Index Projects Solid Economic Growth in Area
News, OC Register – March 2013
Corporate / Corporate consulting
RGL's resident Economist, Adrian Fleissig, discusses the Southern California Leading Economic Indicator index and its recent positive trends in an OC Register article.
By: Laura Barron-Lopez
Right now would be a good time to start a business in Southern California, according to a Cal State Fullerton economic index released this week.
In the next three to six months the region can expect a moderate increase in economic activity, based on a fourth-quarter rise of 0.82 percent in the value of the university’s Southern California Leading Economic Indicator index. The index is now at 108.65, its higher level to date.
Since economist and project head Adrian Fleissig started tracking Southern California’s economy in 2000, the indicator has proved accurate in its predictions. For more than three years, it has increased, leaving behind the dismal numbers of 2009 when the recession was at its worst.
There is a good deal to be positive about, he said. “The economic activity seems to be going steadily up now and it wouldn’t be a bad time to increase production or to start a business.”
The index tracks seven factors: U.S. money supply, Standard & Poor 500 stock index, change in the interest rate spread (the difference between the 10-year U.S. Treasury bond and the federal funds rate), regional nonfarm employment, regional unemployment rate, regional building permits and the Pacific region consumer confidence index. All of these components moved in a positive direction except unemployment.
“Southern California lagged behind when the country was coming out of the recession,” Fleissig said. “But now we seem to be catching up and are at the same level as the U.S. economy.”
The data include San Bernardino, Riverside, Ventura, Imperial, Los Angeles and Orange County.
As appeared in the OC Register, March 2013.