John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Economic Growth... Building An Expansion
After Losing 8.71 Million Jobs … U.S. Jobs All The Way Back & More
Petroleum Prices
Value of the Dollar
Consumer Confidence,
Confidence & Home Sales
Interest Rates Remain Benign
U.S. & CA Unemployment History Great Recession 5.6% 6.9%
California Job Gains/Losses ,066,400 Great Recession ,301, Up +401, % Up Recovery
Highest Unemployment Rates Major U.S. Metro Areas
Where Is the IE In Its Job History? ,767 of 142,933 lost or 98.8% 3,167 Jobs To Go
Primary Tier Secondary Tier Economic Development … Increase The Economic Base! How Regional Economies Work
Construction & Real Estate: Real Hope
Share of Underwater Homes Plunging
Notices of Default At Low Levels (1,066 in January 2014)
Investor Purchases of Foreclosed Homes
Home Price Trends 71.0% 38.4% Above Existing Home -31.0% 2014,
Long Term Competitive Price Advantage Still Exists
Affordability to Median Income Household I. Empire L.A./SD Orange.
Home Sales Volume Stagnant
Credit standards on mortgage loans that your bank categorizes as GSE-eligible residential mortgages have All RespondentsLarge BanksOther Banks BanksPercentBanksPercentBanksPercent Tightened considerably Tightened somewhat Remained basically unchanged Eased somewhat Eased considerably Total
Mortgage Credit Still Tight Percentage of closed loans with an average FICO score below 700 dropped: 30 percent in January percent in January 2014 Average FICO all loans was 731 up 5% from the 2014 average
Permits: Some Hope
The Future: Survey of 1,600 Millennials 66% want to live in the suburbs 24% want to live in rural areas 10% want to live in a city center Want to live in more space than they have now 81% want three or more bedrooms in their home
Why Low Volume Less Foreclosures Buyers Want or Need High Prices Credit Hurt By Foreclosures High FICO Scores FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000 Millennials Not Forming Families Fear Coming Help FHA Lowering PMI rate on conforming loans 1.35% to 0.85% Interest Rates Remaining Low FNMA & Freddie Mac Easing Mortgage Requirements
Construction Job Growth! Median Pay $51,923
Why Home Construction’s Return Is Important Jobs Lost : -67,783 Job Gain : 17,892 Job Deficit: -49,892
Logistics Flow of Goods
Strong Industrial Space Absorption
Industrial Construction
Port Container Volumes Strike Impact -21.6% -26.1%
Fulfillment Centers
E-Commerce Growth Rates Year Over Year by Quarter
Logistics Job Growth & Why It Is Important 19.3% of New Inland Jobs in % of New Inland Jobs in 2014 Median Pay $43,911
Manufacturing: Should Be A Major Growth Source
California Manufacturing Job Growth Just 2.8% of U.S. Growth
Manufacturing Some Recovery Median Pay $49,138
Regulatory Instability Destroying CA Blue Collar Sectors
Nestle to close Valley food Plant 360 California jobs will be lost as Hot Pockets production goes to Kentucky “In higher skilled industries they are hesitant to move because the labor force is not available anywhere. But lower- skilled one, they have an easier time leaving. That trend in California has the potential to leave lower-educated workers behind. BUSINESS Thursday, August 7, 2014 LATIMES.COM/BUSINESS ::
d. Spreads of loan rates over your bank's cost of funds (wider spreads=tightened, narrower spreads=eased) All RespondentsLarge BanksOther Banks BanksPercentBanksPercentBanksPercent Tightened considerably Tightened somewhat Remained basically unchanged Eased somewhat Eased considerably Total Commercial Industrial Loans Under $50 Million
Beware EPA-CARB-AQMD Standards Eliminating Ability of Blue Collar Sectors to Grow: Manufacturing (Not Growing) Logistics (Prime New Target) Construction (NIMBY’s Love CEQA) Blue Collar Sector Growth Needed To Allow Marginally Educated To Access the Middle Class Poverty is Exacerbated as a Result!
EPA & CARB SPONSORED 2015 SCIENTIFIC REPORT... TRUCKS NO LONGER A MAJOR PUBLIC HEALTH THREAT! 2007 Truck Engines: No Lifetime Cancer Risk 2007 Truck Engines: 90% End To NO 2 & PM 2.5 Emissions 2010 Engines: NO 2 & PM 2.5 “Substantially” Cut Further
Skilled Workers Skilled Workers Migrate Inland For Better Homes
Higher End Homes $585,199 $427,095 $484,914 UPLAND EASTVALE $468,269 $465,778 $459,000 CORONA $429,667 TEMECULA $344,095$393,603 $568,700 Claremont
Migration of Educated Workers
Office Absorption Follows Higher-End Workers High-End Jobs Follow Workers into the Area
Office Vacancy Rates Improving But Still Very High 17.0% 24.0%
High-End Job Growth Median Pay $55,308 Median Pay $65,904
Primary Tier Secondary Tier How Regional Economies Work
2014 Retail Sales Head For 6.1% Above Pre-Recession Peak 15.2% Inflation
Where Is the IE In Its Job History? ,767 of 142,933 lost or 98.8% 3,167 Jobs To Go
Job Growth By Market Area, June
Forecast: Review 2015 Better Than 2014 Construction Returning Logistics Strong Manufacturing Modest Health Care Set To Take-Off Office Sectors Modest Pop. Related Group Gaining Education Growing Government Crawling Unemployment Drops to 7.9% Growth Looking Normal 3,167 Jobs Below Pre-Recession