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

2. After Losing 8.71 Million Jobs … U.S. Jobs Almost All The Way Back
-589,000 Government Jobs
+9,938,000 Private Sector (114.1%)

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

5. California Job Gains/Losses
-1,066,400
+1,320,415
2014 Up
+254,015
Recovery
Dot.Com
Defense
Cutbacks
Great
Recession

6. Highest Unemployment Rates U.S. Metro Areas

7. Unemployment Falling, But High

8. Inland Empire

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

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

11. Southern California Population Growth, 2000-2012

12. People Prefer To Live Near The Coast

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

14. Importance of Blue Collar Sectors

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

16. Commuting Bad, But Stable Over Time
1,650,384
Total Jobs
1,156,313
Inside IE
494,071
Commute Outside County
154,845
Between IE Counties
339,226
Outside 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
2014
39.8%
71.3%
40.9% Above Existing Home
-34.7%

22. Long Term Competitive Price Advantage Still Exists

24. Mortgage Credit Easing A little
A. Credit standards on mortgage loans that your bank categorizes as prime residential mortgages have:
All Respondents
Large Banks
Other Banks
Banks
Percent
Tightened considerably 2
2.8% 1
2.9 %
Tightened somewhat
0.0%
5.7%
Remained basically unchanged 50
70.4% 21
58.3% 29
82.9%
Eased somewhat 17
23.9% 14
38.9% 3
8.6%
Eased considerably
Total 71
100.0% 36
100.0 % 35

25. Volume Stagnant

26. Not Bringing Skills, Wealth, Income & Spending
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 (6.1% for SB County)
6.3%
Inflation

31. Firms Prefer 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. Job Growth: Logistics
18.8% of All Inland Jobs …
During 2013

39. Manufacturing: Could Be A Major Growth Source

40. U.S. v. California Manufacturing Jobs

41. Job Growth: Manufacturing

42. Health Care

43. Inland Empire Underserved

44. Meeting Standards of Care

45. Public Health Factor Rankings of 58 Counties, 2014

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

47. Job Growth: Health Care

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

49. Skilled Workers Migrate Inland For Better Homes

50. Higher End Homes UPLAND $479,3416 $473,351 Loma Linda $347,075
$329,924
$418,634
$560,458
EASTVALE
$475,498
$435,873
CORONA
$443,870
TEMECULA
$350,479
$397,927

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

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

53. Growth: Office Based Jobs

54. How Regional Economies Work
Secondary Tier
Primary Tier

55. Retail Sales Almost Back
13.7%
Inflation

56. Job Growth: Population Serving & Lower Paying

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

58. 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