Transcript Slide 1

Fairfax Committee of 100
The Northern Virginia and
Washington Area Regional
Economic Outlook
David E. Versel, AICP
Senior Research Associate
Center for Regional Analysis
George Mason University
February 24, 2015
The national recovery
has been slow and fragile,
but is pointing in the
right direction
Recession Recovery Patterns of GDP
Past Four Recessions
30
% Change in GDP*
25
20
1982-Q3
1991-Q1
2001-Q4
2009-Q2
15
10
5
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
*in 1992 or 2009 Chained Dollars
Quarters After Trough
Sources: Bureau of Economic Analysis, GMU Center for Regional Analysis
Annual Change in Payroll Jobs – US
Month-Over-Year
(000s)
4000
2000
0
-2000
-4000
-6000
-8000
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Dec =
+ 3.0M
U.S. Payroll Job Change by Sector
Dec 2013 – Dec 2014
Ranked by Size in 2014
Educ & Health Svcs
Prof. & Bus. Svcs
State & Local Govt
Retail Trade
Leisure & Hosp.
Manufacturing
Financial
Construction
Wlse Trade
Other Services
Transp. & Util.
Federal Govt.
Information
-600
Total = 2,951
(000s)
482
732
108
250
421
186
121
339
111
58
146
-17
15
-400
-200
0
200
400
Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis
600
800
Initial Claims for Unemployment
(000s)
4-Week Moving Average
700
650
600
550
500
450
400
350
Jan 24
265
300
250
200
Source: Department of Labor
U.S. Unemployment Rate
%
11
10
9
8
7
6
5
4
Dec = 5.6
IHS FCST
14 – 6.2
15 – 5.5
16 – 5.3
17 – 5.2
18 – 5.3
19 – 5.3
Source: Bureau of Labor Statistics (Seasonally Adjusted), IHS Economics January 8, 2015
The recession and Federal
spending cutbacks have
dramatically reshaped
the regional economy
WMSA Payroll Job Change: Private Sector
The Great Recession and Recovery
Aug 2008-Feb 2010
(000s)
Total -178
Prof. & Bus. Svcs
Feb 2010-Dec 2014
Total 244
40
-23
Educ & Health Svcs
0
Retail Trade
50
-23
Leisure & Hosp.
44
-34
Construction
60
-48
22
Other Services
-8
Financial
12
-10
Information
10
-12
Manufacturing
-10
Wlse Trade
-7
Transp. & Util.
2
-4
-80
-60
-40
-20
4
0
20
40
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
60
80
The GRP* Effects of Job Change in the
Washington Metropolitan Area, Aug 08-Aug 14
(in billions of current year $s)
_____________________________
Job Change Average GRP Value
- 177,700
- $26,760,932,000
+ 231,100
+ $24,730,493,000
Net Effect + 53,400
- $2,030,439,000
____________________________
Source: GMU Center for Regional Analysis
*Gross Regional Product
Federal Government
Washington MSA
(000s) Annual Data
30
25
20
15
10
5
0
-5
-10
-15
-20
2009
Annual Month over Year
2010
2011
2012
2013
2014
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
2008
2005
2002
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Jul 2010 = 387,500
Dec 2014 = 366,800
Federal Procurement in the
Washington Metro Area, FY 1980-2014
$ Billions
90
80
TOTAL = $1,164.9 Billion
70
60
50
40
30
20
10
0
Source: US Census, Consolidated Federal Funds Report and USAspending.gov
79.8
76.3
69.1
71.2
Summary for Federal Spending Trends in the
Washington Metropolitan Area, 2010-2014
• Federal Procurement Outlays declined 16%
between FY 2010 and FY 2013.
• Federal employment has declined since
peaking in July 2010, losing 20,700 jobs or
5.3%.
• Federal payroll is declining and will continue to
decline as the workforce shrinks and older
workers retire and are replaced by younger
workers.
Professional & Business Services
Washington MSA
(000s) Annual Data
30
25
20
15
10
5
0
-5
-10
-15
-20
2009
Annual Month over Year
2010
2011
2012
2013
2014
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
2008
2005
2002
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Oct 2012 = 712,800
Dec 2014 = 704,800
Washington Metropolitan Area Job Change
by Wage Category between 2008 to 2013
Higher-Wage
Mid-Wage
Lower Wage
(000s) (60)
(40)
(20)
0
2008-2009
Sources: EMSI 2013.3 & GMU Center for Regional Analysis
20
40
2010-2013
60
80
The Washington area
economy has struggled
in the past two years,
particularly in
Northern Virginia
The Economic Performance of Maryland, DC
and the Commonwealth of Virginia in 2013
State GSP Growth 2012-2013 US Ranking
US
1.84%
Virginia
0.06%
48th
Maryland
0.01%
49th
DC*
- 0.49%
51st
WMSA
- 0.8%
330th**
_________________________________________________________________________
Source: U.S. Bureau of Economic Analysis
*DC’s economy also declined 0.46% in 2012.
**out of 381 metro areas
15 Largest Job Markets
Job Change: 2012 – 2013
(000s)
140
120
Washington + 30,300
100
80
60
40
20
0
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
15 Largest Job Markets
GRP Percent Change: 2012 – 2013
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
Source: Bureau of Economic Analysis, GMU Center for Regional Analysis
Washington -0.8%
(000s)
160
15 Largest Job Markets
Job Change: Dec 2013 – Dec 2014
Washington +20,800
140
120
100
80
60
40
20
0
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
15 Largest Job Markets
Job Change: Dec 2013 – Dec 2014
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Washington +0.7%
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Annual Job Change
Washington MSA, 2002-2014
(000s)
Annual Data
Annual Month over Year
100
2010
80
2011
2012
2013
60
40
20
0
-20
-40
-60
-80
2008
2005
2002
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
2014
Job Change by Sector
Dec 2013 – Dec 2014
Washington MSA
(000s)
Prof. & Bus. Svcs
Federal Govt.
Educ & Health Svcs
State & Local Govt
Retail Trade
Leisure & Hosp.
Construction
Other Services
Financial
Information
Manufacturing
Wlse Trade
Transp. & Util.
(20.0)
Total = 20,800
3
-2
0
6
4
8
4
1
3
-3
-2
1
-1
(10.0)
-
10.0
20.0
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
30.0
Annual Job Change
Northern Virginia, 2002-2014
(000s) Annual Data
60
2010
50
Annual Month over Year
2011
2012
2013
40
30
20
10
0
-10
-20
-30
2008
2005
2002
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
2014
Job Change by Sector
Dec 2013 – Dec 2014
Northern Virginia
(000s)
Prof. & Bus. Svcs
Federal Govt.
Educ & Health Svcs
State & Local Govt
Retail Trade
Leisure & Hosp.
Construction
Other Services
Financial
Information
Manufacturing
Wlse Trade
Transp. & Util.
(20.0)
Total 12,100
-3
-2
1
6
3
2
4
1
0
0
0
0
1
(10.0)
-
10.0
20.0
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
30.0
Unemployment Rates in the WMSA
By Sub-State Area, 2007-2014
12
10
8
7.2 – DC
5.6 – U.S.
6
4.6 – SMD
4
4.5 – MSA
3.7 - NVA
2
0
Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US – Seasonally Adjusted)
%
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
15 Largest Job Markets
Ranked by Unemployment Rate
Dec 2014
US
5.6
Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US – Seasonally Adjusted)
The regional housing
market is struggling
but could be worse
Percent Change in
Inventories of Existing Homes
Month-Over-Year 2000 – 2014, MSA
140
120
100
80
60
40
20
0
-20
-40
-60
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis. Total
monthly inventory includes listings active at the end of the month plus sales during the month.
Dec =
+16.4%
Existing Home Sales
Washington MSA
Through Dec 2014
14,000
12,000
10,000
12-Month Moving Average
8,000
6,000
4,000
2,000
0
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Total Listings Per Sale
Dec Each Year
25
20
PG
15
PW
10
DC
LDN
5
ARL
-
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
MONT
FFX
(000s)
Median House Sales Price
Washington MSA
500
450
400
350
300
250
200
150
100
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
$386.0K
Dec 2014
Average Sales Price Percent Change
Washington MSA
All Housing Types
%
30
Annual Change
2122
Annual Change by Month
2010
20
2011
2012
1413
10
10
7
66 6
4 54 54
6
22
89
14
10 1110 9
88 8 89
8
7
6
6
9
22 3134 12
1
66
33
2013
343
2014
7
45
9
5
5 4
2 2212
1
0
-1
-1
-10
-20
-4-5
-7
-10
-16
-30
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
Average Sales Price Percent Change
Northern Virginia
All Housing Types
%
30
Annual Change
2223
19
161716
20
10
1414
10
2011
2012
2013
2014
13
1211
10
10 9101010
9 9 1010
8
877 8
7
7
6
6
6
56 55 6
5
45
4
44
4
4
45 2
3
3
2
2
2
2
2
1
1 12
0
0
5
1
0
0
-1
-10
2010
Annual Change by Month
-2
-3
-6
-20
-23
-30
Source: Metropolitan Regional Information Systems (MRIS), GMU Center for Regional Analysis
-2
Growth will return slowly
and will look different
Oil Prices
$ per barrel
$/barrel
Forecast > > > > >
120
100
80
60
40
20
Source: IHS Economics January 8, 2015
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0
Consumer Prices
2001 - 2019
%
Forecast > > >
5
4
3
2
1
0
-1
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Source: Bureau of Labor Statistics, IHS Economics January 8, 2015
Interest Rates
2001 - 2019
Forecast > > >
8
7
6
30-Yr
5
10-Yr Treas
Fed
4
3
2
1
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Source: IHS Economics January 8, 2015
U.S. Economic Performance
%
20
Forecast > > > >
15
10
GDP
Non-Res: Structures
Bus. Inv.-Eq & Sfwr
Residential Fixed
State & Local
Federal
5
0
-5
-10
-15
-20
-25
Source: Bureau of Economic Analysis, IHS Economics January 8, 2015
U.S. Gross Domestic Product
Quarterly Change: 2007 – 2015
%
6
Forecast
4
2
0
-2
-4
-6
-8
-10
2007
2008
2009
2010
2011
2012
2013
Source: Bureau of Economic Analysis, IHS Economics January 8, 2015
2014
2015
2010 Structure of the
Greater Washington Economy
Non-Local
Business
12.0 %
Other Federal
10.7 %
Fed Wages & Salaries
10.0%
Total
Federal
39.8%
Local Serving
Activities
34.8%
Source: GMU Center for Regional Analysis
Procurement
19.1%
2019 Structure of the
Greater Washington Economy
Non-Local
Business
17.6%
Other Federal
8.4%
Fed Wages & Salaries
7.3%
Total
Federal
28.8%
Local Serving
Activities
38.2%
Source: GMU Center for Regional Analysis
Procurement
13.1%
Washington Metropolitan Area and
U.S. Economic Growth
2012-2019
(annual percent real change)
Year
2013
2014
2015
2016
2017
2018
2019
U.S.
2.2
2.4
3.1
2.7
2.7
2.4
2.8
WMSA
- 0.8
0.7
1.4
1.9
2.4
2.9
3.2
Sources: IHS Economics, Inc. January 2015 ; GMU Center for Regional Analysis
U.S. GDP and Washington Area GRP
2007 – 2015 – 2019
%
(Annual % Change)
4
U.S.
2
0
Washington
-2
-4
Source: IHS Economics, GMU Center for Regional Analysis, Forecast: January 2015
Principal Sources of Job and GRP
Growth in the Washington Area, 2014-2019
(in thousands)
Growth
Job
Sectors
Change
Prof. & Bus. Ser.
114.4
Construction
48.8
Education/Health
28.7
Hospitality Services
27.1
State and Local
20.2
Sub-Total
239.2
Overall Total
236.9
% of Total
Job Change
48.3
20.5
12.1
11.4
8.5
100.8
100.0
Sources: IHS Global Insight; GMU Center for Regional Analysis
Average Value
Added per Job*
$157,969
$111,992
$72,162
$51,110
$81,736
$119,749
$154,131
*in 2014$s
Job and GRP Gains and Losses for
the Washington Area’s Other Sectors, 2014-2019
(in thousands)
Federal Gov’t
Retail Trade
Other Services
Financial Services
Information Services
Manufacturing
Transportation
Wholesale Trade
Sub-Totals
Job
Change
- 22.3
0.5
2.6
- 0.1
2.0
0.0
8.8
6.2
- 2.3
Overall Total
236.9
% of Total
Job Change
- 9.4
0.2
1.1
0.0
0.9
0.0
3.7
2.6
- 0.9
100.0
Sources: IHS Economics, Inc.; GMU Center for Regional Analysis
Average Value
Added per Job*
$185,804
$64,478
$86,150
$620,922
$410,371
$249,934
$203,015
$215,783
$197,811
$154,131
*in 2014 $s
Economic struggles
present an ongoing
challenge to local
budgets
Real Estate Property Taxes as Share
of Total General Fund Revenues,
FY2015 Budgets
70%
VA
DC
MD
65%
64%
60%
58%
60%
57%
56%
54%
50%
57%
59%
52%
40%
37%
30%
29%
25%
20%
10%
0%
DC
Alex
Arl
Ffx
Fauq
Loud
P.W.
Staff
Calv
Char
Fred
Mont
P.G.
Percent Change in Real Property
Assessments, 2009-2014
20%
VA
DC
15%
10%
MD
15%
15%
11%
7%
5%
0%
-6%
-5%
-10%
-10%
-10%
-13%
-15%
-16%
-17%
-18% -18%
-20%
-23%
-25%
DC
Alex
Arl
Ffx
Fauq
Loud
P.W.
Staff
Calv
Char
Fred
Mont
P.G.
Nonresidential Shares of Property
Tax Base, 2005 to 2014
2005
2009
2014
District of Columbia
Alexandria
Arlington
Fairfax
Fauquier
Loudoun
Prince William
Stafford
Calvert
Charles
Frederick
Montgomery
Prince George's
0%
10%
20%
30%
40%
50%
Percent Change in Nonresidential
Assessed Valuation by Property Type
2009-2014
Alexandria
Arlington
Fairfax
Loudoun
Montgomery
Prince George's
50%
40%
41%
42%
40%
30%
20%
25%
20%
19%
17%
10%
7%
0%
-8%
-10%
-2%
-10%
-20%
Multi-Family
Other Nonresidential
8%
SUMMARY:
•
The national recovery has been slow and fragile, but
is pointing in the right direction
•
The recession and Federal spending cutbacks have
dramatically reshaped the regional economy
•
The Washington area economy has struggled in the
past two years, particularly in NoVa
•
The regional housing market is struggling but could
be worse
•
Growth will return slowly and will look different
•
Economic struggles present an ongoing challenge to
local budgets
Three Key Challenges for
The Region’s Future
• Shortage/mismatch of labor for future jobs
• Limited supply of suitable housing for
migrating workers and newly formed
households
• Need to invest in regional infrastructure,
especially transportation
Thank You
Questions
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