San Diego County’s economy has hit a three-month slump, a study from University of San Diego shows.
The monthly Index of Leading Economic Indicators looks at building permits, stock prices, unemployment claims and other factors researchers use to determine how the county is doing.
The index, released Thursday, has shown declines the last three months, which the study said was a turning point in the local economy. The last time there was a downturn lasting more than three months was in 2006.
“It’s a little bit worrisome,” Alan Gin, author of the study, said. “In this case, it could be a negative turning point. I think what this means is we could see a slowdown in terms of the growth of economic activity.”
A large reduction in residential units authorized by building permits was the major culprit, dropping to its lowest level since October 2010. Just 136 permits were authorized in September — down from early 1,000 from May.
September’s new permits were for 121 single-family homes and just 15 for multi-family buildings, according to the California Homebuilding Foundation.
Gin said the reduction stems from a lack of buildable land and construction laborers leaving for better job markets. He said it is bad for the economy because there is less work for construction workers and other professions, such as real estate agents and appraisers. Also, people who move into new homes tend to make a lot of purchases, so the retail sector is hit as well.
Like similar national economic indicator studies, the one from USD’s Burnham-Moores Center for Real Estate is forward looking. It predicts a slowdown in job growth in the second half of 2016.
The report noted an uptick in people filing for unemployment.
Local stocks, like national financial markets, dropped in August and September. The Bloomberg San Diego County Index was valued at 126 points on Aug. 5 but was down to 112 points on Thursday
On the plus side, consumer confidence was up 33 percent.
National economic indicators dropped, as well, largely brought on by a decline in stock prices and fewer building permits, according to The Conference Board.
This article was originally published in the San Diego Union Tribune and can be found HERE.
