1. John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Economic Growth... Building An Expansion

2. After Losing 8.71 Million Jobs … U.S. Jobs Almost All The Way Back -614,000 Government Jobs +10,077,000 Private Sector (115.7%)

3. U.S. & CA Unemployment History Cold War Ends Great Recession Prime Rate: 21%

5. California Job Gains/Losses 2008-2010 -1,066,400 Defense Cutbacks Dot.Com Great Recession 2011-2014 +1,315,558 2014 Up +249,158 Recovery

6. Highest Unemployment Rates U.S. Metro Areas

7. Unemployment Falling, But High

8. Inland Empire

9. Primary Tier Secondary Tier Economic Development … Increase The Economic Base! How Regional Economies Work

10. Three Step Growth Process Based On Interaction Of: Population Preferences Dirt Prices Force Decisions

11. Southern California Population Growth, 2000-2013

12. People Prefer To Live Near The Coast

13. As a homeowner, would you prefer to move closer to work if it involved a townhouse or condo? (I-15 & Sr-91 Commuters, 2008) 72.3% No Same question to Renters: 87.5% No Answer stable over 5 years

14. Importance of Blue Collar Sectors

15. People forced to move inland for affordable homes Population Serving Jobs Only High Desert & I-215 South are current examples Stage #1: Rapid Population Growth

16. Commuting Bad, But Stable Over Time 1,650,384Total Jobs 1,156,313Inside IE 494,071Commute Outside County 154,845Between IE Counties 339,226Outside IE 20.6%Commute Outside the IE 16.3%Orange County Commuters

17. Construction & Real Estate: Finally Some Hope

18. Share of Underwater Homes Plunging

19. Direct Investor Purchases of Foreclosures

20. Notices of Default At Low Levels

21. Home Price Trends 71.3% 39.8% 40.9% Above Existing Home -34.7% 2014,

22. Long Term Competitive Price Advantage Still Exists

23. Inland Affordability Still Strong

24. Mortgage Credit Easing A little Credit standards on mortgage loans that your bank categorizes as prime residential mortgages have:

25. Volume Stagnant

26. Inland Empire’s In-migration From Coastal Counties Has Not Yet Recovered -27,324 Not Bringing Skills, Wealth, Income & Spending

27. Why Low Volume Less Foreclosures Buyers Want or Need High Prices Continued Wall Street Acquisition of Large Share of Foreclosures Credit Hurt By Foreclosures Higher FICO Scores FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000 Fear

28. Permits: Finally A Little Hope

29. Construction & Mining Job Growth

30. Assessed Valuation Finally Growing (6.2% for SB County) 6.3% Inflation

31. Firms Prefers The Coastal Counties

32. Stage 2: Strong Industrial Growth

33. Industrial Construction

34. Logistics Flow of Goods

35. Port Container Volumes

36. Fulfillment Centers

37. E-Commerce Growth Rates Year Over Year by Quarter

38. Logistics Job Growth 18.8% of All Inland Jobs in 2013 15.5% So Far in 2014

39. Manufacturing: Could Be A Major Growth Source

40. California Just 1.1% of U.S. Manufacturing Job Growth

41. Manufacturing Non-Job Growth!

42. Health Care

43. Inland Empire Underserved

44. Meeting Standards of Care

45. Public Health Factor Rankings of 58 Counties, 2014 45 th 38 th

46. Health Care Demand Set To Explode People Without Health Insurance (2012) 828,431 (19%) People Will Age, Already Those 55 & Over 926,696 (21%) Population Growth Will Resume (2000-2013) 1,075,807 (33%) Inland Health Care Workers Handle More People Than CA (28%)

47. Health Care Job Growth … Modest!

48. Stage 3.-Office Based Firms Follow Their Workers

49. Skilled Workers Skilled Workers Migrate Inland For Better Homes

50. Higher End Homes $560,458 $418,634 $479,341 6 UPLAND EASTVALE $475,498 $473,351 $435,873 CORONA $443,870 TEMECULA $350,479$397,927 $347,075 $329,924 Loma Linda

51. Office Absorption Finally Starting to Recover High-End Jobs Follow Workers into the Area

52. Office Vacancy Rates Improving But Still Very High 17.9% 24.0%

53. Office Based Job Growth

54. Primary Tier Secondary Tier How Regional Economies Work

55. 2014 Retail Sales Head For 6.6% Above Pre-Recession Peak 15.2% Inflation

56. Job Growth: Population Serving & Lower Paying

57. Where Will IE Be In Its Job History? 2011-2013 81,733 of 143,108 lost or 57.1% 2011-2014 121,833 of 143,108 lost or 85.1% 21,275 Jobs To Go 33,839

58. Job Growth By Market Area, July YTD

59. Forecast: Review 2014 Better Than 2013 Construction Returning Logistics Strong Manufacturing Weak Health Care Set To Take-Off Office Sectors Modest Pop. Related Group Gaining Govt & Education Crawling Unemployment Drops to 8.5% Growth Looking Normal 21,802 Jobs Below Pre-Recession

60. www.johnhusing.com