11-10-11-GBC Econ Outlook-Frandorf presentation

8/3/2019 11-10-11-GBC Econ Outlook-Frandorf presentation

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2011 Wilmington Trust Corporation. All rights reserved. 1

Comparing Marylands economy to the national economyThe executive summary


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2011 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.

A summertime slowdown in Marylands recovery

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JuneAugust sees growth ebb in the Old Line State as U.S. growth improves

Year-over-year change in coincident economic indices

Source: Federal Reserve Bank of Philadelphia

A coincident index summarizes current economic conditions in a singlestatistic. The model includes: 1) non-farm payroll employment; 2) averagehours worked in manufacturing; 3) the unemployment rate; and 4)inflation-adjusted wage and salary disbursements.


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Less labor market stress: A regional advantage

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Rates of unemployment, seasonally adjusted

Source: U.S. Bureau of Labor Statistics

VA 6.8% 6.3% (0.5)

MD 7.4% 7.3% (0.1)

NY 8.4% 8.0% (0.4)

DE 8.3% 8.1% (0.2)

WV 9.2% 8.1% (1.1)PA 8.6% 8.2% (0.4)

CT 9.1% 9.0% (0.1)

OH 9.9% 9.1% (0.8)

NJ 9.3% 9.4% 0.1

FL 11.6% 10.7% (0.9)

MI 12.2% 11.2% (1.0)

U.S. 9.6% 9.1% (0.5)

8% or Less

8.1% to 9%

9.1% or More

August 2011 Aug. 2010 Aug. 2011 Diff.


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Less labor market stress: Maryland in focus

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The states jobless rate continues to be well below the U.S. norm

Rates of unemployment, seasonally adjusted



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Less bust, more recovery in local jobs market

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In recent years, Marylanders personal incomes have grown much faster than U.S. rate

Inflation-adjusted aggregate growth in personal incomes since 1Q 2007

Source: U.S. Bureau of Economic Analysis


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Inflation-adjusted value of goods and services produced in Maryland per capitarelative to U.S. average per capita output

Solid gains in worker productivity

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Output per Maryland resident has grown relatively quickly since 2007

Source: U.S. Bureau of Economic Analysis


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Lately, however, job growth lagging in Maryland

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Year-over-year change in private sector employment

Source: U.S. Bureau of Labor Statistics, M&T estimates

2006 28,500 1.4%

2007 11,700 0.6%

2008 (17,700) (0.8%)

2009 (82,800) (3.9%)

2010 (13,800)* (0.7%)*

2011 YTD 4,500 0.2%

YOY change in Marylands privatesector employment

*Adjusted for est. job losses due to Feb. 2010 snowstorm. YTD is through August 31.


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Jobs gained / lost in Maryland, by sector

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Most sectors shrank in last 12 months but higher-paying jobs led payroll growth


Professional & business services

Education & health care

Trade / transportation

Manufacturing

Government

Financial activities

Leisure & hosp.

Construction

+1.1%

+1.7%

+1.9%

(0.4%)

(0.2%)

(5.4%)

(0.9%)

(4.6%)

% changeYear-over-year changes,July and August 2011 vs. July and August2010

Absolute change


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Job growth lagging lately: Baltimore area

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Year-over-year changes in private sector employment: Baltimore-Towson Metro Area vs. United States

Source: U.S. Bureau of Labor Statistics, M&T estimates

2006 18,100 1.7%

2007 9,600 0.9%

2008 (5,800) (0.5%)

2009 (42,800) (3.9%)

2010 (5,400)* (0.5%)*

2011 YTD 5,100 0.5%

YOY changes in metro area privatesector employment

Adjusted for est. job losses due to Feb 2010 snowstorm. YTD figures are through August.


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Job growth lagging lately: Washington

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Debt ceiling debate brought hiring to a haltspeed bump or sign of things to come?

Year-over-year changes in private sector employment: Washington, D.C. Metro Area vs. United States


2006 41,100 1.8%

2007 17,100 0.7%

2008 (300) (0.0%)

2009 (65,300) (2.8%)

2010 2,300* 0.1%*

2011 YTD 16,700 0.7%

YOY changes in private employment in Washington

* 2010 figures adjusted to account for estimated job losses due to February snowstorm.


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Will less bust, more recovery continue?

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Changes in private employment since January 2002


January 2002 employment equals 100%. Based on seasonally adjusted employment.


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Inflation-adjusted federal spending in Maryland, in 2005 $B

Uncle Sams helping hand

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Federal spending in Maryland doubled over the past decade but fell in 2010

Sources: U.S. Census Bureau, Bureau of Economic Analysis

Fiscal Year Ending September 30


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Federal spending in Maryland: Inflation-adjusted year-over-year change

Federal spending in Maryland likely to fall again in FY2012

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Amid worries about deficits and debt, fiscal stimulus is on its way out


POST-9/11 DEFENSE BUILDUP

All fiscal years ending September 30


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Outlook for Maryland in 2012 grows cloudy

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Momentum has faltered since the first half of 2011

Maryland Leading Economic Index

The leading index predicts the 9-month growth rate of the coincident(i.e., current activity) index. The models include: 1) state-level housingpermits; 2) initial claims for state jobless benefits; 3) delivery timesfrom the Philadelphia Feds Business Outlook Survey; and 4) theinterest rate spread between the 10-year U.S. Treasury note and the

federal funds rate.

Source: Federal Reserve Bank of Philadelphia


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Super Committee poses downside risk

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Federal spending cuts could act as a stiff economic headwind for the state


All fiscal years ending September 30


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Inflation-adjusted gross domestic product growth

Sluggish growth forecast

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State economy expected to grow in 2012but at less than half the U.S. rate

Fiscal Year Ending September 30

Source: Moodys Analytics


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11-10-11-GBC Econ Outlook-Frandorf presentation

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