1. John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Economic Growth... Building An Expansion

2. After Losing 8.71 Million Jobs … U.S. Jobs All The Way Back & More

3. Petroleum Prices

4. Value of the Dollar

5. Consumer Confidence, 2009-2015

6. Confidence & Home Sales

7. Interest Rates Remain Benign

9. U.S. & CA Unemployment History Great Recession 5.6% 6.9%

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. Highest Unemployment Rates Major U.S. Metro Areas

13. Where Is the IE In Its Job History? 2011-2014 139,767 of 142,933 lost or 98.8% 3,167 Jobs To Go

14. Primary Tier Secondary Tier Economic Development … Increase The Economic Base! How Regional Economies Work

15. Construction & Real Estate: Real Hope

16. Share of Underwater Homes Plunging

17. Notices of Default At Low Levels (1,066 in January 2014)

18. Investor Purchases of Foreclosed Homes

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

20. Long Term Competitive Price Advantage Still Exists

21. Affordability to Median Income Household I. Empire L.A./SD Orange.

22. Home Sales Volume Stagnant

23. Credit standards on mortgage loans that your bank categorizes as GSE-eligible residential mortgages have All RespondentsLarge BanksOther Banks BanksPercentBanksPercentBanksPercent Tightened considerably000000 Tightened somewhat11.60013.1 Remained basically unchanged5484.42681.32887.5 Eased somewhat914.1618.839.4 Eased considerably000000 Total641003210032100

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

25. Permits: Some Hope

26. The Future: Survey of 1,600 Millennials 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

27. Why Low Volume Less Foreclosures Buyers Want or Need High Prices Credit Hurt By Foreclosures High FICO Scores FHA Lowering 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 Mortgage Requirements

28. Construction Job Growth! Median Pay $51,923

29. Why Home Construction’s Return Is Important Jobs Lost 2007-2011: -67,783 Job Gain 2012-2014: 17,892 Job Deficit: -49,892

30. Logistics Flow of Goods

31. Strong Industrial Space Absorption

32. Industrial Construction

33. Port Container Volumes Strike Impact -21.6% -26.1%

34. Fulfillment Centers

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

36. Logistics Job Growth & Why It Is Important 19.3% of New Inland Jobs in 2013 20.0% of New Inland Jobs in 2014 Median Pay $43,911

37. Manufacturing: Should Be A Major Growth Source

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

40. Manufacturing Some Recovery Median Pay $49,138

41. Regulatory Instability Destroying CA Blue Collar Sectors

42. Nestle to close Valley food Plant 360 California jobs will be lost as Hot Pockets production goes to Kentucky “In higher skilled industries they are hesitant to move because the labor force is not available anywhere. But lower- skilled one, they have an easier time leaving. That trend in California has the potential to leave lower-educated workers behind. BUSINESS Thursday, August 7, 2014 LATIMES.COM/BUSINESS ::

43. d. Spreads of loan rates over your bank's cost of funds (wider spreads=tightened, narrower spreads=eased) All RespondentsLarge BanksOther Banks BanksPercentBanksPercentBanksPercent Tightened considerably000000 Tightened somewhat22.912.713 Remained basically unchanged4158.62259.51957.6 Eased somewhat2738.61437.81339.4 Eased considerably000000 Total701003710033100 Commercial Industrial Loans Under $50 Million

44. Beware EPA-CARB-AQMD Standards Eliminating Ability of Blue Collar Sectors to Grow: Manufacturing (Not Growing) Logistics (Prime New Target) Construction (NIMBY’s Love CEQA) Blue Collar Sector Growth Needed To Allow Marginally Educated To Access the Middle Class Poverty is Exacerbated as a Result!

45. EPA & CARB SPONSORED 2015 SCIENTIFIC REPORT... TRUCKS NO LONGER A MAJOR PUBLIC HEALTH THREAT! 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

46. Skilled Workers Skilled Workers Migrate Inland For Better Homes

47. Higher End Homes $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

48. Migration of Educated Workers

49. Office Absorption Follows Higher-End Workers High-End Jobs Follow Workers into the Area

50. Office Vacancy Rates Improving But Still Very High 17.0% 24.0%

51. High-End Job Growth Median Pay $55,308 Median Pay $65,904

52. Primary Tier Secondary Tier How Regional Economies Work

53. 2014 Retail Sales Head For 6.1% Above Pre-Recession Peak 15.2% Inflation

54. Where Is the IE In Its Job History? 2011-2014 139,767 of 142,933 lost or 98.8% 3,167 Jobs To Go

55. Job Growth By Market Area, June 2013-2014

56. Forecast: Review 2015 Better Than 2014 Construction Returning Logistics Strong Manufacturing Modest Health Care Set To Take-Off Office Sectors Modest Pop. Related Group Gaining Education Growing Government Crawling Unemployment Drops to 7.9% Growth Looking Normal 3,167 Jobs Below Pre-Recession

57. www.johnhusing.com