SD economic forecast gloomy

An index used to gauge the health of San Diego’s economy suffered its largely monthly decline on record in October, a University of San Diego economist reported Tuesday.

The Index of Leading Economic Indicators for San Diego County fell 2.3 percent in October, with every component measured down significantly during the month, according to Alan Gin, who compiles the index for USD’s Burnham-Moores Center for Real Estate.

The largest contributor to the index’s decline, which has fallen 30 of the past 31 months, was a drop in local stock prices and a surge in the number of initial claims for unemployment insurance.

Also down were building permits, consumer confidence, help wanted advertising and the outlook for the national economy.

The economy is being weighed down by ongoing problems in the real estate and financial systems that have spilled over into other sectors including, retail and auto sales, according to the index.

Gin’s report said the outlook for San Diego’s economy remains negative through the first half of next year. After that, it’s projected to stabilize.

“This downward spiral is projected to continue through the first half of 2009,’’ the index states.

“The economy is expected to stabilize in the second half of the year due to a combination of lower oil and gas prices, increased home sales and another stimulus package by the federal government.’’