John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP 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 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%

Needed To Help Homes Sales Consumer Confidence, 2009-2015 Needed To Help Homes Sales

S & P 500 Stock Index 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Interest Rates Remain Benign Encourages Home Sales

California Wage & Salary Employment: A Record Level

California Job Gains/Losses Up 1,932,392 13.2% Up 2007 14,598,308 2015 16,531,300 Recovery Great Recession

Inland Empire Economy Gaining Strength!

Job Quality Private High-Paying California: 14.6% Inland Empire: 5.0%

Inland Empire Growth was the 2nd Largest Absolute Job Gain in California in 2014!

Unemployment Falling, But High

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 27.7% More People Per Health Care Worker in 2014

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%

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 3.0% of U.S. Growth

CA Is Not Loved By Executives & Entrepreneurs

Inland Empire Manufacturing Jobs 2011-2015 4% of Job Growth Median Pay $49,567

Construction: Finally Coming Back

Notices of Default At Very Low Levels Only 835 NODs in November

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 $353,820 $350,000 $161,000 $173,000

Affordability to Median Income Household 3rd Quarter 2015 I. Empire: 46%-54% LA: 24%-76% SD: 24%-76% Orange: 20%-80%

Home Sales Volume No Breakout

Construction Jobs: Finally Growing 2011-2015 12% 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 $484,409 $463,034 Claremont Loma Linda $590,000 $360,087 $351,504 $417,443 $585,199 EASTVALE $468,269 $440,000 CORONA $436,898 TEMECULA $358,516 $399,676

Migration of AA or Higher

Professionals, Mgmt., Utilities, Information, Mining Slowly Coming Back 2011-2015 4.1% of Growth Median Pay $65,453

Office Space Net Absorption 492,858

Office Vacancy Rate 15.0%

Office Lease Rates Barely Starting To Recover

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 Low Paying Job Growth Retail, Consumer & Bus. Services, Hotel, Eat & Drink Amusement, Agriculture, Employment Agency 2011-2015 45% of Job Growth Median Pay $28,927

Federal, State, Local Government 2011-2015 -5% of Job Growth Median Pay $57,984

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