Region’s growth is expected to cool
Southern California’s economic growth will slow in the next three to six months, cooled by a slump in housing construction, according to an index to be released today.
Cal State Fullerton’s Southern California index of leading economic indicators fell 0.09% in the third quarter, after a 0.15% drop in the second quarter. It was the third time in the last four quarters that the measure had declined.
Only two of the index’s seven components fell. But a large decrease in regional building permits, along with a negative reading in the interest rate spread, was more than enough to offset positive readings in Pacific region consumer confidence, the Standard & Poor’s 500 stock index, real money supply, regional unemployment and regional nonfarm employment.
The index is a Southland version of the Conference Board’s national index of leading economic indicators. But the Conference Board’s measure lately has rebounded. It increased 0.2% in October after a revised 0.4% gain in September, as higher stock prices and a more confident consumer offset the slumping real estate market. And some analysts say the worst of the housing slump may be over.
“If permits come up slightly better in the next quarter, the indicator may turn positive,” said Cal State Fullerton economist Adrian R. Fleissig, who compiled the index. “I don’t believe the housing market is going to crash at all,” he added.
The Fullerton index projects economic activity for Los Angeles, Orange, San Bernardino, Riverside, Ventura and Imperial counties.
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