Inland Empire’s Economy 2012 … Finally Recovery Underway! John Husing, Ph.D. Economics &...
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Transcript of Inland Empire’s Economy 2012 … Finally Recovery Underway! John Husing, Ph.D. Economics &...
Inland Empire’s Economy
2012 … Finally Recovery Underway!
Economics & Politics, Inc.
After Losing 8.74 Million Jobs …U.S. Job Creation Is Crawling Back
30% of Jobs Regained
VV Pattern of Likely Recovery
UUxx
Inland Empire Job Growth/Destruction
2007 2008 2009 2010 2011 2012
(110,000)
(100,000)
(90,000)
(80,000)
(70,000)
(60,000)
(50,000)
(40,000)
(30,000)
(20,000)
(10,000)
0
10,000
20,000
30,000
Source: CA Employment Development Department
Wage & Salary Job Creation/DestructionInland Empire, 2007-2011
Job Growth Comparison: November
26,600
19,50013,100 12,600
1,800 1,400
75,000
San Diego Co.Inland EmpireOrange Co.Los Angeles Co.Ventura Co. Imperial Co.So. California
Source: CA Employment Development Department
Average Job Change, California MarketsCalifornia Markets, November, 2010-2011
Finally!
In Nov-2011, Inland Empire’s Unemployment was 12.5%12.5%, CA was 10.9%, U.S. 8.2%
Still Tough Unemployment Rate
There is Some Good News Locally
Quarterly Industrial Absorption, 1991-2011
20 million Sq.Ft.
Industrial Vacancy Rate
12.8%
6.8%
2.7%
Change In Container Flows
-25.4%
15.3%
1.6 1.6 1.6 1.7 1.82.1 2.3
2.73.1
2.83.1 3.3
4.8 5.0
5.76.0
6.87.2
8.2 8.0
7.2
6.0
6.9 6.9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e
Import Export
Source: Port Import Export Reporting Service (PIERS), collected from Vessel
Imported & Exported Container Volume, 2000-2011ePorts of Los Angeles & Long Beach (mil. teus)
Fourth Highest Total Container Volume
2. Ports On West Coast Nearest Asia
Los Angeles Long Beach
8,000-Container Post-Panamax Ships
3. Deep Water Ports As Ships Draw Over 50 feet of Water
Issue: Panama Canal Diversion
Suez
International Trade
112.2
84.0
72.8
-35.1%
Dollar Down: U.S. Goods Cheaper
2002 $1,5002012 $2,027
2002 $1802012 $117
Manufacturing
Manufacturing Orders:Aggressive to Neutral to Growing
Inland Empire Mfg. Goes To Neutral
Export Container Volume
2011 YTD2011 YTD6.8%6.8%
All-Time Record
Inland EmpireManufacturing Coming to Life
Industrial Situation
Goods Movement
Strength As No Where Else To Build Facilities
Strength Due To Long Term Growth of Trade
Manufacturing
Returning With U.S. Economy
Aided By Low Value of the Dollar
CA Regulation A Huge IssueCA Regulation A Huge Issue
Blue Collar Job Losses Have Ended or Are Close to Ending
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
ytd
(26,000)
(22,000)
(18,000)
(14,000)
(10,000)
(6,000)
(2,000)
2,000
6,000
10,000
14,000
Manufacutring JobsLogistics JobsConstruction Jobs
Source: CA Employment Development Department2011=Jan.-November Average
Blue Collar Job ChangesInland Empire, 1991-2011e
Job Change: Key Economic Drivers
Jan-
10
Feb
-10
Mar
-10
Apr
-10
May
-10
Jun-
10
Jul-
10
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Apr
-11
May
-11
Jun-
11
Jul-
11
Aug
-11
Sep
-11
Oct
-11
Nov
-11
(6,000)
(4,000)
(2,000)
0
2,000
4,000
6,000
(6,000)
(4,000)
(2,000)
0
2,000
4,000
6,000
Logistics Health Care
Sourec: CA Employment Development Department
Inland Empire Logistics & Health Care Job ChangesJanuary 2010 to November 2011
Health Care
Logistics
Two Sectors Are Dominating Inland Empire Job Growth of Late
32.9%23.2%
43.9%
5,400
3,800
7,200
Logistics Health Care All Other
New Jobs Share
Sourec: CA Employment Development Department
Inland Empire Job CreationOctober 2010-2011
56.1%
Why Blue Collar Jobs Important
13.2%
18.6% 20.3%
29.2% 29.0% 30.8%
36.5%33.7%
58.4%
48.5%46.2% 44.6%
41.9%
36.7%34.6% 34.0%
Imperial San Bernardino Riverside Los Angeles So. California Ventura Orange San Diego
High School or Less Percent Bachelors or Higher
Source: 2010 Census
Educational Levels, Adults 25 & OverSouthern California Counties, 2010
Policy Conflict:
Environment vs. Blue Collar Jobs
Public Health
Blue Collar Sectors Bring Rising Asthma Asthma & & CancerCancer Risk From Airborne Toxics
California Solution
Single Issue Regulatory Agencies
CA Air Resources Board
South Coast Air Quality Management District
CA Environmental Protection Agency
CA Water Resources Control Board
& More
Two Results
1. Air Quality Is Improving
BlueBlue Collar Collar Work Is Much of Our Workforce’s Best Chance To Reach The Middle ClassMiddle Class
2. Downward Pressure On Blue Collar Jobs
Few Training BarriersFew 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 ClassLeading to the Middle Class
• Health Issues of Poverty
• Divorce
• Spousal Abuse
• Drug & Alcohol Abuse
• Suicide
• Lack of Timely Medical Care
Public Health Issues!
Clean Air, Asthma & Cancer
Are Health & SocialHealth & SocialJusticeJustice Issues
Lack of Blue Collar Jobs & Poverty Are
Health & SocialHealth & SocialJusticeJustice Issues
Public Policy Dilemma
After Years Of Focus on Concentrating Solely On The EnvironmentConcentrating Solely On The Environment
Blue Collar Job Creation Is Our Forgotten PriorityForgotten Priority!!
Housing Is Still An Issue
Inla
nd
econ
om
y
Foreclosures Issue1,012,594 HomesIn Inland Empire
36.6%All Homes
When Does Mortgage Difficulty End?
If Rate of Decline of
15,241 Underwater Homes per Quarter Persists
Seasonally Adjusted Home Volumes Lack of Foreclosure Sales Has Been An Issue
Is There Any Good Housing News?
Last Foreclosure Sold!
Demand > Supply & Price Above Lows
10.6%
Long Term Price Competitive Advantage Still Exists
Soaring Housing AffordabilityEasily Remains At Near Record Levels
69%
59%
15%
BUT . . .
Oil Prices Soaring Again19
85
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
$0
$15
$30
$45
$60
$75
$90
$105
$120
$135
Source: Federal Reserve Bank of Dallas
Exhibit 6.-West Texas Intermediate Crude Oil PricesMonthly Average. 1985-2012
Congressional Madness
European Debt Crisis
Fear Caused Consumers Confidence It Has Recently Begun Rising
Office Market
Housing Slowdown Hurts!
Office Absorption
Absorption Fell With Housing Slowdown
Office Vacancy Rate Has Jumped Dramatically
7.0%
23.8%
Major Office Occupations Job Changes
Jan-
10
Feb
-10
Mar
-10
Apr
-10
May
-10
Jun-
10
Jul-
10
Aug
-10
Sep
-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Apr
-11
May
-11
Jun-
11
Jul-
11
Aug
-11
Sep
-11
Oct
-11
Nov
-11
(10,000)
(8,000)
(6,000)
(4,000)
(2,000)
0
2,000
(10,000)
(8,000)
(6,000)
(4,000)
(2,000)
0
2,000
Sourec: CA Employment Development Department
Finance, Insurance, Real Estate, Management, ProfessionsJanuary 2010 to November 2011
Office Forecast
Now A Permanent Part of the Inland Empire Story
Strength from Firms Needing to Serve IE Market
4.3 million people (More than 24 states)
1.3 million jobs
Near Term: Weakness From Housing Slowdown
Long Term: Housing Firms Will Add Great Strength
2012 Better than 2011
Foreclosures A Continuing Issue
Complete Recovery 2015-2016??
2011 Job Growth Did Not Occur Neutral
www.johnhusing.com