Trade Response to Global Downturns Marney Cox Chief Economist SANDAG March 2010 Marney Cox Chief Economist SANDAG March 2010
US Trade Growth Outpacing GDP (Cumulative Growth Rate current $)
3 Global Recession’s Impact on Trade (findings from World Bank Report, August 2009) Elasticity of Trade Value to GDP is near 4.0 Trade values fall more than volumes Mean recovery time to previous peak 4 years Impacts vary across industries Least severe: consumer products—food and beverages Most severe: durable commodities—iron and steel Following crisis deficit or surplus conditions return
US GDP-Measuring the Decline (Index Q-O-Q Change from start of recession) Start of Recession Quarters
US Real Exports-Measuring the Impact (Index Q-O-Q Change from start of recession) Start of Recession Quarters
US Real Imports-Measuring the Impact (Index Q-O-Q Change from start of recession) Start of Recession Quarters
What’s Ahead?
US Continues to Shed Jobs (Index M-O-M Change from start of recession ) Start of Recession Months
US Household Credit Debt Outstanding (Billions $)
US Savings Rate Rising (Monthly, SAAR)
Shape of Recovery & Role of Trade V, U, W…Nike swoosh…gradual & slow Orthodox view…trade recovery is slow Value of trade falls more than volume Commodity and asset prices under pressure Majority of trade is intermediate goods Falling prices can increase trade volume
12 SD Economic Opportunity is Knocking at California’s Southern Door Mexico is CA largest export market Otay Mesa is CA/MX busiest trade border crossing 1.5 million trucks per year $36B in trade 95% of regional freight movement is carried by truck
SD Value of Trade Has Nearly Tripled (San Diego Customs District, $Millions)
SD Trade Growth Outpacing GRP (Cumulative Growth Rate current $)
SD Otay Mesa Commercial POE Current ”Congested” Conditions 4.36 million working hours of delay annually
$1,256 $2,069 SD Border Delays Reduce Trade…and (Delay range: autos 45 min.-2hrs. Trucks 2hrs.-6hrs.) $0 $4,000 $8,000 $12,000 $16,000 Exports to MexicoImports from Mexico $9,382 $13,793 Output (in millions) Lost Export Opportunities = 13% Lost Import Opportunities = 15%
…Economic Growth (Border Delay Annual Impact to United States & Mexico) 73,900 JOBS LOST = $8.63 Billion in OUTPUT LOST = 23 Super Bowls 4 ½ Google Companies
SD SR11 Project Study Area
SD SR11 Project Progress » Toll Legislation Approved – SB 1486 (Ducheny) » U.S. Presidential Permit Approved » Exchange of Diplomatic Notes with Mexico » Tier I Program EIS/EIR Approved » Scoping Document: Project Study Report » Transportation Border Congestion Relief Program (TBCRP) Designation
Programmed Funding Available: State (STIP)Tier II Env./Eng.$13.0 M Federal (SAFETEA-LU)Tier II Env./Eng.$.8 M State (Prop. 1B TCIF)Construction$75.0 M Total $88.8 M Remaining Funds Needed: (Toll Funds/Other): $ M SD SR11 Estimated Project Budget: $615-$715 Million
Develop Financial Strategy2009 Tier II Environmental Doc.2010 Design/Right of Way2011 Begin Construction Open New Trade Gateway SD SR11 Project Schedule
Trade Response to Global Downturns Marney Cox Chief Economist SANDAG March 2010 Marney Cox Chief Economist SANDAG March 2010