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 Almost All The Way Back -614,000 Government Jobs +10,077,000 Private Sector (115.7%)
U.S. & CA Unemployment History Prime Rate: 21% Cold War Ends Great Recession
California Job Gains/Losses 2008-2010 -1,066,400 2011-2014 +1,315,558 2014 Up +249,158 Defense Cutbacks Dot.Com
Great Recession Recovery
Highest Unemployment Rates U.S. Metro Areas
Unemployment Falling, But High
Inland Empire
How Regional Economies Work Secondary Tier Economic Development … Increase The Economic Base!
Primary Tier
Three Step Growth Process Based On Interaction Of:
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Population
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Preferences
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Dirt Prices Force Decisions
Southern California Population Growth, 2000-2013
People Prefer To Live Near The Coast
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
Importance of Blue Collar Sectors
Stage #1: Rapid Population Growth
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People forced to move inland for affordable homes
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Population Serving Jobs Only
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High Desert & I-215 South are current examples
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
Construction & Real Estate: Finally Some Hope
Share of Underwater Homes Plunging
Direct Investor Purchases of Foreclosures
Notices of Default At Low Levels
Home Price Trends 2014, 40.9% Above Existing Home -34.7% 39.8% 71.3%
Long Term Competitive Price Advantage Still Exists
Inland Affordability Still Strong
Mortgage Credit Easing A little Credit standards on mortgage loans that your bank categorizes as prime residential mortgages have:
Banks All Respondents Percent Banks Large Banks Percent Banks Other Banks Percent Tightened considerably Tightened somewhat Remained basically unchanged Eased somewhat Eased considerably Total 2 2 50 17 0 71 2.8% 2.8% 70.4% 23.9% 0.0% 100.0% 1 0 21 14 0 36 2.8% 0.0% 58.3% 38.9% 0.0% 100.0 % 1 2 29 3 0 35 2.9 % 5.7% 82.9% 8.6% 0.0% 100.0 %
Volume Stagnant
Inland Empire’s In-migration From Coastal Counties Has Not Yet Recovered
-27,324 Not Bringing Skills, Wealth, Income & Spending
Why Low Volume
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Less Foreclosures
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Buyers Want or Need High Prices
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Continued Wall Street Acquisition of Large Share of Foreclosures
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Credit Hurt By Foreclosures
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Higher FICO Scores
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FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000
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Fear
Permits: Finally A Little Hope
Construction & Mining Job Growth
Assessed Valuation Finally Growing (6.2% for SB County) 6.3% Inflation
Firms Prefers The Coastal Counties
Stage 2: Strong Industrial Growth
Industrial Construction
Logistics Flow of Goods
Port Container Volumes
Fulfillment Centers
E-Commerce Growth Rates Year Over Year by Quarter
Logistics Job Growth 18.8% of All Inland Jobs in 2013 15.5% So Far in 2014
Manufacturing: Could Be A Major Growth Source
California Just 1.1% of U.S. Manufacturing Job Growth
Manufacturing Non-Job Growth!
Health Care
Inland Empire Underserved
Meeting Standards of Care
Public Health Factor Rankings of 58 Counties, 2014 45 th 38 th
Health Care Demand Set To Explode Inland Health Care Workers Handle More People Than CA (28%) People Without Health Insurance (2012) 828,431 (19%) People Will Age, Already Those 55 & Over 926,696 (21%) Population Growth Will Resume (2000-2013) 1,075,807 (33%)
Health Care Job Growth … Modest!
Stage 3.-Office Based Firms Follow Their Workers
Skilled Workers Migrate Inland For Better Homes
Higher End Homes UPLAND $479,341 6 $473,351 $560,458 $418,634 EASTVALE $475,498 $435,873 CORONA $443,870 Loma Linda $350,479 TEMECULA $397,927
Office Absorption Finally Starting to Recover High-End Jobs Follow Workers into the Area
Office Vacancy Rates Improving But Still Very High 24.0% 17.9%
Office Based Job Growth
How Regional Economies Work Secondary Tier Primary Tier
2014 Retail Sales Head For 6.6% Above Pre-Recession Peak 15.2% Inflation
Job Growth: Population Serving & Lower Paying
Where Will IE Be In Its Job History?
2011-2013 81,733 of 143,108 lost or 57.1% 2011-2014 121,833 of 143,108 lost or 85.1% 21,275 Jobs To Go
Job Growth By Market Area, July YTD
Forecast: Review 2014 Better Than 2013
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Construction Returning
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Logistics Strong
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Manufacturing Weak
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Health Care Set To Take-Off
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Office Sectors Modest
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Pop. Related Group Gaining
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Govt & Education Crawling
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Unemployment Drops to 8.5%
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Growth Looking Normal
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21,802 Jobs Below Pre-Recession