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USAA Real Estate CompanyCo-Investment Partners
The Current Performance and Outlook
for the U.S. and Washington
Metropolitan Area Economies
September 21, 2011
Metropolitan Area EconomiesStephen S. Fuller, PhD
Director, Center for Regional AnalysisSchool of Public PolicyGeorge Mason University
8
10
12
14
1975-Q1
1982-Q3
% Change in GDP
Recession Recovery Patterns of GDPPast Five Recessions
0
2
4
6
8
0 1 2 3 4 5 6 7 8
1982-Q3
1991-Q1
2001-Q4
2009-Q2
Quarters After Trough
% Change in GDP
Sources: BEA, GMU Center for Regional Analysis,
Quarterly GDPJuly 2011 Series Revisions vs. Original
-2
0
2
4
6>> FORECAST > > >
-10
-8
-6
-4
-2
2007-1 2 3 4
2008-1 2 3 4
2009-1 2 3 4
2010-1 2 3 4
2011-1 2 3 4
2012-1 2 3 4
2013-1 2 3
ORIGINAL
REVISED
Data through to Q2 2011 are original and revised from BEA.Estimates for Q3 2011 and beyond are from Global Insight, pre-July and post July BEA revisions
-2
0
2
4
6
U.S. Gross Domestic ProductQuarterly Change: 2007 – 2013
%Forecast > > > > > >
-10
-8
-6
-4
-2
2007-1 2 3 4
2008-1 2 3 4
2009-1 2 3 4
2010-1 2 3 4
2011-1 2 3 4
2012-1 2 3 4
2013-1 2 3
111.0
116.0
121.0
L.I.
U.S. Coincident and Leading IndicesNov 2006 – Jun 2011
RECESSION >
96.0
101.0
106.0
Nov-06
Feb-07
May-07
Aug-07
Nov-07
Feb-08
May-08
Aug-08
Nov-08
Feb-09
May-09
Aug-09
Nov-09
Feb-10
May-10
Aug-10
Nov-10
Feb-11
May-11
C.I.
U.S. Leading Index
468101214
2006 2007 2008 2009 2010 2011
-6-4-2024
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
45
50
55
60
65
ISM Manufacturing and Non-Manufacturing Indices
30
35
40
45 Mfg
N-Mfg
Annual Change in Payroll Jobs - US
-1000
1000
3000
THOUSANDS
Aug =+ 1.28 M
-7000
-5000
-3000
-1000
Source: BLS Establishment Survey, NSA
U.S. Job Change by SectorAug 2010 – Aug 2011
170
160
502
413
-352
Leisure & Hosp.
Retail Trade
Prof. & Bus. Svcs
Educ & Health Svcs
State & Local Govt
(000s) Total = 1,282Ranked by Size in 2010
-79
-110
82
94
93
17
-7
211
170
-600 -400 -200 0 200 400 600
Information
Federal Govt.
Transp. & Util.
Other Services
Wlse Trade
Construction
Financial
Manufacturing
Leisure & Hosp.
Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis
U.S. Job Change by SectorJuly 2011 – Aug 2011
2
-8
28
34
-15
Leisure & Hosp.
Retail Trade
Prof. & Bus. Svcs
Educ & Health Svcs
State & Local Govt
(000s) Total = 0Ranked by Size in 2010
-48
-2
-2
9
2
-5
3
-3
2
-100 -50 0 50 100
Information
Federal Govt.
Transp. & Util.
Other Services
Wlse Trade
Construction
Financial
Manufacturing
Leisure & Hosp.
Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis
400
450
500
550
600
650
700
Initial Claims for Unemployment4-Week Moving Average
414
200
250
300
350
400 414
Source: Bureau of Labor Statistics
7
8
9
10
11
U.S. Unemployment Rate
Aug = 9.1
%
GI FCST11 – 9.1
4
5
6
7
Source: BLS, Seasonally Adjusted
11 – 9.112 – 9.113 – 8.814 – 8.115 – 7.316 – 6.8
2
3
4
5
Consumer Prices2001 - 2015
Forecast > > > > > >
%
-1
0
1
2
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: BLS, Global Insight
4
5
6
7
8
Interest Rates2001 - 2015
Forecast > > > > > >
0
1
2
3
4Fed
30-Yr
Consumer Confidence
100
120
140
160
100
Expectations
20
40
60
80
Present Situation
Expectations
Source: Conference Board, GMU Center for Regional Analysis
Growth in Total Consumption Outlays
4.7
2.5 2.72.8
3.3 3.42.9
2.32.0 2.0 1.9 1.8 1.9
2.3
1
2
3
4
5
6%
Forecast > > > > >
-0.6
-1.9-3
-2
-1
0
1
Source: Global Insight, GMU Center for Regional Analysis
0
10
20
30
GDP
Residential Fixed
%
U.S. Economic Performance
-30
-20
-10
0Residential Fixed
Non-Res: Structures
State & Local
Federal
Bus. Inv.
Source: Global Insight
Economic Trends In The Washington Metropolitan AreaWashington Metropolitan Area
1500
2000
2500
3000
Population in the Washington MSABy Sub-State Area, 1900 - 2010
1000s
Northern VA
Suburban MD
0
500
1000
1500
D.C.
Source: US Census and GMU Center for Regional Analysis
35%
40%
45%
50%
Share of Washington Area Economy1970-2010
Northern Virginia
Suburban MD
10%
15%
20%
25%
30%
Suburban MD
D.C.
2.0%
4.0%
6.0%
Washington MSA Leading Economic IndexMonth-Over-Year Percent Change
-6.0%
-4.0%
-2.0%
0.0%
12-MonthMoving Average
0.0%
5.0%
10.0%
Washington MSA Coincident Economic IndexMonth-Over-Year Percent Change
-15.0%
-10.0%
-5.0%
0.0%
12-MonthMoving Average
36 3825
4461
7592
117
4156
71 6350
2340
80
120
160
Thousands
Annual Change in JobsWashington Metro Area
1991 - 2010
Avg. =
-53
-8
3625
1023
13
-50
11
-80
-40
0
40
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Avg. = 36,000
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis
50
100
150
000s
Annual Job Change – MOTYCWashington MSA
-100
-50
0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
20
40
60
80
000s
Annual Job Change – MOTYCDistrict of Columbia
-40
-20
0
20
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
20
40
60
80
000s
Annual Job Change – MOTYCSuburban Maryland
-40
-20
0
20
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
20
40
60
80
000s
Annual Job Change – MOTYCNorthern Virginia
-40
-20
0
20
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Professional and Business ServicesWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 681,200
Federal GovernmentWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 378,200
Education and Health ServicesWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 355,900
State & Local GovernmentWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 306,100
Leisure & HospitalityWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 264,100
Annual Job Change - RetailWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 258,900
Other ServicesWashington MSA
5
10
15
20
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 182,800
Annual Job Change - FinancialWashington MSA
5
10
15
20
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 143,800
Annual Job Change - ConstructionWashington MSA
0
5
10
15
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-30
-25
-20
-15
-10
-5
0
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 141,000
Annual Job Change - InformationWashington MSA
5
10
15
20
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 79,000
Annual Job Change - ManufacturingWashington MSA
5
10
15
20
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis Tot 2010 = 52,200
15 Largest Job MarketsJob Change July 2010 – July 2011
0
20
40
60
80
100(000s)
Washington – 7,900
-100
-80
-60
-40
-20
0
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeWashington MSA
20
40
60
80
000s Annual Data Annual Month over Year
2009 2010 2011
-80
-60
-40
-20
0
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeDistrict of Columbia
20
30
40
50
60
000s Annual Data Annual Month over Year
2009 2010 2011
-40
-30
-20
-10
0
10
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeSuburban Maryland
20
30
40
50
60
000s Annual Data Annual Month over Year
2009 2010 2011
-40
-30
-20
-10
0
10
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeNorthern Virginia
20
30
40
50
60
000s Annual Data Annual Month over Year
2009 2010 2011
-40
-30
-20
-10
0
10
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Job Change by SectorJuly 2010 – July 2011Washington MSA
1
-8
5
-3
8
Retail Trade
State & Local Govt
Educ & Health Svcs
Federal Govt.
Prof. & Bus. Svcs
(000s) Total -7,900
0
0
-3
-1
3
-5
-6
2
1
-20 -10 0 10 20 30
Transp. & Util.
Wlse Trade
Manufacturing
Information
Financial
Other Services
Construction
Leisure & Hosp.
Retail Trade
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Job Change by SectorJuly 2010 – July 2011District of Columbia
-1
-8
3
1
3
Retail Trade
State & Local Govt
Educ & Health Svcs
Federal Govt.
Prof. & Bus. Svcs
(000s) Total - 5,000
0
0
0
0
1
-2
0
-1
-1
-20 -10 0 10 20 30
Transp. & Util.
Wlse Trade
Manufacturing
Information
Financial
Other Services
Construction
Leisure & Hosp.
Retail Trade
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis
Job Change by SectorJuly 2010 – July 2011Suburban Maryland
-3
3
2
0
-3
Retail Trade
State & Local Govt
Educ & Health Svcs
Federal Govt.
Prof. & Bus. Svcs
(000s) Total - 4,800
0
0
-1
1
-1
0
-5
3
-3
-20 -10 0 10 20 30
Transp. & Util.
Wlse Trade
Manufacturing
Information
Financial
Other Services
Construction
Leisure & Hosp.
Retail Trade
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis
Job Change by SectorJuly 2010 – July 2011Northern Virginia
4
4
-1
-4
4
Retail Trade
State & Local Govt
Educ & Health Svcs
Federal Govt.
Prof. & Bus. Svcs
(000s) Total 700
-1
0
0
-2
0
-4
0
1
4
-20 -10 0 10 20 30
Transp. & Util.
Wlse Trade
Manufacturing
Information
Financial
Other Services
Construction
Leisure & Hosp.
Retail Trade
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis
6
8
10
12
14
11.3 – DC
9.3 – U.S.
6.4 – SMD
Unemployment Rate
0
2
4
66.4 – SMD6.0 – MSA4.6 - NVA
Source: BLS, Not Seasonally Adjusted
15 Largest Job MarketsRanked by Unemployment Rate
July 2011
8
10
12
14
16%
US9.3
6.0
0
2
4
6
Source: BLS, NOT Seasonally Adjusted
6.0
The Changing Role of the Federal Government
in the Washington Areain the Washington Area
2000 Structure of the Greater Washington Economy
Non-LocalBusiness14.4 %
Federal
Other Federal19.3%
LocalBusiness39.5%
Federal 31.3% Procurement
12.0%
Other 6.9%
Other: Health/Education,Media,Assns
2010 Structure of the Washington Area Economy
Non-LocalBusiness12.0 %
Federal
Other Federal15.7 %
Local ServingActivities36.6%
Federal 34.9% Procurement
19.2%
Other: Health/Education, Media
50
60
70
80
90
Federal Spending By Type1984 - 2009
$ Billions
0
10
20
30
40
Wages & Salaries
100
120
140
160
Total Federal SpendingWashington Metro Area, 1984-2009
Billions Current $
Total
0
20
40
60
80
Source: GMU Center for Regional Analysis
Procurement
50
60
70
80
90
Federal ProcurementWashington Metro Area, 1980 - 2009
$ Billions
|< 80-89 = $84 B > | < 90-99 = $191B > | < 00 – 09 = $519B > |
TOTAL = $794 B
0
10
20
30
40
50
Near-Term Economic Outlook for the Washington Metropolitan Areathe Washington Metropolitan Area
Economic Outlook (GRP) – 2015Washington Area and Sub-state Portions
(Annual % Change)
3
4
5
6
7%
DC
SMMSANV
-2
-1
0
1
2 DC
Source: GMU Center for Regional Analysis
Employment Change by
Sub-state Region (000s)
2008 2009 2010 2011 2012 2013 2014 2015
D.C.D.C. 10.1 10.1 --2.22.2 9.59.5 3.33.3 5.75.7 8.68.6 9.39.3 9.89.8
Sub. MDSub. MD --3.33.3 --25.125.1 --5.95.9 4.64.6 7.57.5 11.311.3 14.114.1 16.216.2Sub. MDSub. MD --3.33.3 --25.125.1 --5.95.9 4.64.6 7.57.5 11.311.3 14.114.1 16.216.2
No. VANo. VA 6.1 -23.0 8.7 15.7 17.1 19.6 21.5 22.1
REGION 12.912.9 --50.350.3 11.311.3 23.623.6 30.330.3 39.539.5 44.944.9 48.148.1
Average Annual Change 1990-2010 = 36,000
Source: BLS, GMU Center for Regional Analysis, 2009-2014 based on 2010 Benchmark data from BLS, Revised 8/26/11
2
4
6
8
%
GDP/GRP 2000 - 2015
Washington
-4
-2
0
2
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: Global Insight, GMU Center for Regional Analysis
U.S.
cra.gmu.educra.gmu.edu