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November 19, 2009 (San Diego) – Looking for some good news about the local economy?
Many of our economic indicators have improved significantly, according to Manpower Workforce Report: A San Diego Labor Market Snapshop (Business edition), published Nov.9 and reprinted with permission below. Among the findings: Economic indicators compiled by the University of San Diego are up for the sixth straight month in San Diego County, local unemployment has dipped slightly, venture capital investment in our region is positive, and the outlook of local business leaders surveyed revealed cautious optimism. See how our region's economic recovery compares to the national overall:
Unemployment Rate (Unadjusted)
Sept. 2009 Aug.2009 (revised) July 2009 (revised)
San Diego County 10.2% 10.6% 10.4%
State of California 12.0% 12.2% 12.1%
United States 9.5% 9.6% 9.7%
Source: EDD Monthly Press Release, October 2009
• The unadjusted unemployment rate for San Diego County slipped to 10.2% during September a drop of four-tenths of a percent from the revised August rate of 10.6%. The local rate is three and eight-tenths of a percent higher than the 6.4% rate of a year ago. The rate in the county is one and eight-tenths of a percent below the statewide rate of 12%, and seven-tenths of a percent above the national rate of 9.5%. Marin County had the lowest rate in the state at 8%, and along with Santa Barbara County at 8.5%, Napa at 8.7%, and Mariposa at 8.8% were the only counties with rates below 9%. During September, 28 counties, four more than the prior month, had rates between 9% and 12%, while 32 counties, one more than the prior month, had rates above 12% to 18%. Imperial County had the highest rate in the state at 30.1%, an increase from the previous month’s 28.7% rate. (EDD Monthly Press Release, October 2009)
• The Index of Leading Economic Indicators for San Diego County developed by the Center for Real Estate at the University of San Diego rose dramatically, a full one percent, for the sixth consecutive month and suggests the turn-around of the local economy is for real. The one percent increase in the Index matched the largest increase that occurred in March 2005. A strong rise in local consumer confidence led the upward move and was aided by solid gains in local building permits and in the outlook for the national economy. On the downside, initial claims for unemployment insurance were up significantly, and there were smaller decreases in local stock prices and help wanted advertising. Alan Gin, author of the Index, indicated that the numbers are encouraging but the outlook for the local economy continues to be weak for the rest of 2009 and the first half of 2010. Gin stated that in terms of employment and jobs, which typically is a lagging indicator, “Businesses tend to be cautious about hiring new workers until they are sure the recovery has taken hold. As a result local unemployment could approach 11 percent before improving.” (University of San Diego release, Oct. 27, 2009)
• The nation’s economy grew at a 3.5% pace during the third quarter, the best showing in two years and was fueled by government-supported spending on cars and homes. The dramatic growth was the strongest signal yet that the longest, deepest downturn since the Great Depression could be on the way out. Many economists caution that the third quarter spurt was driven by government incentives and industry trends will fade, leaving a wobbly economy. But, a second report for the U.S. Department of Labor revealed that the number of people claiming jobless benefits for the first time dropped only slightly in the latest week, evidence that the labor market remains weak. (usatoday.com, Oct. 29, 2009)
• San Diego County countered the national venture capital trend during the third quarter by posting a 20 percent increase in funds while the U.S. average stalled, according to a Dow Jones VentureSource report. The region drew $248 million for 29 deals in the third quarter up from $203 million and 24 deals in the second quarter but down from the $296 million for 20 deals during the third quarter of 2008. The 2009 three-quarter total venture capital investment for the region is $646 million for 68 deals. Experts foresee steady growth in venture capital investments for the region during the fourth quarter as well. (Daily Transcript, Oct. 19, 2009)
• Using funds provided by the American Recovery and Reinvestment Act, the San Diego Workforce Partnership and its contractors provided more than 3,200 youth with paid work experience over the summer. The first Hire-a-Youth program in more than 10 years placed many students in the private sector as well as in non-profits and education. “Considering the downturn in the local economy, there was real leadership by the private sector to step up and provide these young people employment opportunities,” said Margie de Ruyter director of the program. For many youth this was their initial step into the world of work and chance to gain invaluable work experience.
• A survey sampling 89 business leaders in San Diego County by the Daily Transcript found a majority expects no change in their companies’ employment or capital spending levels. Of those polled, 48.2% expect their company’s employment level to remain constant while 29.4% of the business leaders in the county expect to increase their number of employees over the next 6 months, and 22.4% expect a decline. Only 23% expect their capital spending to increase while 43.7% expect no change, and 33.3% predict a decline over the next six months. (The Daily Transcript, Oct.9, 2009)
• Construction spending in September posted a better-than-expected performance, powered by the largest jump in housing in more than six years. The advance provided hope that the battered housing sector is starting to turn around and will provide support for the overall economy as it struggles from the recession. The U.S.Commerce Department indicated that total construction spending was up 0.8% in September that included a 3.9% increase in residential construction spending and a 1.8% decline in nonresidential construction. There is a worry that the first-time-home buyers tax credit may have provided a temporary spending spree. The housing industry has lobbied for an extension of the tax credit to further stimulate sales. (msnbc.com, Nov. 2, 2009)
Pluses:
• During September 2009, non-farm employment added 900 jobs. Government added 4,900 jobs with most of those occurring in the local educational systems, which added 4,000 employees after the summer break. Educational and health services added 1,400 jobs, with 1,000 of these occurring in private education, and 400 in healthcare and social services. (EDD Monthly Press Release, October 2009)
• Between September 2008 and September 2009, government was the only sector to add jobs, up by 1,700 with most of those occurring in local education. (EDD Monthly Press Release, October 2009)
Minuses:
• In September 2009, leisure and hospitality, after five monthly gains, shed -3,800 jobs resulting from cutbacks at the end of the summer tourist season. Employment in the manufacturing sector was down by -900 jobs while construction declined by -600 jobs. (EDD Monthly Press Release, October 2009)
• Between September 2008 and September 2009, non-farm employment declined by -52,000 jobs, an annual decline of -4 percent. During that time, professional and business services declined by -11,400 jobs; trade, transportation, and utilities shed -12,100 jobs with nearly two-thirds occurring in retail trade; construction lost -10,200 jobs; while manufacturing shed -8,300 jobs. (EDD Monthly Press Release, October 2009)
• Unemployment rose in 23 states last month as the economy struggled to create jobs in the beginning stages of the recovery. The Midwest benefited most from sharp drops in unemployment particularly in Indiana and Ohio. The jobless rate in Indiana fell to 9.6% from 9.9% in August, and Ohio’s rate dropped to 10.1% from 10.8%. Nevada, Rode Island, and Florida last month posted their highest jobless rates on records dating back to 1976. Michigan reported the nation’s highest rate at 15.3%, followed by Nevada at 13.3%, and Rhode Island at 13%. (SignOnSanDiego.com, Oct. 21, 2009)
Mergers and Acquisitions:
• ResMed, Inc., a San Diego-based developer, manufacturer, and distributor of sleep and respiratory medical equipment, acquired Laboratoires Narval in France, which manufactures and distributes devices for sleep apnea. The acquisition adds another therapy to ResMed’s patented products and provides access to selected European markets. (The Daily Transcript, Oct. 6, 2009)
• San Diego-based Gen-Probe, a maker of infectious testing and blood screening products, has acquired Prodesse, a Wisconsin company, which develops and markets diagnostic tests for influenza and other infectious diseases. The acquisition was a $60 million cash transaction plus an additional $25 million if Podesse meets certain financial and regulatory milestones in 2010 and 2011. (Gen-Probe release, Oct. 22, 2009)
The Manpower Workforce Report is prepared by the San Diego Workforce Partnership’s Research and Labor Market Intelligence Team. Editors include Sandra Moreland, Gary Moss, and Sibylle Rohling. Development of this publication is paid for by U.S. Department of Labor employment and training grants and a sponsorship from Manpower-San Diego.
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