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

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Presentation on theme: "John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP"— Presentation transcript:

1 John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP
Inland Empire Forecast . . . John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

2 U.S. Jobs At A Record Level

3 Add Potential Workers: Given Up Or Part Time
18.0% Add Potential Workers: Given Up Or Part Time 10.6% 8.0% 4.1%

4 Inflation Worry 3.9% 2.9%

5 Q3 Balance Sheet … Raise Long Term Rates
Interest Rates: 3-4 Short Term Rate Increases Fed Selling Off Q3 Balance Sheet … Raise Long Term Rates 5.0%?? 4.60% 2.91%

6 Yield Curve: Potential Recession Predictor
2 Year to 10 Year 0.41%

7 California Job Gains/Losses

8 Inland Empire Population
Greater Than 25 of 50 States

9 Inland Empire’s Powerful Job Growth!
Percent 2017 above 2007 I.E CA US 12.2% v. 8.8% v. 6.4% Confession Forecast: 46,600 jobs 3.3% % Unemployment Actual: ,433 Jobs 3.5% % Unemployment

10 Job Quality

11 Job Growth by Region 2nd Largest 2017 Absolute Job Gain in CA!

12 Inland Empire Growth Fastest 2017 Job Growth Rate in CA!

13 Unemployment Rates

14 Poverty 25.0% 17.5% 19.3% 14.5%

15 Educational Challenge
47.1% 45.7% 27.8% 29.8%

16 $ Payroll Spent $ Payroll Spent Moon Mining Corp. $ Payroll Paid

17 ACA Impact Health Care Demand & Quality of Life -60% Drop in Uninsured

18 Residents Per Health Care Worker
+26.0% More People 33.5 26.6 Sources: Department of Finance, Demographic Research Unit; CA Employment Development Department

19 Health Care Job Growth Strongest High Paying Sector 2011-2017
10.3% of Job Growth

20 Median Health Care Pay: 2017
$60,768

21 2018 Forecast: ACA Unknowns

22 E-Commerce 1.1% 9.1% 15.5%

23 Port Container Volumes Record Levels

24 Net Industrial Absorption
21.9 million

25 Industrial Vacancy Rate
3.9%

26 Industrial Rates & Vacancies
Lease Rates Per Square Foot Per Month Inland Empire $ % Ventura $ % Los Angeles $ % Orange $ % San Diego $ % Source: CB Richard Ellis

27 Construction Locations

28 Industrial Lease Rates
Up 22.1% Up 76.7%

29 ONT Airport Cargo Record Volume 18.6%

30 Logistics Job Growth Without Logistics growth, IE would still be in Recession 23.3% of Job Growth

31 Disappearing Available Space For Facilities
Market  500,000+ 1,000,000+ High Desert 206 42 Coachella Valley 92 21 Moreno Valley/Perris 117 59 West SB Valley 45 12 Central SB Valley 49 9 East SB Valley 16 1 Southwest 15 Pass Area 23 7 Western RivCo Edge 13 3 Riverside 5 Total Remaining  581 157 Without Deserts, Moreno Valley/Parris 166 35

32 Median Logistics Pay: 2017 $46,708

33 Educational Requirement for Position
Skill Ladders Based on Education for Position Median Pay Warehousing, Inland Empire 2017 Educational Requirement for Position  Experienced All Workers Entry Level Share of Jobs Work Experience, Plus Bachelor's or Higher $65.84 $47.81 $32.96 7.7% Bachelor's Degree $36.54 $28.98 $23.04 6.3% Work Experience $30.56 $24.02 $18.88 4.8% Associates Degree $33.66 $26.16 $20.62 1.2% Post-Secondary Vocational Education $40.83 $28.45 $22.64 4.7% Long-Term On-the-Job Training $32.21 $24.78 $18.97 5.7% Moderate-Term On-the-Job Training $34.25 $24.49 $17.72 26.9% Short-Term On-the-Job Training $19.65 $15.12 $12.21 42.8% Wholesale Trade Sector $30.59 $22.75 $17.26 100.0% No Schooling After High School $26.09 $19.47 $14.94 80.1% Trade or Community College $39.39 $27.99 $22.24 5.9% Bachelor's Or More $52.69 $39.36 $28.51 14.0%

34 2018 Forecast: Space v. Regulators

35 U.S./CA Manufacturing Job Growth

36 CA Electrical Cost +71.3% +123.4% +147.6%

37 Marijuana?

38 Manufacturing Job Growth
4.5% of Job Growth

39 Median Manufacturing Pay
$51,385

40 2018 Forecast: Tariffs & CA Policy

41 Home Volume

42 Home Prices FHA Conforming Loan Limit: $405,950 LA/OC is $679,650
+3.7% -10.2%

43 Price Competition Highest Price Gaps In History

44 New Home Inventory

45 Notices of Default

46 Apartment Rates/Vacancy, 2018
Inland Empire $1, % Los Angeles $1, % San Diego $1, % Orange $1, % Source: USC Lusk Center For Real Estate

47 Construction Job Growth
12.4% Of Job Growth

48 Median Construction Pay: 2017
Best Paying Blue Collar Sector $52,604

49 2018 Forecast: Supply v. Demand

50 BA or Higher 21.4%

51 14 Inland Cities Better Educated Than At Least One Coastal Counties

52 Office Market Absorption
461,093

53 Office Market Vacancies
E-Commerce Hurts Market 24.2% 9.7%

54 Office Lease Rates Down -4.2% Up 17.4%

55 ONT Airport Passengers
Level 12.4%

56 Professionals & Mgmt, Higher Education Mining, Utilities, Information
1.4% of Job Growth

57 Median High-End Pay $73,279

58 2018 Forecast: Competitive Disadvantage

59 Federal, State, Local Government
-1.2% of Job Growth

60 Median Government Pay: 2017
$61,185

61 2018 Forecast: E-Commerce v. Pop. Growth

62 Retail Rate/Vacancy Jun-2018
Inland Empire $ % San Diego $ % Ventura $ % Orange $ % Los Angeles $ % Source: CB Richard Ellis

63 Population Serving & Tourism Sectors
41.2% of Job Growth

64 Median Modest Pay $30,652

65 2018 Low Paying Forecast: E-Commerce v. Pop. Growth

66 Forecast

67 2018 Forecast By Sector: 45,000 New Jobs

68 Inland Empire’s Job Growth Still Strong!
YTD 2018 = 50,380 3.1%

69 2018 Look Ahead Trump Impacts Hit This Year – Tariffs, Tax Cut, ACA
Health Care Strong But Still Facing ACA Assaults Other High-Paying Sectors Remain Weak Logistics Continued Strength Due To Record Imports and E-Commerce Manufacturing Strong U.S. Environment Not in CA, Tariff Impact? Construction Strengthening Residential Market Growing But Hurt By FHA Rules Industrial Construction Strong With Logistics Office Market Weak Due to E-Commerce & Vacancy Levels Brick & Mortar Retailers Under Threat from E-Commerce 45,000 New Jobs 3.1% Growth 4.7% Unemployment Rate

70


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