One State, Two State, Red State, Blue State: The Regional Outlook Presented by: Jim Diffley Group Managing Director, US Regional Services Global Insight June 8, 2005

4/05 Jobs Update — States Payroll employment up y/y in all but Michigan and South Carolina Revisions showed Ohio positive! Mountain states +3.3%, Pacific 1.9%, Southeast +1.7%; Midwest, New England < 1% NV (6.4%), AZ, UT, OR, FL lead Employment in 32 states back to March 2001 level Unemployment varies from 2.9% in Hawaii to 7.0% in Michigan New methodology BLS now ascribing statistical significance SC very slight, though even MI not New unemployment methodology SOS = US 11/24/2018

Employment Growth 2005 – 2010 (average annual growth rate) 11/24/2018

Return to Peak Employment 11/24/2018

Personal Income Growth 2005 – 2010 (average annual growth ) 11/24/2018

Real GSP Growth 2005 – 2010 (average annual growth rate) 11/24/2018

2004 Population As usual Nevada, Florida, Arizona lead the way Massachusetts was negative, North Dakota not Surprises? Fast growing NV, FL even faster than expected Laggards ND, PA, LA, MS also slightly faster More resort casinos in Las Vegas- Cosmopolitan to follow Wynn’s retail surge there 11/24/2018

Census Projections 88% of expected growth is in Sun Belt GII Northeast 5.9% Midwest 14.6% South 42.5% West 48.5% US 30.5% Source: US Census Bureau, Population Division, Interim State Population Projections, 2005 11/24/2018

Net Migration 2005 – 2010 (thousands) Electoral College Sun Belt gains , Frost Belt losses 4 electoral votes for 2012 11/24/2018

The Bush Years Tax Cuts Defense and Homeland Security Spending Budget Deficits Trade Deficit High Oil Prices Weak Dollar Low Interest Rates and Baseball to Washington Stem Cell Research to California Frey notes from Census projections (Ohio no longer decisive) 11/24/2018

Winners and Losers: Jobs 2000 – 2005 Top Ten Nevada Wyoming Florida Arizona New Mexico Alaska Hawaii Montana Idaho North Dakota Bottom 10 Michigan Ohio Illinois Massachusetts South Carolina North Carolina Connecticut Missouri New York Mississippi 11/24/2018

Per Capita Income 2004 (thousands of dollars) Who benefits from the tax cuts? 11/24/2018

State Budgets Oil, Natural Gas, and Commodities Prices Alaska, Wyoming, New Mexico Wyoming Web site: ‘Oh God, let there be another mineral boom. I promise not to screw it up this time.’ 2005 April surprises Non-wage income gains Surprising capital gains 15% rate? Amnesty surprises WY refers to 80s problems 11/24/2018

Military and Security Spending DOD Prime Contracts (213b US) 2004 2003 2001 California 27.9 28.7 19.9 Virginia 23.5 20.0 18.4 Texas 21.0 22.9 9.5 Maryland 9.2 7.6 5.0 Connecticut 9.0 8.0 4.3 Arizona 8.4 7.5 4.9 Florida 8.4 8.1 6.7 11/24/2018

BRAC Losers Winners Connecticut Maryland Maine Georgia Alaska Texas South Dakota Colorado New Jersey Oklahoma Missouri Arkansas Kentucky Kansas New Mexico Alabama Illinois Indiana September 8 – list to Bush 11/24/2018

Exports as % of GSP, 2001 11/24/2018

Forecast: Housing Starts 11/24/2018

Forecast: Top States Housing Starts 2005 Florida 248,000 California 184,000 Texas 171,000 Georgia 106,000 North Carolina 97,000 Arizona 94,000 11/24/2018

Housing Affordability in 2004 11/24/2018

Average Household Income Growth 2005 – 2010 11/24/2018

Where are the Bubbles? 11/24/2018