A predictor of Southland economic activity shows that the region is losing momentum, with little chance of a strong rebound in 2003.
Cal State Fullerton said Thursday that its Southern California index of leading economic indicators declined by 0.06% in the first quarter of 2003. It was a letdown after a revision to the index showed a 0.4% increase in the fourth quarter.
Economist Adrian Fleissig, author of the index, said that although the swift end to the conflict in Iraq has removed some uncertainty, weaknesses remain that are putting a damper on economic activity. Those include lackluster business spending, a stagnant labor market and national and state budget woes.
“The economy wasn’t in great shape before the war, and those underlying factors haven’t gone away now that it has ended,” he said. “We’re just not going to see a lot of growth in the Southern California region this year.”
Fleissig’s index, based on components including employment, building permits and consumer confidence, is consistent with other economic data released Thursday showing that the U.S. recovery is flagging.
The Institute of Supply Management said its much-watched index of national manufacturing activity contracted for the second straight month in April. The Commerce Department reported that new construction dropped 1% in March, its largest decline in seven months. And the Labor Department said new claims for jobless benefits totaled 448,000 last week, the second-highest level this year.