A San Diego-focused economic index inched upward for a third consecutive month in January, reaching a new post-recession high and adding momentum to the idea that the region might see stronger growth in 2017 than had been expected just a few months ago.
The University of San Diego Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose half a percent in January, a bit less than December’s 0.7-percent surge but otherwise the biggest month-over-month gain in at least a year.
The increase was fueled by broad improvements – in this order, from biggest to smallest: national economic factors, consumer confidence, help-wanted advertising, prices of local stocks and unemployment filings (done before release of EDD's January data). The only negative was local building permits, which suffered their biggest decline since November 2010.
Comments accompanying the March 3 update suggested it may be time for the center to reverse its earlier forecast that the local economy will grow more slowly in 2017 than it did in 2016.
“That forecast remains unchanged at this point, although continued strength in the index may eventually lead to a revision,” the center stated. “A lot will depend on the policies proposed by the new administration and whether or not they can be enacted.”
“Among the proposals that have been mentioned that might benefit the local economy are spending on infrastructure, tax cuts and a boost in defense spending,” it continued. “On the latter, San Diego could benefit from increased personnel and from increased shipbuilding as the Navy expands.”
“On the downside,” it went on, “increased trade barriers, particularly against Mexico and China, could hurt local companies that sell in an international market. Any gains from manufacturing returning to the United States would not likely benefit San Diego as those would involve heavy manufacturing, which is not a significant sector of the local economy.”