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Economic Forecast, 2013-2017

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Noted economist Dr. Stephen Fuller Director, Center for Regional Analysis, GMU provides businesses with a look ahead at marketplace conditions.
32
Prince William Chamber of Commerce March 8, 2013 What Will the Washington Area’s and Prince William County’s Future Economies Look Like? Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Director, Center for Regional Analysis George Mason University
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Page 1: Economic Forecast, 2013-2017

Prince William Chamber of Commerce

March 8, 2013

What Will the Washington Area’s and Prince William County’s Future

Economies Look Like?

Stephen S. Fuller, Ph.D.Dwight Schar Faculty Chair and University Professor

Director, Center for Regional AnalysisGeorge Mason University

Page 2: Economic Forecast, 2013-2017

0 1 2 3 4 5 6 7 8 9 10 11 12 13 140

5

10

15

20

25

1982-Q31991-Q12001-Q42009-Q2

Quarters After Trough

% C

hang

e in

GD

P

Recession Recovery Patterns of GDPPast Four Recessions

Sources: U.S. Bureau of Economic Analysis, GMU Center for Regional Analysis

Page 3: Economic Forecast, 2013-2017

20012002

20032004

20052006

20072008

20092010

20112012

2013

-8000

-6000

-4000

-2000

0

2000

4000

Annual Change in Payroll Jobs – USMonth-Over-Year

(000s)

Jan =+ 2.05 M

Source: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 4: Economic Forecast, 2013-2017

U.S. Payroll Job Change by SectorJan 2012 – Jan 2013

InformationFederal Govt.

Transp. & Util.Other Services

ConstructionWlse Trade

FinancialManufacturing

Leisure & Hosp.Retail Trade

Prof. & Bus. SvcsState & Local Govt

Educ & Health Svcs

-600 -400 -200 0 200 400 60021

-43124

61102107107109

332213

467-31

429(000s) Total = 2,016Ranked by Size in 2011

Source: U.S. Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis

Page 5: Economic Forecast, 2013-2017

2007

-1 3

2008

-1 3

2009

-1 3

2010

-1 3

2011

-1 3

2012

-1 3

2013

-1 3

2014

-1 3-10.0

-8.0-6.0-4.0-2.00.02.04.06.0

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2014

% Forecast > > > > >

Source: U.S. Bureau of Economic Analysis, Global Insight Feb. 11 2013

Page 6: Economic Forecast, 2013-2017

The Impacts of Decreasing Federal Spending in the

Washington Area Economy

Page 7: Economic Forecast, 2013-2017

2010 Structure of the Greater Washington Economy

Local ServingActivities 34.8%

Non-LocalBusiness 12.0 %

TotalFederal 39.8%

Procurement 19.1%

Assn 1.8% Hosp. 2.1%

Int’l 3.5%O

ther

1.5

%

Other Federal 10.7 %

Health/Ed.

4.5%

Fed Wages & Salaries 10.0%

Source: GMU Center for Regional Analysis

Page 8: Economic Forecast, 2013-2017

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

0

10

20

30

40

50

60

70

80

90

Federal Procurement in theWashington Metro Area, 1980-2012

$ Billions

| < 80-90 = $96.5 B > | < 91-00 = $207.9 B >| < 01–10 = $563.5 B > |

TOTAL = $1,023.5 Billion

Source: US Census, Consolidated Federal Funds Report

2011

$80.0 B$75.6 B

2012

Page 9: Economic Forecast, 2013-2017

Professional & Business ServicesWashington MSA

20022005JanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ct

-20-15-10

-505

1015202530

(000s) Annual Data Annual Month over Year

2008 2009 2010 2011 2012

Tot 2011 = 688,700Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 10: Economic Forecast, 2013-2017

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

150

200

250

300

350

400

Federal Employment in theWashington Metro Area, 1950-2012

000s Eisenhower Kennedy – Johnson

Nixon - Ford

Carter Reagan Bush 1 Clinton Bush 2

- 5

+ 74

+ 35+ 17 0 -8.6

- 37 + 24

Obama

+17.5

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 11: Economic Forecast, 2013-2017

Federal GovernmentWashington MSA

20022005JanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ct

-20-15-10

-505

1015202530

(000s) Annual Data Annual Month over Year

2008 2009 2010 2011 2012

Source: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 12: Economic Forecast, 2013-2017

Summary for Federal Spending Trends in the Washington Metropolitan Area, 2010-2012

• Federal Procurement Outlays declined 8.4% between FY 2010 and FY 2012.

• Federal employment has declined since peaking in July 2010, losing 8,700 jobs or 2.25%.

• Federal payroll declined by 0.6% between FY 2010 and FY 2011 and will continue to decline as the workforce shrinks and older workers retire and are replaced by younger workers.

Page 13: Economic Forecast, 2013-2017

The Relative Importance of Federal Spending in the Maryland-DC-Virginia Region

The Region’s Share of U.S. Population 4.7% The Region’s Share of All Federal $s 9.0% The Region’s Share of All DOD $s 15.0% Share of Total Federal Spending

Subject to Sequestration 21.0% Federal Spending as a Percent of

the Region’s GRP in 2011 39.0%

Page 14: Economic Forecast, 2013-2017

How did the recession change the

Washington Area economy?

Page 15: Economic Forecast, 2013-2017

Wash MSA Payroll Job Change: Private Sector The Great Recession and Recovery To December 2012

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

Educ & Health Svcs

Prof. & Bus. Svcs

-80 -70 -60 -50 -40 -30 -20 -10 0

-5

-9

-14

-13

-14

-3

-45

-37

-29

0

-25

(000s)

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Series1

0 10 20 30 40 50 60 70 80

1

0

0

0

6

1

9

23

13

52

28Total -193 Total 132

Page 16: Economic Forecast, 2013-2017

16 Large Job MarketsJob Change: Dec 2011 – Dec 2012

New York

Los Angeles

Chicago

DC DallasPhiladelphia

Houston

Boston

Miami

Atlanta

Detroit

SF-Oakland

Minneapolis

Phoenix

Seattle

Baltimore

0

20

40

60

80

100

120

140(000s)

Washington + 30,200

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 17: Economic Forecast, 2013-2017

Job Change by SectorDec 2011 – Dec 2012

Washington MSA

Transp. & Util.Wlse Trade

ManufacturingInformation

FinancialOther Services

ConstructionLeisure & Hosp.

Retail TradeState & Local Govt

Educ & Health SvcsFederal Govt.

Prof. & Bus. Svcs

-20 -15 -10 -5 0 5 10 15 20 25 30-2-1-1-1

40

22

-612

13-3

10(000s) Total = 30,200

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 18: Economic Forecast, 2013-2017

Job Change by SectorNov 2012 – Dec 2012

Washington MSA

Transp. & Util.Wlse Trade

ManufacturingInformation

FinancialOther Services

ConstructionLeisure & Hosp.

Retail TradeState & Local Govt

Educ & Health SvcsFederal Govt.

Prof. & Bus. Svcs

-20 -15 -10 -5 0 5 10 15 20 25 301

-20

01

0-2

00

1-1

1-2

(000s) Total = -1,300

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 19: Economic Forecast, 2013-2017

Annual Job ChangeNorthern Virginia, 2002-2012

2002200420062008

-40-30-20-10

0102030405060

(000s) Annual Data Annual Month over Year

2009 2010 2011 2012

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 20: Economic Forecast, 2013-2017

Job Change by SectorDec 2011 – Dec 2012

Northern Virginia

Transp. & Util.Wlse Trade

ManufacturingInformation

FinancialOther Services

ConstructionLeisure & Hosp.

Retail TradeState & Local Govt

Educ & Health SvcsFederal Govt.

Prof. & Bus. Svcs

-20 -15 -10 -5 0 5 10 15 20 25 30000

-15

0-3

12

85

04

(000s) Total 20,600

Source: US Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Page 21: Economic Forecast, 2013-2017

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

0

2

4

6

8

10

12

14

8.6 – DC7.8 – U.S.

5.7 – SMD5.2 – MSA4.1 - NVA

Unemployment Rates in the WMSABy Sub-State Area, 2005-2012

Source: US Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US – Seasonally Adjusted)

Page 22: Economic Forecast, 2013-2017

The Washington Area’s Post-Federally Dependent Economy

Page 23: Economic Forecast, 2013-2017

Job Growth in the Washington AreaBy Sector, 2012-2017 (in thousands)

Sector 2012 2017 Change PercentProf. & Bus. Ser. 697.4 841.2 143.8 20.6Federal Gov’t 380.4 358.4 - 22.0 - 5.8Education/Health 380.2 419.0 38.8 10.2S & L Gov’t 309.7 321.6 11.9 3.8Hospitality 276.8 285.0 8.2 3.0Retail Trade 254.1 266.6 12.5 4.9Other Services 182.8 185.3 2.5 1.4Financial Services 150.0 154.7 4.7 3.1Construction 146.4 201.8 55.4 37.8Information Ser. 80.6 87.6 7.0 8.7Other Sectors (3) 175.0 193.2 18.2 10.4Total Jobs 3,033.4 3,314.4 281.0 9.3

Page 24: Economic Forecast, 2013-2017

Major Sources of Job Growth in theWashington Area , 2012-2017 (in thousands)

Growth Sectors 2012 2017 Change PercentProf. & Bus. Ser. 697.4 841.2 143.8 20.6Education/Health 380.2 419.0 38.8 10.2Construction 146.4 201.8 55.4 37.8Sub-Totals 1,224.0 1,462.0 238.0 19.4 % Total 40.4 44.1 84.7_ _______Totals 3,033.4 3,314.4 281.0 9.3

Sources: IHS Global Insight; GMU Center for Regional Analysis

Page 25: Economic Forecast, 2013-2017

Job Growth in Prince William CountyBy Sector, 2012-2017 (in thousands)

Sector 2012 2017 Change PercentRetail Trade* 29.5 33.2 3.7 12.5S & L Gov’t 22.7 24.9 2.2 9.7Prof. & Bus. Ser. 20.2 27.1 6.9 27.6Education/Health 16.3 19.8 3.5 21.5Hospitality 16.2 17.8 1.6 9.8Construction 13.8 17.6 3.8 27.6Federal Gov’t 7.8 8.0 0.2 2.0Other Services 5.4 5.9 0.5 9.1Financial Services 4.4 4.9 0.5 10.8Manufacturing 4.2 4.6 0.4 8.6Information Ser. 1.5 1.8 0.3 18.8Total Jobs 142.1 165.5 23.4 16.5

Page 26: Economic Forecast, 2013-2017

Major Sources of Job Growth in Prince William County, 2012-2017 (in thousands)

Growth Sectors 2012 2017 Change PercentProf. & Bus. Ser. 20.2 27.1 6.9 33.8Education/Health 16.3 19.8 3.5 21.5Construction 13.8 17.6 3.8 27.6Sub-Totals 50.3 64.5 14.2 28.2 % Total 35.4 39.0 60.7_________PW totals 142.1 165.5 23.4 16.5Metro Totals 3,033.4 3,314.4 281.0 9.3

Sources: IHS Global Insight; GMU Center for Regional Analysis

Page 27: Economic Forecast, 2013-2017

GRP Per Job in the Washington Area By Sector (in 2005 dollars)

Sector 2012 2017 % ChangeProf. & Bus. Services $134,750 $154,656 14.8%Federal Gov’t 138,361 138,566 0.1Education/Health 59,730 57,508 - 3.7S & L Gov’t 60,975 56,920 - 6.6Hospitality 42,883 42,391 - 1.1Retail Trade 60,807 64,136 5.5Other Services 70,339 69,151 - 1.7Financial Services 543,482 578,062 6.4Construction 98,824 82,490 - 16.5Information Services 349,868 468,376 33.9Other Sectors 147,903 151,120 2.2GRP per Job $130,653 $138,881 6.3

Page 28: Economic Forecast, 2013-2017

GRP Per Job in the Washington Area By Sector (in 2005 dollars)

High Job Growth 2012 2017 % ChangeProf. & Bus. Svs. (33.8%) $134,750 $154,656 14.8Education/Health (21.5%) 59,730 57,508 - 3.7Construction (27.6%) 98,824 82,490 - 16.5

Other High Value-Added SectorsInformation Services (18.8%) 349,868 468,376 33.9Financial Services (10.8%) 543,482 578,062 6.4Federal (2.0%) 138,361 138,566 0.1Average Metro Area GRP per Job $130,653 $138,881 6.3

Page 29: Economic Forecast, 2013-2017

Occupation Net New % of Total % ChangeBusiness and Financial 52,253 14.7 13.7 Computer, Math and Sci 33,630 9.4 14.2Health Care (all occup.) 31,915 9.0 13.7Office Admin Support 30,334 8.5 6.3Sales & Related Occup. 29,246 8.2 7.0Personal Care Occup. 23,892 6.7 15.2Management Occupations 22,964 6.4 7.1Education & Training 21,642 6.1 10.6Totals 224,234 63.0 10.0

Source: EMSI Inc., GMU Center for Regional Analysis

Washington Metropolitan Area: Major Sources of Net New Jobs

2012-2017

Page 30: Economic Forecast, 2013-2017

2017 Structure of the Greater Washington Economy

Local ServingActivities 38.0%

Non-LocalBusiness 16.3 %

TotalFederal 28.8%

Procurement 12.2%

Assn 1.9 %

Hosp. 2.6%

Int’l 3.9%

Other 1.5%

Other Federal 8.9 %

Health/Ed.

7.0 %

Fed Wages & Salaries 7.7 %

Source: GMU Center for Regional Analysis

Page 31: Economic Forecast, 2013-2017

2001

2003

2005

2007

2009

2011

2013

2015

2017

-2-101234567

%

Source: GMU Center for Regional Analysis

Economic Outlook (GRP), 2012-2017Washington Area and Sub-State Areas

(Annual % Change)

DCSMMSANV

Page 32: Economic Forecast, 2013-2017

Thank You Questions

cra.gmu.edu


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