Transcript Inland Empire & San Bernardino County 2009 … A Very

Southern California’s Economy
2012 … Finally Recovery Underway!
John Husing, Ph.D.
Economics & Politics, Inc.
After Losing 8.74 Million Jobs …
U.S. Job Creation Is Crawling Back
30% of Jobs Regained
Pattern of Likely Recovery
VU
So. California Job Growth/Destruction
Wa ge & Sa la ry Job Cre ation/ De struction
Inla nd Empire , 2007-2011
150,000
100,000
50,000
0
(50,000)
(100,000)
(150,000)
(200,000)
(250,000)
(300,000)
(350,000)
(400,000)
(450,000)
(500,000)
(550,000)
(600,000)
(650,000)
(700,000)
2007
2008
2009
2010
Source: CA Employment Development Department
2011
2012
Inland Empire Job Growth/Destruction
Wage & Salary Job Creation/Destruction
Inland Empire, 2007-2011
30,000
20,000
10,000
0
(10,000)
(20,000)
(30,000)
(40,000)
(50,000)
(60,000)
(70,000)
(80,000)
(90,000)
(100,000)
(110,000)
2007
2008
2009
2010
Source: CA Employment Development Department
2011
2012
Job Growth Comparison: November
Average Job Change, California Markets
California Markets, November, 2010-2011
75,000
26,600
19,500
13,100
12,600
1,800
San Diego Co. Inland Empire Orange Co. Los Angeles Co.Ventura Co.
Source: CA Employment Development Department
1,400
Imperial Co.
So. California
Still Tough Unemployment Rate
U.S.
Unadjusted
8.2%
There is Some Good News Locally
Industrial Vacancy Rate
Declining Again!
2005/2006
Inland Empire 2.7%
2009
11.9%
2011
6.8%
Orange Co.
5.4%
7.0%
5.3%
L.A. Co.
2.1%
3.4%
3.1%
San Diego
6.0%
12.0%
10.7%
500,000 sq. ft. + Facilities … Inland Empire Vacancy = 0.0%
Quarterly Industrial Absorption, 1991-2011
20 million Sq.Ft.
Change In Container Flows
Imported & Exported Container Volume, 2000-2011e
Ports of Los Angeles & Long Beach (mil. teus)
Import
8.2
Export
8.0
7.2
7.2
6.8
6.9
6.0
5.7
6.9
15.3%
6.0
5.0
4.8
2.7
1.6
1.6
1.6
1.7
1.8
2.1
3.1
2.8
3.1
3.3
2.3
-25.4%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Port Import Export Reporting Service (PIERS), collected from Vessel
2010
2011e
Fourth Highest Total Container Volume
2. Ports On West Coast Nearest Asia
Los Angeles
Long Beach
3. Deep Water Ports As Ships Draw Over
50 feet of Water
8,000-Container Post-Panamax Ships
Issue: Panama Canal Diversion
Suez
International Trade
Dollar Down: U.S. Goods Cheaper
112.2
-35.1%
2002 $1,500
2012 $2,027
84.0
2002 $180
2012 $117
72.8
Manufacturing
Manufacturing Orders:
Aggressive to Neutral to Growing
Export Container Volume
2011 YTD
6.8%
All-Time
Record
Manufacturing Decline Has Stopped
Blue Collar Job Losses Have Ended or
Are Close to Ending
Blue Collar Employment Change
Southern California, 1990-2011e
75,000
Manufacturing LOGISTICS
50,000
25,000
0
(25,000)
(50,000)
(75,000)
(100,000)
Source: CA Employment Development Department
Construction
Why Blue Collar Jobs Important
Educational Levels, Adults 25 & Over
Southern California Counties, 2010
High School or Less
Percent Bachelors or Higher
58.4%
48.5%
46.2%
44.6%
41.9%
36.7%
29.2%
18.6%
29.0%
34.6%
36.5%
30.8%
34.0% 33.7%
20.3%
13.2%
Imperial
San Bernardino
Riverside
Los Angeles
So. California
Source: 2010 Census
Ventura
Orange
San Diego
Policy Conflict:
Environment vs. Blue Collar Jobs
Public Health
Blue Collar Sectors
Bring Rising Asthma & Cancer Risk From Airborne Toxics
California Solution
Single Issue Regulatory Agencies & Processes
CA Air Resources Board
South Coast Air Quality Management District
CA Environmental Protection Agency
CA Water Resources Control Board
CEQA
& More
Two Results
1. Air Quality Is Improving
2. Downward Pressure On Blue Collar Jobs
Blue Collar Work Is Much of Our Workforce’s Best Chance
To Reach The Middle Class
Few Training Barriers To Beginning Employment
Mining
($65,268)
Blue Collar
Wholesale Trade
($51,156)
Blue Collar
Manufacturing
($47,933)
Blue Collar
Logistics
($45,851)
Blue Collar
Construction
($41,076)
Blue Collar
Gaming
($37,827)
Retail Trade
($28,824)
Agriculture
($24,552)
Hotel/Motel
($16,026)
Eating & Drinking ($16,026)
Alternative Jobs to
Blue Collar
Results Of Job Suppression
• Unemployment Higher Than It Needs To Be
• Underemployment A Constant Difficulty
• Lack of Access to Jobs Leading to the Middle Class
• Health Issues of Poverty
• Divorce
• Spousal Abuse
• Drug & Alcohol Abuse
• Suicide
• Lack of Timely Medical Care
Public Health Issues!
Public Policy Dilemma
Clean Air,
Asthma & Cancer
Are
Health & Social
Justice Issues
Lack of Blue
Collar Jobs &
Poverty Are
Health & Social
Justice Issues
After Years Of Focus on
Concentrating Solely On The Environment
Blue Collar Job Creation Is Our Forgotten Priority!
Housing Is Still An Issue
Share Underwater Mortgages
Exhibit 10.-Share of Mortgages Underwater
So. California Markets, 4th 2009 - 3rd 2011
55%
54%
33%
32%
27%
20%
4Q2009
Inland Empire
51%
49%
31%
26%
19%
1Q2010
49%
30%
25%
18%
2Q2010
47%
29%
25%
18%
18%
3Q2010
4Q2010
Source: CoreLogic
Los Angeles
45%
29%
25%
San Diego
44%
28%
28%
24%
18%
1Q2011
Orange
23%
17%
2Q2011
23%
18%
3Q2011
How Many Mortgages Underwater?
How Much Potential Average Quarterly Competition
for New Homes From Underwater Homes?
When Will Underwater Homes Reach Zero At Current
Rate of Decline?
3rd-2011
Avg.
Underwater Decline/Qtr. Quarters Years Year
Inland Empire
370,960
15,241
24
6.1 2017
Los Angeles
353,427
9,430
37
9.4 2020
San Diego
167,155
2,220
75
18.8 2030
98,069
4,227
23
5.8 2017
Orange
Home Sales Volumes
Lack of Foreclosure Sales Has Been An Issue
All Home Sales Trends
Southern California, 1988-2011e
160,000
140,000
Los Angeles
Orange
IE 63,497
LA 57,636
SD 25,605
OC 21,600
San Diego
Inland Empire
120,000
100,000
80,000
60,000
40,000
20,000
0
Source: Dataquick
Is There Any Good Housing News?
Demand > Supply & Price Above Lows
Price Trends by County
Southern California, 1988-2011ytd
$700,000
$600,000
$500,000
Los Angeles
Orange
San Diego
Inland Empire
OC $493,000
SD $363,000
LA $330,700
IE $185,600
$400,000
$300,000
$200,000
$100,000
$0
Source: Dataquick
Long Term
Price Competitive Advantage Still Exists
Soaring Housing Affordability
Easily Remains At or Near Record Levels
Housing Affordability, So. California
Share of Families Afford Median Priced Home, 1988-2011
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
69%
42%
33%
15%
Source: CA Association of Realtors
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
10-11%
BUT . . .
Oil Prices Soaring Again
Exhibit 6.-West Texas Intermediate Crude Oil Prices
Monthly Average. 1985-2012
$135
$120
$105
$90
$75
$60
$45
$30
$15
Source: Federal Reserve Bank of Dallas
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
$0
Congressional Madness
European Debt Crisis
Fear Caused Consumers Confidence
It Has Recently Begun Rising
Construction Job Depression
-42.6%
-216,122
Office Market
Housing Slowdown
Hurts!
Office Vacancy Rates
Have Soared!
Inland Empire
2006
7.3%
2011
23.8%
Orange Co.
6.9%
18.3%
L.A. Co.
9.7%
16.6%
San Diego
9.4%
20.2%
Forecast
2012 Better than 2011
Foreclosures A Major Continuing Issue
Complete Recovery 2015-2016??
We Need A Housing Solution!
www.johnhusing.com