1. John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Prosperity... What’s It Beginning to Feel Like!

2. After Losing 8.71 Million Jobs … U.S. Jobs Long Slow Growth - Not Over-Heating

3. Petroleum Prices Helps Families In Modest Income Areas

4. Value of the Dollar: Helps Imports & Hurts Exports

5. Consumer Confidence, 2009-2015 Needed To Help Homes Sales

6. Confidence Helps Home Sales

7. Interest Rates Remain Benign Encourages Home Sales

9. California Wage & Salary Employment: A Record Level

10. California Job Gains/Losses 2008-2010 -1,066,400 Great Recession 2011-2014 +1,301,708 2014 Up +401,217 37.8% Up Recovery

12. Greg Devereaux Chief Executive Officer San Bernardino County

13. Jay Orr Chief Administrative Officer, Riverside County

14. Very Rapid Job Growth: 2 Straight Years! 2011-2014 Gained Back 139,767 of 142,933 lost or 98.8% 3,167 Jobs To Go 40,100

15. Inland Empire Growth was the 2 nd Largest Absolute Job Gain in California in 2014!

16. IE Job Growth Rate Ranked 3 rd after the Bay Area in 2014

17. IE Unemployment Rate: Closing In on the National Level 7.3% 6.1%

18. Gold Mine Theory Primary Tier Secondary Tier

19. High-End & Office Based Jobs Film & CommercialsEngineeringLegal & Accounting Police & FireHealth CareScience & Information

20. Higher End Homes Draw Well Educated Workers $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 $357,037$345,243 Loma Linda

21. Migration of Educated Workers

22. Still Relatively Low Share of BA or Higher

23. Office Absorption Follows Higher-End Workers High-End Jobs Followed Workers into the Area

24. Office Vacancy Rates Improving But Still Very High 15.8% 24.0%

25. Office Space Ratio to Population 4.3 million people are Professionally Under-Served More educated workers will cause more firms to migrate

26. Professionals, Mgmt., Utilities, Information, Mining Slowly Coming Back -9,700 Median Pay $55,308 Down -5,600 +4,100

27. Films & Commercials

28. Economic Impact of Film Production

29. Film Projects

30. Health Care

31. Inland Empire Underserved by Health Care Workers 27.7% More People Per Health Care Worker in 2014 36.5% More People Per Health Care Worker in 2010

32. Who Will Health Care Workers Serve? 27.3% 22.0%

33. Who Will Health Care Workers Serve?

34. Health Care Jobs: Continuous Growth +6,700 +17,400 Up +24,100 Median Pay $57,443 2013-2014 Growth of 4,000 Jobs Physicians Other Ambulatory Care Hospitals Residential Care 1,2001,50001,300 4.4%4.7%0.0%5.6%

35. Logistics Flow of Goods

36. Sophisticated Warehousing Operations

37. Port Container Volumes Soaring Even With Labor Slowdown

38. Fulfillment Warehousing

39. E-Commerce Growth Rates Year Over Year by Quarter

40. Industrial Vacancy Rate Recovering Everywhere! 4.5% Inland Empire 2.7% 12.8% 4.5% 6.7% San Diego 7.0% 12.0% 6.7% 2.7% Orange Co. 5.4% 6.5% 2.7% 1.9% L.A. Co. 2.1% 3.2% 1.9% 2014Q4 2005/2006 2009Q3 2014Q4

41. Industrial Construction 2014 IE Net Absorption: 16.1 million Sq. Ft.

42. Inland Empire Logistics Jobs IE’s Major Competitive Advantage -11,100 +31,200 Up +20,100 Median Pay $43,911

43. Logistics Incredibly Important To Inland Empire’s Economic Health 2012: 25% of New Jobs 2013: 19% of New Jobs 2014: 20% of New Jobs Remember: Every Gold Mine Job Also Funds Another Secondary Tier Job

44. PM 2.5: Diesel Pollution

45. EPA & CARB SPONSORED 2012-2015 SCIENTIFIC STUDY... Truck Pollution Disappearing! 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 Health Effects Institute dgreenbaum@healtheffects.org 617-488-2331

46. Manufacturing: Should Be A Major Growth Source

47. California Manufacturing Job Growth Just 2.8% of U.S. Growth

49. Manufacturing Orders Rising

50. CA Is Not Loved By Executives & Entrepreneurs

51. Inland Empire Manufacturing Jobs -38,300 +5,100 Down -33,200 Median Pay $49,138

52. Future of Manufacturing Requires Logistics No Where Every Where

53. Construction: Finally Coming Back

54. Notices of Default At Low Levels (1,066 in January 2014) Negative Equity Has Dropped 4 th Quarter 2009-2014 54.9% to 14.8%

55. Home Price Trends 71.0% 38.4% Above Existing Home -31.0% 2014,

56. Long Term Competitive Price Advantage Still Exists $176,000 $183,000 $373,000

57. Affordability to Median Income Household I. Empire: 47%-53% LA/SD: 27%-73% Orange: 21%-79%

58. Home Sales Volume Stagnant

59. Inland Empire’s In-migration From Coastal Counties Has Stopped -25,258 Left Area -3,608 per year Not Bringing Skills, Wealth, Income & Spending

60. Mortgage Credit Still Tight Percentage of closed loans with an average FICO score below 700 dropped: 32% in January 2014 30% percent in January 2015 Average FICO all loans was 731 up 5% from the 2014 average

61. The Future: Survey of 1,600 Millennials Long Term Goals 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

62. Why Low Volume Less Foreclosures Sellers Want or Need High Prices Buyer Credit Hurt By Past Foreclosures High FICO Scores FHA Lowered 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 FICO & Down Payment Requirements New Homes: $372,202

63. Construction Jobs: Finally Growing Along Way From Healthy -68,400 Still Down -50,500 Median Pay $51,923 +17,900

64. Financial Sectors, Slow Comeback -11,600 Still Down -8,800 Median Pay $48,010 +2,800

65. Local Government

66. Retail Sales, Record Levels (Sort of) +$4.2 Billion +6.9% With 15.2% Inflation -8.3% Less Purchasing Power Riv Co. up 8.0% above prior peak SB Co. up 5.8% above prior peak

67. Assessed Valuation Coming Back -4.5% With 7.7% Inflation -12.2% Less Purchasing Power (Riv Co. 2014: 7.7%; -6.3% below peak) (SB Co. 2014: 6.2%; -2.2% below peak)

68. Local, State, Federal Job Base Still Struggling! -7,300 +700 Median Pay $57,917 Down -6,600

69. Ontario International Airport Shrinking This Needs A Solution! Population & Job Base Have More Than Doubled Since 1986

71. Educational Challenge For Adults & Their Children Time To Stop Talking & Do Something About This!

72. Education Sector: Innovation & Working Together Chaffey College: Only federal grant in CA for manufacturing training Cal State Grant 2 nd Highest Ranked of 57 Applications by Staff University of California, Riverside Loma Linda University Health Systems San Bernardino County Superintendent of Schools Riverside County Superintendent of Schools Coachella Valley, Palm Springs, and Desert Sands School Districts Crafton Hills College; San Bernardino Valley College Riverside Community College District; Riverside Community College AVID Inland Empire Economic Partnership Coachella Valley Economic Partnership Inland Valley Development Agency Kelly Space and Technology San Antonio Community Hospital; Redlands Community Hospital Bank of America Union Pacific Railroad Imperial Irrigation District California Steel Industries Cardenas Market County of San Bernardino Assembly Member Brown; Mayor Montanez, Corona Governor’s Innovation Awards: Announcement Tomorrow IEEP: Irvine Grant-Launch Initiative to move workers to Middle Class jobs

73. Public & Private Education Growing As Budgets Heal -1,800 +8,200 Up +6,400 K-12 Median Pay$41,557 Public Higher-Ed $60,465 All Private Schools$49,930

74. Gold Mine Theory Primary Tier Secondary Tier

75. Low Paying Job Growth Retail, Consumer & Bus. Services, Hotel, Eat & Drink Amusement, Agriculture, Employment Agency -44,900 +66,500 Up +21,600 Median Pay $28,475

76. 4,000 3,500 2,750 2,900 700 500 20,000 11,100 8,000 3,500 3,000 2,900 1,500 700 800 Low PayingLogisticsConstructionHealth CareEducationHigh PayingManufacturingGovernmentFin., Ins., R. Est. 2015 Forecast 2014 Actual Employment Forecast, 2015 Inland Empire, By Sector 21,100 10,600 7,000 2015 Forecast vs. 2014 Actual

77. Where Will IE Be In Its Job History? 3.9% Unemployment falls 8.1% to 7.6%

78. www.johnhusing.com