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John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP At Last, Inland Empire Economic Growth... Will it Take Off?

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Presentation on theme: "John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP At Last, Inland Empire Economic Growth... Will it Take Off?"— Presentation transcript:

1 John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP At Last, Inland Empire Economic Growth... Will it Take Off?

2 After Losing 8.74 Million Jobs … U.S. Job Creation Is Crawling Back

3 V Pattern of Likely Recovery U x x

4 Congressional Madness

5 U.S. Economy??? Sequester Debt Limit

6 California Wage & Salary Employment Back to Mid-1999 Level Every Wage & Salary Job Created In California In This Decade Has been Lost: Not A State Priority

7 Worst National Unemployment Rate Unadjusted Rates: U.S. 7.4% CA 9.6%

8 There is Some Good News Locally

9 IE Up 16,106 Jobs in 2012 thru November 16,300 was Husing Forecast for , %

10 Sectors Creating/Losing Jobs 3,782 1,545 1, (9) (55) (473) (773) Employment Agcy Eating & Drinking Accommodation Social Assistance Amusement Agriculture Utilities Mining Higher Education Publish, telecomm, Other 4,691 1,127 (464) Distribution & Transportation Manufacturing Construction Other Services Retail Trade 1,100 (673) Mgmt & Professions Local Government Federal & State (1,473) 5,164 3,055 (518) (2,609) Admin. Support Health Care Financial Activities K-12 Education Source: California Employment Development Department Exhibit 8.-Inland Empire Growing & Declining Sectors Average January-November Lower Paying Modest Paying White Collar Blue Collar Good Paying

11 The Great Challenge

12 Construction Share of Lost Jobs 57.3% 130,200 74,600 Total Job Decline Construction Job DeclineConstruction Share of Lost Jobs Source: CA Employment Development Department Construction Share Of Lost Jobs Inland Empire,

13 500,000 People In SB County Underwater homes

14 2012 $0 $30,000 $60,000 $90,000 $120,000 $150,000 $180,000 $210,000 $240,000 $270,000 $300,000 $330,000 $360,000 $390,000 $420,000 $450,000 NewExisting Source: Dataquick & Economics & Politics, Inc. Exhibit 5.-Price Trends, New & Existing Homes Inland Empire, , Quarterly $187,825 $437,200 $389,924 $295,442 $155,319 Existing Home Prices Slight Upward Move $107, % -51.8%

15 Inland Empire’s Long Term Price Competitive Advantage Still Exists $155,000 $187,000 $324,000 $197,000 $352,000 $384,000 $521,000 Inland EmpireLos AngelesSan DiegoOrange Median All Home PriceInland Empire Advantage Source: Dataquick Exhibit 20.-Home Price Advantage, Inland Empire & So. California Median Priced New & Existing Home, 3rd Quarter 2012

16 Gap To Coastal Markets Getting Larger YTD $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 Los AngelesOrangeSan Diego Source: Dataquick Exhibit 27.-Gap Between Coastal & Inland County Prices Existing & New Homes,

17 Should Be Record Inland Housing Affordability Should Be Stimulating Demand

18 Skeptical But Consumers Are Again Skeptical About The Near Term Future = Normal

19 Home Sales Volume Down Slightly

20 Investor Pre-Market Buying % 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Source: Foreclosureradar.com Exhibit 10.-Direct Investor Purchase of Foreclosure Sales Inland Empire,

21 Investor Purchases By SB Co. Area 46.4% 44.7% 37.8% 31.5% 31.2% 23.4% 13.1% 30.6% 14.7% 13.1% 11.9% 9.3% San Bdno Co. Unincorp.Morongo BasinVictor ValleySB CountyEast ValleyWestend Source: Dataquick Exhibit 11.-Home Purchases By Absentee Owners San Bernardino County, Second Quarter 2007 v. 2012

22 Single Family Rentals & Police Calls

23 How This Ends: A Housing Shortage 106, per new person During 2008 thru 2012 California Population Grew by 993,624

24 When Underwater Homes Solved Sep-131.7% Mar-145.1% Mar % Apr % Apr % Jan % Jul % Nov % Feb % Mar % Mar %

25 Assessed Valuation Finally Growing

26 Assessed Valuation, Slow Rise -8.1%

27 Construction Permits At An Historic Low !

28 Construction Jobs: At the Bottom

29 Gold Mine Theory Primary Tier Secondary Tier Construction: Blue Collar Health Care: White Collar Logistics: Blue Collar Manufacturing: Blue Collar

30 Adult Educational Levels 31.4% Rest of So. CA

31 Health Care Jobs 100 3,

32 Inland Empire Underserved by Health Care Workers Inland EmpireCalifornia Source: CA Employment Development Department Exhibit 10.-Number of People Per Health Care Worker Inland Empire & California, % More People Per Health Care Worker

33 Who Will Health Care Workers Serve?

34 Inland Empire is Under-Officed Inland EmpireL.A. CountySan Diego Co. Per Person Per Job Sources: Grubb & Ellis, CA Employment Development Dept., CA Dept. of Finance Office Space Per Capita & Per Local Job Southern California Areas, 2010

35 Office Occupations: Strong Growth Has Stopped

36 Logistics Flow of Goods

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39 Imported Container Volume Returning -25.4% +19.2%

40 Record Export Container Volume All Time Record

41 Inland Empire Logistics Jobs

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43 Manufacturing Activity: Slowing

44 Manufacturing Jobs In Neutral

45 Gold Mine Theory Primary Tier Secondary Tier

46 Inland Empire’s In-migration From Coastal Counties Has Stopped -15,538 Not Bringing Skills, Wealth, Income & Spending

47 Retail Sales, San Bernardino County -$3.7 Billion -6.0%

48 Retail Jobs Have Faltered

49 California Grabbing Money From Local Government … School Funding Cut Jerry Brown’s Hand

50 Government Jobs

51 2012 Better than 2011 Foreclosures A Continuing Issue Complete Recovery ?? 2012 Jobs Growing As Expected 2013 Better Than 2012 IF Federal Issues Solved

52


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