1. “In the Heart of the Storm” Cerritos College 11 th Annual Advisory Committee Member Recognition Breakfast Jack Kyser Sr. VP & Founding Economist, The Kyser Center for Economic Research, LAEDC Thursday April 30, 2009

2. The U.S., California & Southern California are in a Recession  How much longer will it last?  What type of recovery will we see?  Impact of Federal Stimulus & State Budget

3. Jobless Rates High & Rising Sources: BLS, CA EDD Percent Unemployed (SA)

4. Job Counts Dropping Fast Sources: Bureau of Labor Statistics, CA EDD

6. Source: BEA

7. U.S Housing Starts Are Down 000s of Dwelling Units Source: U.S. Census Bureau, forecast by LAEDC

9. Tracking Retail Sales Source: US Census Bureau Year-Over-Year % Change

10. Spot Energy Prices $/ Mcf $/Barrel Sources: EIA, Natural Gas Weekly Latest Month Plotted: Feb 2009

12. Interest Rates 4 th Quarter Averages %

13. U.S. Economic Growth % Change in Real GDP, Year-Over-Year Sources: BEA, forecasts by LAEDC

14. Risks to the Forecast  Upside: Lower energy prices/costs  Downside: Bank lending constraints The length and depth of the housing and automotive downturns “Fear”

15. Global Growth Retreats Annual % Change Source: IMF (Jan., 2009)

16. California Fundamentals Unemployment Rate Change in Nonfarm Jobs Year/Year (000s) Source: California Employment Development Dept. March 2009 NSA

17. Source: California Employment Development Dept; forecasts by LAEDC. 2009 Industry Winners and Losers--California Total Change: -447.5 Year-Year Change in Average Employment (000s)

18. Job Growth by Metro Areas Nonfarm Numerical Employment Change in Thousands March ’08 -’09 Sources: CA EDD, Labor Market Information Division

19. CALIFORNIA HOUSING MARKET

20. Source: California Association of REALTORS® Median Home Price--California Thousands of $ $247,590 February ‘09 Down -58.2% from May ’07 (peak)

21. Risks for the California Economy Local government finance Water supply Unfriendly business environment

22. Los Angeles County Fundamentals Unemployment Rate Change in Nonfarm Jobs Year/Year (000s) Source: California Employment Development Dept. March 2009

23. 2009 Industry Winners & Losers in Los Angeles County Sources: CA EDD, Labor Market Information Division; forecasts by LAEDC Total Nonfarm: -100.5 Jobs 1000’s

24. Some Industry Trends Los Angeles County

25. LA County Aerospace Industry Changing Defense spending priorities More orders for the C-17? Aging workforce No Change in Employment in 2009 Employment in Thousands Source: CA EDD, LMID

26. LA County Financial Services Industry New regulations Changed players in retail banking Letter Grade C- Employment in Thousands Source: CA EDD, LMID

27. LA County International Trade Recovery in 2010? New Port Facilities Environmental challenges Hungry competitors Letter Grade C- TEUs in Millions Sources: Ports of Los Angeles & Long Beach, forecasts by LAEDC

28. LA County Motion Picture/ TV Production Labor problems Run-away production A changing business model in broadcast TV Letter Grade B- Employment in Thousands Source: CA EDD, LMID

29. LA County Tourism Industry Business & international travel down New facilities in early 2010 Too many CVBs Letter Grade C+ Employment in Thousands Source: CA EDD, LMID

30. Housing Permits in Los Angeles County Sources: Construction Industry Research Board; forecast by LAEDC

31. Los Angeles County Housing Market Sources: RERC (DataQuick)

32. New Home Inventory New Home Inventory — LA County — Number of Unsold New Homes Source: RERC

33. Los Angeles County Apartment Vacancy Rates & Average Rental Rates Source: RERC % $

34. Office Vacancy Rates Los Angeles County By Area Percent vacant, quarterly averages Source: Grubb & Ellis Research Services 2009: Q1

35. Industrial Vacancy Rates Los Angeles County By Area Percent vacant, quarterly averages Year: Quarter Source: Grubb & Ellis Research Services 2009: Q1

36. Taxable Retail Sales in Los Angeles County Source: State Board of Equalization (BOE) %

37. Los Angeles County Employment Forecast Source: California EDD; forecast by LAEDC %

38. Risks for the LA County Economy No economic development strategy Government agencies frequently unfriendly to business A target for business raiders from other states Which industries changed due to the great recession?

39. Employment Trends in North Gateway Source: California Employment Development Dept (EDD) Total Employment in Thousands

40. Source: California Employment Development Dept (EDD) Industry Performance for the North Gateway Region Change in Employment by Industry from Q2 2007 to Q2 2008

41. Changed Industries: A Short List Autos: Dealers Local aftermarket industry Business Services: Advertising – shift in reaching consumers Entertainment: Change in broadcast TV International Trade/Logistics: “Near-shoring” – how real Retail:Squeezing out excess capacity Future of luxury/near-luxury segments

42. THANK YOU and STAY INFORMED Keep up with economic news and major developments by subscribing to e-EDGE, our free weekly economic newsletter. Check out the current issue at www.LAEDC.org