Transcript Inland-Empire-Forecast-February-2016-Real

Inland Empire Prosperity . . .
John Husing, Ph.D.
Economics & Politics, Inc.
Chief Economist, IEEP
After Losing 8.71 Million Jobs …
Now At A Record Level of Jobs
U.S. Jobs Long Slow Growth - Not Over-Heating
Petroleum Prices Back to 2003 Levels
Helps Families In Modest Income Areas
Value of the Dollar:
Helps Imports & Hurts Exports
100.0
2012-2015
28.0%
Consumer Confidence, 2009-2016
Needed To Help Homes Sales
S & P 500 Stock Index Back to 2,000
Interest Rates Very Low Again
Encourages Home Sales
California Wage & Salary Employment: A Record Level
California Job Gains/Losses
2007
15,844,325
2015
16,474,808
Up
630,483
4.0% Up
Recovery
1,809,542
Great
Recession
-1,178,158
Inland Empire Economy Gaining Strength!
Job Quality
Inland Empire Growth was the 2nd Largest
Absolute Job Gain in California in 2015!
Unemployment Falling
The Issue:
Poverty
Diversity Challenge
Gold Mine Theory
Secondary Tier
Primary Tier
Educational Challenge For Adults &
Their Children
Health Care
Health Care Jobs: Continuous Growth
2011-2015
12% of Job Growth
Median Pay $54,261
Inland Empire Underserved
by Health Care Workers
26.6% More People Per
Health Care Worker in 2015
Sophisticated Warehousing Operations
Port Container Volumes
Strong Even With January Labor Slowdown
Fulfillment
Warehousing
E-Commerce Growth Rates
Year Over Year by Quarter
Net Industrial Space Absorption
23.1
million
20.7 Million Sq. Ft. of Industrial Under Construction December-2015
Industrial Overwhelmingly
In The Inland Empire
Industrial Vacancy Rate
3.9%
3.6%
Asking Lease Rates On
Industrial Facilities Are Rising
Logistics Powerful Job Growth
2011-2015:
23% of New Jobs
Median Pay $45,677
Permit Valuation Increasing
But Slowly
PM 2.5: Diesel Pollution
-95.6%
Manufacturing:
Should Be A Major Growth Source
California Manufacturing Job Growth
Just 5.4% of U.S. Growth
CA Is Not Loved By Executives & Entrepreneurs
Inland Empire Manufacturing Jobs
2011-2015
5% of Job Growth
Median Pay $49,567
Construction: Finally Coming Back
Notices of Default At Very Low Levels
Only 1,000 NODs in
January 2016
Underwater Homeowners
Negative Equity Has Dropped
4th Qtr 2009 – 3rd Qtr 2015
54.9% to 11.4%
Home Price Trends
-26.9%
83.4%
Long Term Competitive
Price Advantage Still Exists
$379,000
$190,000
$202,000
Affordability to
Median Income Household
3rd Quarter 2015
I. Empire: 45%-55%
LA:
27%-73%
SD:
25%-75%
Orange: 21%-79%
Home Sales Volume
No Breakout
Domestic In-Migration: Stalled
-10,241 8 Years -1,280 per year
Construction Jobs: Growth Gaining
2011-2015
13% of Job Growth
Median Pay $51,051
Assessed Valuation
2008-2015
Up $3.2 Billion 0.8%
Inflation Up 8.6%
SB Co. Up +2.8%
Riv Co. Down -0.8%
High Paying Sectors
Jack Dangermond
Ahmad Adel Al-Khatib
Higher End Homes Draw
Well Educated Workers
UPLAND
$497,455
$504,397
Claremont
$594,476
Loma Linda
$355,000
$353,820
$449,386
$599,310 EASTVALE
$465,532
$450,500
CORONA
$441,965
$376,303
TEMECULA
$405,538
Migration of AA or Higher
Redlands-Loma Linda
Western Inland Empire
Temecula-Murrieta
Professionals, Mgmt., Utilities, Mining
Slowly Coming Back
2011-2015
3.6% of Growth
Median Pay $65,453
Office Space Net Absorption
492,858
Office Vacancy Rate
15.0%
Gold Mine Theory
Secondary Tier
Primary Tier
Retail Sales
2006-2015
Up $7.7 Billion, 12.6%
Inflation Up 16.1%
SB Co. Up +14.4%
Riv Co. Up +10.7%
Low Paying Job Growth
Retail, Consumer & Bus. Services, Hotel, Eat & Drink
Amusement, Agriculture, Employment Agency
2011-2015
44% of Job Growth
Median Pay $28,927
Federal, State, Local Government
2011-2015
-5% of Job Growth
Median Pay $57,984
Looking Ahead . . .
• Inland Empire Is a Job Engine Again
• Construction Coming Back … Residential Still Weak
• Manufacturing Will Be Under Pressure
• Logistics Will Remain Strong
• Health Care Should Expand
• Office Growth An Issue Given E-Commerce Changes
• Lower Paying Jobs Smaller Share Than Most Areas
• Labor Availability May Become An Issue
• Forecast? 3.6% to 4.0% (49,046 – 54,496)
www.johnhusing.com