The BCREA Commercial Leading Indicator (CLI) fell 0.6 points to 145.5 in the third quarter of 2023, while the six-month moving average fell to 146.3 points. Compared to the same quarter in 2022, the index was down by 3.2%.

The CLI rose in the employment category while declining in the economic and financial categories. A 5% increase in office employment (finance, insurance, and real estate) more than counteracted a 2% drop in manufacturing employment, causing a net increase in the index’s employment component from the second quarter. Meanwhile, modest declines in inflation-adjusted retail sales, wholesale trade, and manufacturing sales combined to pull the economic component into negative territory. Finally, rising spreads between corporate and government borrowing costs indicated growing borrowing costs for developers and pulled the financial component downwards. At the same time, a drop in average prices of Real Estate Investment Trusts further dragged the financial component into negative territory.

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Commercial Leading Indicator Resumes Decline in Third Quarter by Ryan McLaughlin | Economist | BCREA