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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
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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%)
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U.S. & CA Unemployment History
Prime Rate: 21% Cold War Ends Great Recession
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California Job Gains/Losses
-1,066,400 +1,320,415 2014 Up +254,015 Recovery Dot.Com Defense Cutbacks Great Recession
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Highest Unemployment Rates U.S. Metro Areas
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Unemployment Falling, But High
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Inland Empire
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How Regional Economies Work
Secondary Tier Economic Development … Increase The Economic Base! Primary Tier
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Three Step Growth Process Based On Interaction Of:
Population Preferences Dirt Prices Force Decisions
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Southern California Population Growth, 2000-2012
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People Prefer To Live Near The Coast
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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
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Importance of Blue Collar Sectors
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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
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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
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Construction & Real Estate: Finally Some Hope
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Share of Underwater Homes Plunging
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Direct Investor Purchases of Foreclosures
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Notices of Default At Low Levels
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Home Price Trends 2014 39.8% 71.3% 40.9% Above Existing Home -34.7%
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Long Term Competitive Price Advantage Still Exists
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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
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Volume Stagnant
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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
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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
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Permits: Finally A Little Hope
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Construction & Mining Job Growth
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Assessed Valuation Finally Growing (6.1% for SB County)
6.3% Inflation
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Firms Prefer The Coastal Counties
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Stage 2: Strong Industrial Growth
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Industrial Construction
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Logistics Flow of Goods
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Port Container Volumes
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Fulfillment Centers
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E-Commerce Growth Rates Year Over Year by Quarter
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Job Growth: Logistics 18.8% of All Inland Jobs … During 2013
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Manufacturing: Could Be A Major Growth Source
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U.S. v. California Manufacturing Jobs
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Job Growth: Manufacturing
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Health Care
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Inland Empire Underserved
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Meeting Standards of Care
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Public Health Factor Rankings of 58 Counties, 2014
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Health Care Demand Set To Explode
Inland Health Care Workers Handle More People Than CA (28%) People Without Health Insurance (2012) ,431 (19%) People Will Age, Already Those 55 & Over ,696 (21%) Population Growth Will Resume ( ) 1,075,807 (33%)
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Job Growth: Health Care
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Stage 3.-Office Based Firms Follow Their Workers
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Skilled Workers Migrate Inland For Better Homes
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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
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Office Absorption Finally Starting to Recover
High-End Jobs Follow Workers into the Area
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Office Vacancy Rates Improving But Still Very High
24.0% 17.9%
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Growth: Office Based Jobs
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How Regional Economies Work
Secondary Tier Primary Tier
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Retail Sales Almost Back
13.7% Inflation
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Job Growth: Population Serving & Lower Paying
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Where Will IE Be In Its Job History?
81,733 of 143,108 lost or 57.1% 121,833 of 143,108 lost or 85.1% 21,275 Jobs To Go 33,839
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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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