John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Economic Growth . . . Building An Expansion John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP
After Losing 8.71 Million Jobs … U.S. Jobs Almost All The Way Back -589,000 Government Jobs +9,938,000 Private Sector (114.1%)
U.S. & CA Unemployment History Prime Rate: 21% Cold War Ends Great Recession
California Job Gains/Losses 2008-2010 -1,066,400 2011-2014 +1,320,415 2014 Up +254,015 Recovery Dot.Com Defense Cutbacks Great Recession
Highest Unemployment Rates U.S. Metro Areas
Unemployment Falling, But High
Inland Empire
How Regional Economies Work Secondary Tier Economic Development … Increase The Economic Base! Primary Tier
Three Step Growth Process Based On Interaction Of: Population Preferences Dirt Prices Force Decisions
Southern California Population Growth, 2000-2012
People Prefer To Live Near The Coast
Answer stable over 5 years As a homeowner, would you prefer to move closer to work if it involved a townhouse or condo? (I-15 & Sr-91 Commuters, 2008) 87.5% No Answer stable over 5 years Same question to Renters: 72.3% No
Importance of Blue Collar Sectors
Stage #1: Rapid Population Growth People forced to move inland for affordable homes Population Serving Jobs Only High Desert & I-215 South are current examples
Commuting Bad, But Stable Over Time 1,650,384 Total Jobs 1,156,313 Inside IE 494,071 Commute Outside County 154,845 Between IE Counties 339,226 Outside IE 20.6% Commute Outside the IE 16.3% Orange County Commuters
Construction & Real Estate: Finally Some Hope
Share of Underwater Homes Plunging
Direct Investor Purchases of Foreclosures
Notices of Default At Low Levels
Home Price Trends 2014 39.8% 71.3% 40.9% Above Existing Home -34.7%
Long Term Competitive Price Advantage Still Exists
Mortgage Credit Easing A little A. Credit standards on mortgage loans that your bank categorizes as prime residential mortgages have: All Respondents Large Banks Other Banks Banks Percent Tightened considerably 2 2.8% 1 2.9 % Tightened somewhat 0.0% 5.7% Remained basically unchanged 50 70.4% 21 58.3% 29 82.9% Eased somewhat 17 23.9% 14 38.9% 3 8.6% Eased considerably Total 71 100.0% 36 100.0 % 35
Volume Stagnant
Not Bringing Skills, Wealth, Income & Spending Inland Empire’s In-migration From Coastal Counties Has Not Yet Recovered -27,324 Not Bringing Skills, Wealth, Income & Spending
Why Low Volume Less Foreclosures Buyers Want or Need High Prices Continued Wall Street Acquisition of Large Share of Foreclosures Credit Hurt By Foreclosures Higher FICO Scores FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000 Fear
Permits: Finally A Little Hope
Construction & Mining Job Growth
Assessed Valuation Finally Growing (6.1% for SB County) 6.3% Inflation
Firms Prefer The Coastal Counties
Stage 2: Strong Industrial Growth
Industrial Construction
Logistics Flow of Goods
Port Container Volumes
Fulfillment Centers
E-Commerce Growth Rates Year Over Year by Quarter
Job Growth: Logistics 18.8% of All Inland Jobs … During 2013
Manufacturing: Could Be A Major Growth Source
U.S. v. California Manufacturing Jobs
Job Growth: Manufacturing
Health Care
Inland Empire Underserved
Meeting Standards of Care
Public Health Factor Rankings of 58 Counties, 2014
Health Care Demand Set To Explode Inland Health Care Workers Handle More People Than CA (28%) People Without Health Insurance (2012) 828,431 (19%) People Will Age, Already Those 55 & Over 926,696 (21%) Population Growth Will Resume (2000-2013) 1,075,807 (33%)
Job Growth: Health Care
Stage 3.-Office Based Firms Follow Their Workers
Skilled Workers Migrate Inland For Better Homes
Higher End Homes UPLAND $479,3416 $473,351 Loma Linda $347,075 $329,924 $418,634 $560,458 EASTVALE $475,498 $435,873 CORONA $443,870 TEMECULA $350,479 $397,927
Office Absorption Finally Starting to Recover High-End Jobs Follow Workers into the Area
Office Vacancy Rates Improving But Still Very High 24.0% 17.9%
Growth: Office Based Jobs
How Regional Economies Work Secondary Tier Primary Tier
Retail Sales Almost Back 13.7% Inflation
Job Growth: Population Serving & Lower Paying
Where Will IE Be In Its Job History? 2011-2013 81,733 of 143,108 lost or 57.1% 2011-2014 121,833 of 143,108 lost or 85.1% 21,275 Jobs To Go 33,839
Forecast: Review 2014 Better Than 2013 Construction Returning Logistics Strong Manufacturing Weak Health Care Set To Take-Off Office Sectors Modest Pop. Related Group Gaining Govt & Education Crawling Unemployment Drops to 8.5% Growth Looking Normal 21,802 Jobs Below Pre-Recession
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