An index measuring San Diego’s economy rose again in May by 0.6 percent, the ninth straight time it has increased, and 17th time in the past 18 months.
Last month’s advance of the USD-Burnham Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County was led by sharp increases in building permits and local stock prices. Small gains in consumer confidence, help wanted ads, and the outlook for the national economy also boosted the overall index.
The sole negative of the six-component index was a higher number of initial claims for unemployment insurance, which is measured as a negative.
Alan Gin, the USD economics professor who compiles the index, said the outlook for the local economy is for good growth through the end of this year and at least the first part of 2014. That has been the unchanged outlook for all of this year.
Gin noted that the region’s housing market has helped to fuel this growth. “As employment grows and incomes increase, the demand for housing increases which leads to higher home prices,” Gin said. That, in turn, leads to increased building permit activity, higher employment in the construction and real estate related industries, and an enhanced ‘wealth effect’ for homeowners who see the value of their homes rise, he said.
Earlier this week, the S&P/Case-Shiller Home Price Index for April showed San Diego’s index rising 3.7 percent from March. For the full year to April 2012, San Diego’s home values increased 14.7 percent, two points above the national composite index for 20 cities.
All 20 cities showed positive year-over-year returns for at least the fourth consecutive month, the Case-Shiller report said.
— Mike Allen