Transcript Document

Inland Empire Economic Growth . . .
Building An Expansion
John Husing, Ph.D.
Economics & Politics, Inc.
Chief Economist, IEEP
After Losing 8.71 Million Jobs …
U.S. Jobs All The Way Back & More
Petroleum Prices
Value of the Dollar
Consumer Confidence
California Job Gains/Losses
2008-2010
-1,066,400
2011-2014
+1,301,708
2014 Up
+235,308
+1.6%
Recovery
Defense
Cutbacks
Dot.Com
Great
Recession
California & U.S. Unemployment Rates
Highest Unemployment Rates
Major U.S. Metro Areas
Where Is the IE In Its Job History?
2011-2014
131,976 of 143,108 lost or 92.2%
11,132 Jobs To Go
How Regional Economies Work
Secondary Tier
Economic Development … Increase The Economic Base!
Primary Tier
Poverty Rates, 2013
Children Under 18
All People
High School or Less
BA or Higher
Construction & Real Estate:
Real Hope
Share of Underwater Homes Plunging
Notices of Default At Low Levels
(859 in December 2014)
Home Price Trends
2014,
71.0%
38.4% Above
Existing Home
-31.0%
Long Term Competitive
Price Advantage Still Exists
Affordability to
Median Income Household
Inland Empire
L.A./SD
Orange.
Home Sales Volume Stagnant
Mortgage Credit Easing Very Little
Credit standards on mortgage loans that your bank categorizes as prime residential
mortgages have (October 2015):
All Respondents
Banks
Large Banks
Percent
Banks
Other Banks
Percent
Banks
Percent
Tightened considerably
0
0
0
0
0
0
Tightened somewhat
2
2.8
0
0
2
5.6
Remained basically unchanged
60
83.3
27
75
33
91.7
Eased somewhat
10
13.9
9
25
1
2.8
0
0
0
0
0
0
72
100
36
100
36
100
Eased considerably
Total
Permits: Just A Little Hope
Why Low Volume
•Less Foreclosures
•Buyers Want or Need High Prices
•Credit Hurt By Foreclosures
•Higher FICO Scores
•FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000
•Fear
•Coming Help
• FHA Lowering PMI rates on conforming loans 1.35% to 0.85%
• Interest Rates Remaining Low
• FICO Scores Easing A Little
Jobs Lost 2007-2011: -68,433
Job Gain 2012-2014: 13,286
Job Deficit:
-55,147
1,825
Why Home Construction’s
Return Is Important
Inland Empire’s In-migration From Coastal
Counties Has Not Recovered
-25,278
Not Bringing Skills, Wealth, Income & Spending
SB County Assessed Valuation Growth
Assessed Valuation Growing Again
Up from peak:
Inflation:
4.2%
10.2%
Construction & Mining Job Growth
Median Pay $51,923
Strong Industrial Growth
Industrial Construction
Logistics Flow of Goods
Port Container Volumes
Port Issues & Trade Diversion Potential
• Labor Difficulties Over Technology (PMA v. ILWU)
• Truck Chassises
• Teamsters & Independent Owner Operators
• Panama Canal
• Rising Value of the Dollar
Fulfillment Centers
E-Commerce Growth Rates
Year Over Year by Quarter
Logistics Job Growth
& Why It Is Important
18.8% of All Inland Jobs in 2013
15.5% in 2014
Median Pay $43,911
CARB: Diesel Pollution Is Disappearing
Exhibit 6.-PM 2.5 Days over National Standard vs.
Total Square Feet of Net Industrial Absorption Since Highest PM2.5 level
Monitoring Sites
Mira Loma-Van
Buren
RiversideMagnolia
RiversideRubidoux
2001
Fontana-Arrow
Highway
Ontario-1408
Francis Street
San Bernardino4th Street
120.2
58.2
79.5
80.8
2002
88.4
92.6
73.7
67.4
88.9
2003
69.7
78.1
54.3
62.2
55.2
47.8
57.3
2004
*
2005
*
*
2006
46.2
2007
43.4
2008
39.7
31.3
*
*
*
*
22.9
*
27.2
*
*
*
25.3
9.3
*
*
*
*
12.4
15.0
19.3
19.4
9.5
2009
19.0
6.0
15.1
6.2
9.0
6.2
2010
8.0
6.3
4.0
6.6
3.2
5.9
2011
13.0
7.1
5.0
7.1
6.8
2012
7.0
7.0
10.6
0.0
0.0
2013
Change From
Highest
9.2
3.0
6.2
3.0
0.0
3.3
-37.0
-85.4
-114.0
-70.7
-79.5
-85.6
-80.1%
-96.6%
-94.8%
-95.9%
-100.0%
-96.3%
101,204,114
198,737,217
244,793,404
198,737,217
244,793,404
198,737,217
Change
Net Absorptiont
Since Highest
*
*
Manufacturing:
Could Be A Major Growth Source
U.S. Manufacturing Job Growth
7-Times Faster Than California
Manufacturing Non-Job Growth!
Median Pay $48,923
Causes of Public Health Difficulties
1. Socio-Economics
40%
2. Population’s Health Behaviors
30%
3. Access to Medical Care
20%
4. Environmental
10%
90%
Source: Different Perspectives For Assigning Weights To Determinants of
Health, University of Wisconsin, Public Health Institute, 2010
What is Needed To Attack Poverty?
•Short Course Adult Training in Specific Skills
1. Business Determined Sectors
2. Business Established Certifications & Speed of Training
3. Business Willingness to Give Hiring Preference
•Sectors With Few Education Barriers to Entry
• Median Incomes Approaching Middle Class Earnings
• Skill Ladders Up Which Workers Can Move To Median Incomes
• Sectors That Are Adding Jobs
Median Incomes Near To Middle Class Needs,
Minimum Entry Level Requirements
Middle Class Earnings,
Minimum Skills To Enter
Issue
Fundamentally: Blue Collar Sector Growth Needed To Allow
Marginally Educated To Access the Middle Class
• Manufacturing
• Logistics
• Construction
• Mining, Oil & Gas
Training Needed To Allow Advancement In These Fields
EPA-AQMD Standards Eliminating Ability of these Sectors to
Grow
Poverty is Exacerbated as a Result!
Health Care
People Per Health Care Worker
28.9%
Inland Empire Underserved
Health Care Demand Set To Explode
Inland Health Care Workers Handle More People Than CA (28%)
People Without Health Insurance (2013)
836,689 (19.7, 19.0%)
People Will Age, Already 55 & Over
962,260 (23.3%, 20.5%)
Population Growth Will Resume (2000-2013)
734,580 (47.5%)
375,530 (22.0%)
Difficulty: Infrastructure of Training Para-Professionals
ACS Enrollment Statistics: Inland Empire
Oct. 1, 2013 through Mar.31, 2014
California
173,609
Non-Subsidized
Inland Empire
12,428
Subsidy Eligible
1,222,320
110,543
Total
1,395,929
122,971
Source: Covered California
www.coveredca.com
Inland Empire represents 8.8%
of CA enrollment
123,000 Website
300,000 MediCal
423,000
Total
Health Care Job Growth … Modest!
Median Pay $55,475
Skilled Workers Migrate Inland
For Better Homes
Higher End Homes
UPLAND
$484,914
$465,778
Loma Linda
Claremont
$568,700
$427,095
$585,199 EASTVALE
$468,269
$459,000
CORONA
$429,667
$344,095
TEMECULA
$393,603
Migration of Educated Workers
Office Absorption Follows Higher-End Workers
High-End Jobs
Follow Workers
into the Area
Office Vacancy Rates Improving
But Still Very High
24.0%
17.0%
Office Based Job Growth
High Income
Private Sector Office Jobs
How Regional Economies Work
Secondary Tier
Primary Tier
2014 Retail Sales Head For 6.1%
Above Pre-Recession Peak
15.2%
Inflation
Job Growth:
Population Serving Jobs
Where Is the IE In Its Job History?
2011-2014
131,976 of 143,108 lost or 92.2%
11,132 Jobs To Go
Job Growth By Market Area, June 2013-2014
Forecast: Review
2015 Better Than 2014
•Construction Returning
•Logistics Strong
•Manufacturing Weak
•Health Care Set To Take-Off
•Office Sectors Modest
•Pop. Related Group Gaining
•Education Growing
•Government Crawling
•Unemployment Drops to 7.9%
•Growth Looking Normal
•11,132 Jobs Below Pre-Recession
www.johnhusing.com