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Montgomery County Chamber of Commerce November 13, 2013 The Outlook for the U.S. and Washington Area Economies In 2013 and Beyond Stephen S. Fuller, Ph.D.

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Presentation on theme: "Montgomery County Chamber of Commerce November 13, 2013 The Outlook for the U.S. and Washington Area Economies In 2013 and Beyond Stephen S. Fuller, Ph.D."— Presentation transcript:

1 Montgomery County Chamber of Commerce November 13, 2013 The Outlook for the U.S. and Washington Area Economies In 2013 and Beyond Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Director, Center for Regional Analysis George Mason University

2 The U.S. Economy: Recent Performance and Outlook

3 The National Economic Climate Four Years Into the Recovery Head Winds The sequester Weaker growth in emerging markets is hurting manufacturing (exports) Business is cautious re: hiring and capital spending The Sequester and Shutdown $85b reduction in budget authority $44b in actual spending reductions in FY 2013 $66b in spending reductions in calendar year 2013 Spending cuts lag cuts in budget authority

4 The National Economic Forecast Sequester and payroll tax increases in January may reduce overall GDP growth in 2013 by 1 percentage point. DoD spending down 7% in 2013; up 0.8% in 2014 Non-DoD spending down 5.9% in 2013; up 0.4% in 2014. Sequester replaced in FY 2014 Budget agreement plus tax increases (caps on deductions) and entitlement reductions beginning in January 2014. GDP in 2013 = 1.5%; in 2014 = 2.5% GDP in 2015 = 3.2%

5 Annual Change in Payroll Jobs – US Month-Over-Year (000s) Oct = + 2.3 M Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

6 U.S. Payroll Job Change by Sector Oct 2012 – Oct 2013 (000s) Total = 2,329 Ranked by Size in 2013 Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis

7 U.S. Payroll Job Change by Sector Sep 2013 – Oct 2013 (000s) Total = 204 Ranked by Size in 2013 Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis

8 U.S. Unemployment Rate Source: Bureau of Labor Statistics (Seasonally Adjusted), IHS Global Insight October 8, 2013 Oct = 7.3 % GI FCST 13 – 7.5 14 – 7.1 15 – 6.5 16 – 6.0 17 – 5.7 18 – 5.4

9 U.S. Gross Domestic Product Quarterly Change: 2007 – 2015 % Forecast > > > > Source: Bureau of Economic Analysis, Global Insight October 8, 2013

10 Federal Spending Trends in the Washington Area

11 2010 Structure of the Greater Washington Economy Local Serving Activities 34.8% Non-Local Business 12.0 % Total Federal 39.8% Procurement 19.1% Assn 1.8% Hosp. 2.1% Int’l 3.5% Other 1.5% Other Federal 10.7 % Health/Ed. 4.5% Fed Wages & Salaries 10.0% Source: GMU Center for Regional Analysis

12 Federal Procurement in the Washington Metro Area, 1980-2012 $ Billions | | TOTAL = $1,023.5 Billion Source: US Census, Consolidated Federal Funds Report 2011 $80.0 B $75.6 B 2012

13 Professional & Business Services Washington MSA (000s) Annual Data Annual Month over Year 2008 2009 2010 2011 2012 2013 Tot 2012 = 702,300 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

14 Federal Employment in the Washington Metro Area, 1950-2012 000s Eisenhower Kennedy – Johnson Nixon - Ford CarterReaganBush 1ClintonBush 2 - 5 + 74 + 35 + 170-8.6 - 37 + 24 Obama +17.5 Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

15 Federal Government Washington MSA (000s) Annual Data Annual Month over Year 2008 2009 2010 2011 2012 2013 Tot 2012 = 377,400 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

16 Summary for Federal Spending Trends in the Washington Metropolitan Area, 2010-2013 Federal procurement outlays declined 8.4% between FY 2010 and FY 2012 and are projected to decline 5.0% during FY 2013. Federal employment has declined by 13,600 or by 3.5% in 24 months between July 2011 and 2013. Federal payroll declined by 0.6% between FY 2010 and FY 2011, was flat during FY 2012 and is projected to decline by $2 billion in FY 2013; it will continue to decline slowly as the workforce shrinks (-16,100 federal jobs between 2013 and 2017) and as older workers retire and are replaced by younger workers.

17 Federal Budget Trends and Outlook (dollars in billions) YearAnnual % ChangeBudget Deficit 20086.8 - $454.8 20095.7 -1,415.7 20104.3 -1,294.2 2011 - 2.6 -1,296.8 2012 - 1.4 -1,089.2 2013 - 4.9 - 701.0 2014 0.3 -730.7 2015 - 0.6 - 644.4 2016 - 1.2 -596.7 2017 - 0.6 - 638.5 2018 - 0.4 - $670.6 Source: IHS Global Insight “US Executive Summary” October 8, 2013

18 Federal Spending Trends in the Washington Metropolitan Area: 2010-2017 (in billions of current dollars) Year GRP %Change* Fed $s % GRP Procurement 2010 $425.0 3.0 $169.0 39.8 $82.5 2011 433.7 2.6 168.2 38.8 80.0 2012 447.9 2.4 165.6 37.0 75.6 2013 466.9 2.1 162.7 34.8 71.8 2014 489.8 3.0 161.1 32.9 70.0 2015 517.2 3.6 162.7 31.4 69.3 2016 544.1 3.3 164.3 30.2 69.0 2017 $ 571.8 3.2 $166.8 29.2 $68.6 *real (inflation adjusted) percent change Source: GMU Center for Regional Analysis

19 The Washington Economy: Recent Performance and Outlook

20 Annual Job Change Washington MSA, 2002-2013 (000s) Annual Data Annual Month over Year 2009 2010 2011 2012 2013 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

21 WMSA Payroll Job Change: Private Sector The Great Recession and Recovery To Aug 2013 (000s) Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Total -131Total 165

22 Washington Metropolitan Area Job Change by Wage Category between 2008 to 2013 Sources: EMSI Total Employment, 2013.3 & GMU Center for Regional Analysis

23 15 Largest Job Markets Job Change: Aug 2012 – Aug 2013 (000s) Washington +33,400 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

24 Job Change by Sector Aug 2012 – Aug 2013 Washington MSA (000s) Total = 33,400 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

25 Job Change by Sector Jul 2013 – Aug 2013 Washington MSA (000s) Total = -26,500 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

26 Annual Job Change District of Columbia, 2002-2013 (000s) Annual Data Annual Month over Year 2009 2010 2011 2012 2013 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

27 Job Change by Sector Jul 2013 – Aug 2013 District of Columbia (000s) Total -13,800 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

28 Annual Job Change Suburban Maryland, 2002-2013 (000s) Annual Data Annual Month over Year 2009 2010 2011 2012 2013 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

29 Job Change by Sector Jul 2013 – Aug 2013 Suburban Maryland (000s) Total -1,800 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

30 Annual Job Change Northern Virginia, 2002-2013 (000s) Annual Data Annual Month over Year 2009 2010 2011 2012 2013 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

31 Job Change by Sector Jul 2013 – Aug 2013 Northern Virginia (000s) Total -5,800 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

32 8.5 – DC 7.3 – U.S. 5.9 – SMD 5.4 – MSA 4.4 - NVA Unemployment Rates in the WMSA By Sub-State Area, 2006-2013 Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US – Seasonally Adjusted)

33 Job Growth in the Washington Metropolitan Area: 2012 - 2017

34 Washington Metropolitan Area Gross Regional Product, 2012-2022 (in billions of 2005$s) Region 2012 Share 2022 Share % Change Metro $386.3 100.0 $513.5 100.0 32.9 District 92.1 23.8 114.5 22.2 23.7 SubMD 110.6 28.6 145.9 28.4 32.0 NoVA 182.5 47.2 251.1 48.9 37.6 __________________________________________ Source: IHS Global Insight, GMU Center for Regional Analysis The Washington metropolitan area includes Jefferson County, WV and is included in the total GRP values.

35 Washington Metropolitan Area and Suburban Maryland, Change in Jobs, Summary: 2012-2017 2012 – 2017 YearTotal JobsNet New (% Change) Replacement (% Change) Openings (% Change) 2012 3,927,775 2012 – 2017 4,291,969 364,194477,530841,724 9.3%12.2%21.4% Sub-MD 2012 – 2017 1,293,974 1,377,577 83,583163,507247,090 6.5%12.6%19.1% Sources: EMSI Total Employment - 2013.2, GMU Center for Regional Analysis

36 Suburban Maryland Change in All Jobs, 2012 – 2017 Occupation 2-Digit SOC Net NewReplacements Business & Financial 11,999 9,668 Healthcare (All) 11,980 8,974 Personal Care & Service 8,730 7,479 Sales & Related 7,361 25,665 Building & Grounds Maint. 7,119 5,321 Food Prep & Serving 6,767 14,846 Educ., Training & Library 5,532 8,233 Management Occupations 4,988 11,360 Arts, Design, Entertainment 3,476 5,976 Construction & Extraction 3,079 8,117 All Others 12,552 57,868 Totals, All 83,583 163,507 Sources: EMSI Total Employment - 2013.2, GMU Center for Regional Analysis

37 Suburban Maryland Major Sources of Net New Jobs, 2012 – 2017 Sources: EMSI Total Employment - 2013.2, GMU Center for Regional Analysis * % Total of All Net New Jobs 5-Digit SOCNet New% Total% Change Business & Financial 11,99914.412.4 Personal Financial Advisors 3,22026.831.5 Management Analysts 3,07625.616.8 Accountants & Auditors 9918.37.2 Business Ops Specialists 9417.87.6 Healthcare (All) 11,98014.312.7 Home Health Aides 2,67722.330.4 Registered Nurses 1,75414.613.0 Nursing Aides,Orderlies 1,40511.712.6 Massage Therapists 5894.920.9 All Others 59,60471.31.9 Total 83,583100.06.5

38 Suburban Maryland Major Sources of Net New Jobs, 2012 – 2017 Sources: EMSI Total Employment - 2013.2, GMU Center for Regional Analysis * % Total of All Net New Jobs 5-Digit SOCNet New% Total% Change Personal Care & Service 8,73010.414.2 Personal Care Aides 2,08923.925.4 Hairdressers Cosmetologists 1,43616.420.0 Childcare Workers 1,14013.17.8 Fitness Trainers & Instructors 6497.416.9 Sales & Related 7,3618.84.5 Real Estate Sales Agents 3,83752.112.6 Financial Services Agents 2,03527.627.8 Real Estate Brokers 7259.811.8 Cashiers 4856.61.8 All Others 67,49280.76.5 Total 83,583100.06.5

39 2017 Structure of the Greater Washington Economy Local Serving Activities 37.8% Non-Local Business 16.2 % Total Federal 29.2% Procurement 12.0% Assn 1.9 % Hosp. 2.6% Int’l 3.9% Other 1.5% Other Federal 9.7 % Health/Ed. 7.0 % Fed Wages & Salaries 7.5 % Source: GMU Center for Regional Analysis

40 Thank You Questions cra.gmu.edu

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