The BCREA Commercial Leading Indicator (CLI) fell 3.2 points to 145.5 in the first quarter of 2024, while the six-month moving average fell to 146.5. Compared to the same quarter in 2023, the index was down by 1%.

First Quarter Highlights

• The economic activity index declined in Q1. Inflation-adjusted retail trade (-1.7%), wholesale trade (-2.5%t), and manufacturing sales (-5.3%) each fell from the previous quarter, pushing the economic component down.

• Office employment (financial, insurance, real estate, and professional services) fell by 0.4% in the first quarter, while manufacturing employment declined by 1.3%. The employment component declined from the previous quarter, contributing negatively to the index.

• The financial component of the index also declined in the first quarter. Real Estate Investment Trust (REIT) prices declined by 8.5%, pushing the component down. However, interest rate spreads declined for a second consecutive month, indicating lower borrowing costs for companies relative to the government amid expectations of forthcoming rate cuts. This offset some of the effects of declining REIT prices on the CLI, but on net, the financial component was still slightly negative.

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Commercial Leading Indicator Fell in First Quarter 2024 by Ryan McLaughlin | Economist | BCREA