July 6, 2015
This week we review our proprietary DIVER Geo Score, highlight the strongest and weakest States as well as provide you a link to get the scores themselves. We compare the health of the economies of Connecticut and New Jersey and update our charts of the Puerto Rico GDB-EAI to reflect newly published data.
June Geo Scores
Last week, we released the most recent DIVER Geo Scores for States, counties and cities. The DIVER Geo Score represents a relative score of the economic health of a U.S. State, county or city. Based on a scale of 0-10, with 10 being the best, this data is updated monthly and is calculated from multiple economic and demographic factors related to three primary data categories—employment, income and housing.
The DIVER Geo Scores are available here.
The most notable change for the month in the Top 10 Strongest ranking is that Connecticut replaced Virginia in the tally. After lagging for several years, Connecticut has been improving since June ’14. Virginia’s Geo Score has been declining since its peak in May ’12.
There were no changes in the composition of the Bottom 10 for the month, but a few shifts in rankings (New Mexico and Tennessee down; and West Virginia and Nevada up).
Despite the slight uptick this month, West Virginia’s economy remains weak. As we discussed in a prior Commentary, the employment markets in West Virginia and other Appalachian States (except Kentucky) have been weak.
Connecticut and New Jersey provide interesting contrast
The Geo Score measures a snapshot of relative economic strength. In addition to examining current economic strength, it is important to look at the direction of a State’s economy.
The chart below compares the current Geo Score (X-axis) to the change in the Geo Score (Y-axis) over the last year. This divides the States into 4 groupings: above average/trending better (top right), above average/trending worse (bottom right), below average/trending better (upper left), and below average trending worse (bottom left).
The health of the economies of Connecticut and New Jersey presents an interesting contrast. Both States have geographic areas, because of their proximity to New York City, that are tightly linked to the health of the New York City economy (Connecticut discussed here), and, as such, are economically strong. Each has areas further from New York City with local industries that have been in long-term decline: Connecticut insurance and New Jersey casino gambling. (In the case of Connecticut, the manufacturing industry in the City of Bridgeport has also been in long decline. It is a testament to the strength of the New York City suburbs that Fairfield County is one of the strongest counties in the country despite the location of Bridgeport within its borders.)
Despite these similarities, the relative strength of the economies of the two States has been on diverging over the last year: Connecticut improving and New Jersey worsening.
The economic ranking of the two States tracked closely from January ’12 to August ’14, but have gone in opposite directions since.
All of Connecticut’s six counties have shown improvement in the last year.
In New Jersey, all regions have shown deterioration.
For more charts and analysis, sign up for a DIVER Analytics Trial.
The decline in Atlantic County (home to Atlantic City) has been especially pronounced.
Revisions to Puerto Rico GDB-EAI show better economy
Last week, the Puerto Rico Government Development Bank released its monthly Economic Activity Index (“EAI”) for May ‘15. This index is intended to provide a monthly data set to assist stakeholders in measuring the monthly performance of the Commonwealth’s economy.
In March, the GDB announced revisions to the calculation of EAI that it said are intended to “reduce volatility” and “improve the seasonal adjustment method.” The GDB is currently providing data on both the “old” and the “new” EAI. After June’s data, only the “new” EAI will be published.
Based on the May data, the new EAI has “reduced volatility”, and has also changed negative growth into positive. The year over year change in the old EAI was -0.8%, while the change in the new EAI was +0.2%. Skeptics might ask how changing seasonality has such a dramatic impact on year over year values (and might also ponder that the direction of the change is positive by +1.0% for the Commonwealth).
Have a great week,
Michael Craft, CFA
For more charts and analysis, sign up for a DIVER Analytics Trial.
CLICK HERE to Subscribe to the Weekly Commentary
For more information, please contact: inquiries@lumesis.com
Learn more about Lumesis
Learn more about DIVER Solutions
New DIVER Geo Scores; A Comparison of Connecticut and New Jersey
July 6, 2015
This week we review our proprietary DIVER Geo Score, highlight the strongest and weakest States as well as provide you a link to get the scores themselves. We compare the health of the economies of Connecticut and New Jersey and update our charts of the Puerto Rico GDB-EAI to reflect newly published data.
June Geo Scores
Last week, we released the most recent DIVER Geo Scores for States, counties and cities. The DIVER Geo Score represents a relative score of the economic health of a U.S. State, county or city. Based on a scale of 0-10, with 10 being the best, this data is updated monthly and is calculated from multiple economic and demographic factors related to three primary data categories—employment, income and housing.
The DIVER Geo Scores are available here.
The most notable change for the month in the Top 10 Strongest ranking is that Connecticut replaced Virginia in the tally. After lagging for several years, Connecticut has been improving since June ’14. Virginia’s Geo Score has been declining since its peak in May ’12.
There were no changes in the composition of the Bottom 10 for the month, but a few shifts in rankings (New Mexico and Tennessee down; and West Virginia and Nevada up).
Despite the slight uptick this month, West Virginia’s economy remains weak. As we discussed in a prior Commentary, the employment markets in West Virginia and other Appalachian States (except Kentucky) have been weak.
Connecticut and New Jersey provide interesting contrast
The Geo Score measures a snapshot of relative economic strength. In addition to examining current economic strength, it is important to look at the direction of a State’s economy.
The chart below compares the current Geo Score (X-axis) to the change in the Geo Score (Y-axis) over the last year. This divides the States into 4 groupings: above average/trending better (top right), above average/trending worse (bottom right), below average/trending better (upper left), and below average trending worse (bottom left).
The health of the economies of Connecticut and New Jersey presents an interesting contrast. Both States have geographic areas, because of their proximity to New York City, that are tightly linked to the health of the New York City economy (Connecticut discussed here), and, as such, are economically strong. Each has areas further from New York City with local industries that have been in long-term decline: Connecticut insurance and New Jersey casino gambling. (In the case of Connecticut, the manufacturing industry in the City of Bridgeport has also been in long decline. It is a testament to the strength of the New York City suburbs that Fairfield County is one of the strongest counties in the country despite the location of Bridgeport within its borders.)
Despite these similarities, the relative strength of the economies of the two States has been on diverging over the last year: Connecticut improving and New Jersey worsening.
The economic ranking of the two States tracked closely from January ’12 to August ’14, but have gone in opposite directions since.
All of Connecticut’s six counties have shown improvement in the last year.
In New Jersey, all regions have shown deterioration.
For more charts and analysis, sign up for a DIVER Analytics Trial.
The decline in Atlantic County (home to Atlantic City) has been especially pronounced.
Revisions to Puerto Rico GDB-EAI show better economy
Last week, the Puerto Rico Government Development Bank released its monthly Economic Activity Index (“EAI”) for May ‘15. This index is intended to provide a monthly data set to assist stakeholders in measuring the monthly performance of the Commonwealth’s economy.
In March, the GDB announced revisions to the calculation of EAI that it said are intended to “reduce volatility” and “improve the seasonal adjustment method.” The GDB is currently providing data on both the “old” and the “new” EAI. After June’s data, only the “new” EAI will be published.
Based on the May data, the new EAI has “reduced volatility”, and has also changed negative growth into positive. The year over year change in the old EAI was -0.8%, while the change in the new EAI was +0.2%. Skeptics might ask how changing seasonality has such a dramatic impact on year over year values (and might also ponder that the direction of the change is positive by +1.0% for the Commonwealth).
Have a great week,
Michael Craft, CFA
For more charts and analysis, sign up for a DIVER Analytics Trial.
CLICK HERE to Subscribe to the Weekly Commentary
For more information, please contact: inquiries@lumesis.com
Learn more about Lumesis
Learn more about DIVER Solutions