LEADING ECONOMIC INDICATORS TREND UP
Report From The Conference Board May 21, 2008

TWO STRAIGHT POSITIVE MONTHS

After five straight months of declines that correctly foresaw the economic softness that's prevalent at the moment, the  Leading Economic Indicators report from The Conference Board has started to predict a recovery in upcoming months. It has just released the April report, which was positive for the second month in a row.

The Conference Board actually releases three indices each month, Leading, Coincident, and Lagging. Stock prices, the interest rate spread, and housing permits showed good strength in April, offsetting negatives from average weekly hours and consumer expectations, and the leading index rose to 102.0. April was up 0.1 points, and based on revised data, the March index also had risen by 0.1. The current coincident index remained unchanged, and the lagging index was also up 0.1. Other positives in the new report were declining average weekly initial claims for unemployment, vendor performance, and manufacturers' new orders for consumer goods and materials.

The Conference Board says that after declining steadily since the middle of 2007, the leading index appears to have stabilized based on the March and April numbers. The coincident index has been declining since last fall, with, the Conference Board says, "widespread" weakness in recent months. Noting that real Gross Domestic Product was up 0.6% in the first quarter -- same as last year's fourth quarter, it says the current behavior of the composite indexes still suggests that economic activity is "likely to remain weak in the near term." The recent positives, however, may help to build up advertisers' confidence for better results coming in the year's second half, which many of them -- including most of the automakers -- have already said they are expecting.

 

Florida Home Improvement Loan Activity Strong Amid Slowing Market
Wednesday, March 7th, 2007

Remodeling activity remained steady in the fourth fiscal quarter of 2006, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI).

What this means in local terms is that Florida home improvement loan activity is not sagging off as much as traditional home purchase loan demand.

The current index edged up slightly from 47.8 to 48.2 on a seasonally adjusted basis and future expectations moved up to 46.0 from 45.4. The RMI measures remodeler perceptions of market demand for current and future residential home remodeling projects.

“Remodeling retained strength across most of the country compared to late last year,” said NAHB Remodelers Chairman Mike Nagel.

“Certainly regional economies and housing markets play an important role, but overall we see maintenance of high levels of remodeling activity and solid future prospects.”

The RMI component for the rental market indicated a stronger than expected increase in activity for that sector in the fourth quarter of 2006.

The current conditions index for renter-occupied markets increased from 38.8 to 44.1, while current conditions in owner-occupied units decreased from 51.4 to 49.7 in terms of remodeling demand.

At a time when Florida mortgage rates have remained steady, future expectations for the renter-occupied units also grew from 37.1 to 42.4, and owner-occupied units edged up from 45.0 to 45.6.

“Though the substantial reductions in home sales and new housing production have impacted the remodeling market to some degree, we feel that remodeling of both owner-occupied and rental housing will remain strong compared to other areas of the industry,” said NAHB Chief Economist Dave Seiders.

“With record levels of owners’ home equity and a constant need to upgrade the older housing stock, the remodeling outlook appears quite good for years to come.”

Regionally, the Southeast reported the most growth as current conditions increased to 52.8 and future expectations moved up to 51.1. While the slumping of the Florida housing market has been widely reported, this indicates record amounts of equity waiting to be tapped.

The current conditions in the West grew to 52.4, but future expectations fell to 51.3. In the Northeast, current conditions moved down to 45.7 while future expectations increased to 50.1. Only the Midwest showed declines in both, with current conditions decreasing to 44.4 and future expectations lowering to 35.7.

The RMI is based on a quarterly survey of home remodeling professionals, whose answers to a series of questions were assigned numerical values to calculate two separate indexes.

The first index gauges market conditions based on remodelers’ reports of major and minor additions and alterations, plus maintenance work and repairs, on both owner- and renter-occupied dwellings.

The second index gauges expectations for the near future and is based on remodelers’ reports of their calls for bids, amount of work committed for the next three months, job backlogs and appointments for proposals. This can be considered a gauge of future Florida home equity loan activity