John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Prosperity...

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

Consumer Confidence, 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 ,844,325 Great Recession -1,178, ,474,808 Up 630, % Up Recovery 1,809,542

Inland Empire Economy Gaining Strength!

Job Quality

Inland Empire Growth was the 2 nd Largest Absolute Job Gain in California in 2015!

Unemployment Falling

The Issue: Poverty

Diversity Challenge

Gold Mine Theory Primary Tier Secondary Tier

Educational Challenge For Adults & Their Children

Health Care

Health Care Jobs: Continuous Growth % 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 3.6% 3.9%

Asking Lease Rates On Industrial Facilities Are Rising

Logistics Powerful Job Growth Median Pay $45, : 23% of New Jobs

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 % 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 4 th Qtr 2009 – 3rd Qtr % to 11.4%

Home Price Trends 83.4% -26.9%

Long Term Competitive Price Advantage Still Exists $190,000 $202,000 $379,000

Affordability to Median Income Household 3 rd Quarter 2015 I. Empire: 45%-55% LA: 27%-73% Orange: 21%-79% SD: 25%-75%

Home Sales Volume No Breakout

Domestic In-Migration: Stalled -10,241 8 Years -1,280 per year

Construction Jobs: Growth Gaining Median Pay $51, % of Job Growth

Assessed Valuation 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 $599,310 $449,386 $497,455 UPLAND EASTVALE $465,532 $504,397 $450,500 CORONA $441,965 TEMECULA $376,303$405,538 $594,476 Claremont $353,820$355,000 Loma Linda

Migration of AA or Higher Redlands-Loma Linda Western Inland Empire Temecula-Murrieta

Professionals, Mgmt., Utilities, Mining Slowly Coming Back Median Pay $65, % of Growth

Office Space Net Absorption 492,858

Office Vacancy Rate 15.0%

Gold Mine Theory Primary Tier Secondary Tier

Retail Sales 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 % of Job Growth Median Pay $28,927

Federal, State, Local Government Median Pay $57, % of Job Growth

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)