San Diego County’s economic indicators declined in December for the ninth month in a row because of sharp dips in job openings and homebuilding, the University of San Diego reported in its monthly economic forecast.
The index of leading economic indicators – compiled by the university’s Burnham-Moores Center for Real Estate – suggests that growth will be sluggish through at least the first half of 2007.
Advertisement“The predominant issue is the housing market,” said USD economist Alan Gin. “The numbers last year were about as bad as people thought they would be. The worry is that housing is going to take the rest of the economy with it. It could set up a situation where San Diego does worse than the national economy.”
Three of the six leading indicators were negative in December: building permits, unemployment insurance filings and help-wanted advertising. The other three indicators – stock prices, consumer confidence and the national economic indicators – edged up slightly, but not enough to counter the declines.
Home-building permits in December were 37 percent lower than in December 2005. The total number of residential units authorized during 2006 was the lowest annual total in a decade. Permits for single-family homes were down 40 percent for the year, while multi-family permits were down about 18 percent.
“If there’s any good news, it’s that the housing supply is being reduced,” Gin said. With fewer houses, prices could begin to stabilize, he said.
In the meantime, the real-estate decline appeared to have a negative effect on local employment.
San Diego help-wanted advertising dropped for the fourth month in a row in December, partly because of a drop in ads from architectural firms. December marked the first time that online advertising in San Diego turned negative since Monster.com began releasing data in May 2005.
Unemployment claims have been rising since April, reflecting layoffs in construction. About 7,400 construction workers and 900 real estate workers have lost their jobs since June. But continued hiring by hotels, restaurants and professional services has kept the unemployment rate at historical lows, dipping to 3.7 percent in December.
“Even though we have our job growth is getting slower, we’re still able to keep the unemployment rate lower than the state and national averages,” said Marney Cox, chief economist of the San Diego Association of Governments. “That’s probably a nod to the diversification of the economy here.”
Nevertheless, consumer confidence rose slightly in December, thanks to a decline in energy prices. For the past several years, consumer confidence in San Diego has mirrored price fluctuations at the gasoline pump.
Local stock prices were nearly flat in December, even though the Dow Jones industrial average was at an all-time high. San Diego stocks, which tend to be shares of small to mid-sized companies, have not fared as well as the Dow’s blue chips. And San Diego stocks lag the average of the Nasdaq stock exchange, where most local stocks are listed.
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Dean Calbreath: (619) 293-1891; [email protected]
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