Transcript Ten Years of Change in the Humboldt County Economy

The Index of Economic Activity
for Humboldt County
Ten Years of Change in the Humboldt County
Economy
Prof. Erick Eschker and Jessica Digiambattista
Celebrating 10 Years--The Index
of Economic Activity for
Humboldt County
• Professor Erick Eschker, Chair of the Department
of Economics
• Jessica Digiambattista, student assistant editor
• Garrett Perks and Andrea Walters, student
assistant analysts
• Founded by Prof. Steve Hackett and Prof. Tim
Yeager
• Six previous student assistants
Thanks to Humboldt Bank for
use of these great facilities!
Our Sponsoring Business
Partners:
• Coast Central Credit Union
Dean Christensen, President, and Dennis Hunter,
Vice President of Marketing.
Representing Coast Central Credit Union today are
Matt Dennis, Executive Vice President
and Jim Sessa, Vice President and Chief Financial
Officer
Our Sponsoring Business
Partners:
• Humboldt Bank
Martha Traphagen, Senior Vice President and
Area Manager
Our Sponsoring Business
Partners:
• North Coast Small Business Development
Center
Kristin Roach-Johnson, Executive Director
Our Sponsoring Business
Partners:
• Six Rivers Bank
Russ Harris, President and Chief Executive
Officer
Thanks to our Data Providers!
What is the Index?
• The only monthly source of broad-based
economic indicators for Humboldt County
• Extremely timely--most data are from the
previous month
• Leading indicators
• Data since January 1994
What is the Index?
Tracks six sectors of the economy:
• Home sales
• Retail sales
• Energy consumption
• Occupancy rates at hotels/motels/inns
• Employment
• Lumber manufacturing
What does an Index tell us?
• Seasonally adjusted--Units are not dollars
• Index numbers are relative to the base
period (January 1994=100)
• Useful for determining percent change
• Dow Jones Industrial Average example
Readership
www.humboldt.edu/~indexhum/
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Available about the 5th of each month
Steady growth in readership
95% of readers from outside HSU
E-mail us to join our mailing list
Index Web Stats
January 15-June 1
Hits
People (hosts)
Visits
31,828
1,654
4,979
(1,469 more than fall 2003)
(284 more than fall 2003)
(803 more than fall 2003)
On average, people read 3 out of the 4 editions this spring.
Index Budget
2003-2004
Sponsor Contributions
$5,500
Student stipends
Student webpage stipend
Project Director
Journal subscriptions
Postage/supplies
Hospitality
Phone lines
3000
200
1500
200
200
200
200
$5,500
Index projects in 2003-2004
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New website
New layout
Local Spotlight interviews
Gasoline prices in Humboldt County
Potential projects
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Housing sales predictor
Form “historical” Index back to 1960
Expansion of retail sector
New service sector
Depends upon continued support from
existing and new sponsors!
Demographic Changes
According to the U.S. Census Bureau:
• Humboldt County population has grown 6.2
percent from 1990 to 2000.
• California state population has grown 13.8
percent in the same time.
Demographic Changes
• In Humboldt County the number of
households with social security income has
grown 9.4 percent from 1990 to 2000.
• Throughout the state this change has been
12.7 percent.
Demographic Changes
• In Humboldt County the number of
households with retirement income has
grown 10 percent from 1990 to 2000.
• Throughout the state this number has grown
14.5 percent.
Home Sales
• Based on the number of homes that sell in
Humboldt County each month.
• Measure is adjusted for seasonal variation.
• Quality of the data is very high.
Changes and Trends
Home sales index has increased by
32 percent since 1994.
Changes and Trends
Median home prices have increased 97
percent, from $118250 to $232900.
Analysis
• Home sales began increasing before the
drop in interest rates.
• Local sales have followed the upward
trends seen at the state and national levels.
Projections
• Housing affordability will become more
problematic if housing prices continue to
rise faster than incomes.
• Some economists speculate there is a
housing bubble.
Retail Sector
• Based on seasonally adjusted sales at a
range of local retail businesses.
• Measures spending on final goods and
services.
Accuracy of the Retail Sales Index
Humboldt County
Taxable Sales vs. Retail Index
180
350
160
300
140
250
120
Correlation of 79.6
200
100
Quarter
Taxables Sales
Retail Index
Index Value
400
97 I
II
III
IV
98 I
II
III
IV
99 I
II
III
IV
00 I
II
III
IV
01 I
II
III
IV
02 I
II
Sales (million $)
(not seasonally adjusted)
Retail Sector Trends
From 1994 – 2004 the retail sales
index has increased 40 percent.
National Retail Trends
Retail sales increased 58 percent from
1994 – 2003.
Analysis
•Local retail sector did not follow the national
trends during the early 1990’s.
•More recently local retail has reflected the
national trends.
Projections
• Consumer confidence is currently high.
• EDD predicts that employment in the retail
trade sector will increase by 700 jobs from
2001 to 2008.
Electricity Consumption
• Based on seasonally adjusted electricity
consumption.
• Measures kilowatt hours of electricity used
in Humboldt County.
Quality of the Data
• Correlation between the index and the
actual consumption is 100%.
• Data are only received quarterly.
Changes and Trends
From 1993 – 2004 electricity consumption
has increased by 16 percent.
State Level Trends
Statewide electricity consumption from 1994 –
2001 increased by 10 percent.
Analysis
• Local electricity consumption has followed
statewide trends. Both increased rapidly in
the late 1990’s, then dropped sharply with
the onset of the energy crisis.
• Recent data show local consumption is
again trending upward.
Projections
The state electricity forecast predicts that
consumption will increase through 2007.
Hospitality Sector
• Based on seasonally adjusted average
occupancy each month at a cross section of
local hotels, motels and inns
• A measure of the number of tourists who
visit the North Coast
• Quality of data is very good
Very similar to series generated
by the CA Division of Tourism:
Humboldt County
CA Division of Tourism vs. Hospitality Index
300
80
250
200
60
150
40
100
20
50
Correlation of 96.2%
CA Division of Tourism
2003
2002
0
2001
0
Hospitality Index
Index Value
100
2000
Average
Occupancy (%)
(not seasonally adjusted)
• Unchanged 1994-2001
• Drop in occupancy starting in 2002
• Tourism Jobs flat since 1992 (confirms
Index data)
• U.S. Hotel and Lodging Industry Income
rising since 1994
• New rooms added, so drop in occupancy
rate may not indicate decreased visitors
• (9% increase in rooms since 2001)
• However, Index fell by 17%, so fewer
visitors since 2001
Humboldt County Hospitality
• Unchanged 1994-2001
• Drop in occupancy starting in 2002
Explanations
• Recent Recession (but why no increase
during late 1990s boom?)
• Higher gas prices starting 1999?
• 9/11
Hospitality Sector Projections
• Depends on people’s willingness to travel
• Depends on easy access to Humboldt
County
• EDD predicts employment in Hospitality
increasing 22% from 2001 to 2008.
Employment Sector
• Based on seasonally adjusted total county
employment as reported by the Employment
Development Department
• We report which sectors gained jobs and
which sectors lost jobs
• Quality of data is excellent
• Employment peaked 2000 and began mild
recovery in 2002 (same as nationally)
U.S. Employment Level
(dominated by upward trend)
• Only 5% increase in Employment since
1994 (almost 15% nationally)
• However, national population is growing
much faster
• Unemployment rate fell until 2001 then rose
• Unemployment rate higher than state/national
during boom, and similar during recession
No relative change in labor
markets within Humboldt County
Annual City labor statistics relative to Humboldt County
% of Labor Force
% point difference in U-rate
1994 2003
1994
2003
Arcata
14% 14%
0.8%
0.7%
Blue Lake
1%
1%
-2.0%
-1.5%
Eureka
22% 22%
0.1%
0.1%
Ferndale
1%
1%
-5.4%
-4.1%
Fortuna
7%
7%
-1.6%
-1.2%
McKinleyville
9%
9%
-1.8%
-1.4%
Rio Dell
2%
2%
9.3%
7.4%
Willow Creek
1%
1%
7.7%
6.1%
EDD projects 5.7% growth in employment
2001-2008
EDD Occupation job growth projections, 2001-2008
Occupation
job increase
Five greatest
Cashiers
Comb Food Prep & Serving Wrkrs, Incl Fast Food
Retail Salespersons
Maids & Housekeeping Cleaners
Truck Drivers, Heavy & Tractor-Trailer
220
180
140
110
80
Five least
Machine Feeders & Offbearers
Secretaries, Except Legal, Medical
Laborers & Freight, Stock, & Material Movers, Hand
Elementary School Teachers, Except Special Ed
Dishwashers
-60
-40
-30
-30
-30
Manufacturing Sector
• Based on payroll employment and board feet of
lumber production at county lumber companies
• Lumber-based manufacturing generates 60 percent
of total county manufacturing employment
• Manufacturing is about 8 percent of total county
employment
• Quality of data is very good, but is only a fair
representation of overall manufacturing
• Lumber manufacturing peaked 1997
• Similar to County Timber Harvest
• Similar to total county manufacturing
employment (EDD)
• Decline in payroll began later (2000)
• Just as U.S. Total Manufacturing Industry
Income peaked in 2000 (BEA)
Manufacturing Sector Projections
• EDD predicts employment in total
manufacturing will decrease by 300 jobs
(5.7%) from 2001 to 2008.
• EDD predicts employment in lumber &
wood products and sawmills will decrease
by 800 jobs (13%) from 2001 to 2008.
Composite Index
• Measure of overall economic activity
• Weighted combination of the six sectors:
Sector weights in Composite Index
Homes
Employment
Retail
Manufacturing
Hospitality
Energy
7%
40%
15%
12%
14%
12%
• Index peaked in 2000, bottomed out in 2002
• Less than 10% growth since 1994
• U.S. Real GDP is 30% higher since 1994
• U.S. Real per capita GDP is 20% higher since
1994
• During 1990s boom, California incomes grew
relative to the U.S.
• During 1990s boom, Humboldt County incomes
fell relative to the U.S.
Humboldt County Economy
1994-2004
More steady than national/state economy:
Grew less during Boom, fell less during Recession
Similar pattern to rural U.S.:
• Sharpest decline in Manufacturing
• Uneven record in Hospitality, Energy
• Largest gains in Retail/Housing
Humboldt County Economy
10-year Projections
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Aging of constant total population
Continued declines in Manufacturing
Increases in Services (low and high value added)
Vulnerable to government budget reductions
Cooling in Housing market
Moderate overall growth