Greater Nashua Chamber of Commerce Economic Outlook Luncheon, January 15, 2014

Welcome to theEconomic Outlook Luncheon

January 15, 2014

Greater Nashua Chamber of Commerce


2

Today’s Panelists

Mr. Dennis Delay Mr. Charlie Arlinghaus Mr. Paul M. Provost

Economist, NH Center for Public Policy

President of The Josiah Bartlett Center

CFP, Senior Vice President of Merrimack County Savings Bank

3

Board of Directors

William H. Dunlap, Chair

David Alukonis

Eric Herr

Dianne Mercier

James Putnam

Stephen J. Reno

Todd I. Selig

Michael Whitney

Daniel Wolf

Martin L. Gross, Chair Emeritus

Directors Emeritus

Sheila T. Francoeur

Stuart V. Smith, Jr.

Donna Sytek

Brian F. Walsh

Kimon S. Zachos

“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

New Hampshire Economic Trends

Greater Nashua Chamber of Commerce Economic Outlook Luncheon

January 15, 2014



4

Anecdotal evidence from Fed Bank of Boston, December 4, 2013

• Expanding economy in New England. • Most respondents in manufacturing, retail and tourism,

software and IT services, and the staffing industry report year-over-year increases in revenue

• Residential and commercial real estate contacts indicate that market conditions continue to improve.

• Most firms are holding headcounts level; wages are steady or increasing modestly.

• Upward price pressures remain minimal. • Many firms are cautiously optimistic about the outlook, a

more upbeat tally than in the October round of calls.


5

Calculated Risk has the clearest picture of the problem we face:


6

NH – Less of a decline, but a slower recovery

Index of Total NonFarm Employment (Seasonally Adjusted)

92.0

93.0

94.0

95.0

96.0

97.0

98.0

99.0

100.0

101.0

Jan-

07

May

-07

Sep-0

7

Jan-

08

May

-08

Sep-0

8

Jan-

09

May

-09

Sep-0

9

Jan-

10

May

-10

Sep-1

0

Jan-

11

May

-11

Sep-1

1

Jan-

12

May

-12

Sep-1

2

Jan-

13

May

-13

Sep-1

3

Dec

200

7 =

100

US NE NH

New England

United States

New Hampshire


7

Many NH Employment Sectors Have Still Not Recovered

Change in New Hampshire Jobs

-15000

-10000

-5000

0

5000

10000

Man

ufac

turin

g

Constr

uctio

n

Trade

& T

rans

porta

tion

Financ

ial A

ctivit

ies

Prof &

Bus

Ser

vices

Edu &

Hea

lth S

ervic

es

Leisu

re &

Hos

pitali

ty

Gover

nmen

t

Jul 07 to Jul10Jul 10 to Jul 13


8

Job Quality is Mediocre


9

Nashua growth in Financial and Business Services


10

State averages mask wide regional variation

Percent of adult population with a B.A. or higher

14.7%

26.9%28.4%

36.5%

31.1%

35.1% 35.0%

31.4%

37.6%

Great

Nor

th W

oods

Whit

e M

ount

ains R

egion

Lake

s Reg

ion

Dartm

outh

/Lak

e Sun

apee

Reg

ion

Mon

adno

ck R

egion

Seaco

ast R

egion

Great

er C

onco

rd

Great

er M

anch

este

r

Great

er N

ashu

a


11

Did too many people own homes who could not afford them, at 69%?


12

12

NH Real Estate Has Finally Hit Bottom

NH Single-Family Residential Home Sales and Price (MLS)Source: NH Association of REALTORS

0

5,000

10,000

15,000

20,000

25,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Units sold Median Price

Median Home Price

Number of Units Sold

Decline from the Peak:Sales -40% from 2004Price -25% from 2005

2013 YTD thru November


13

Home Prices Return to the Long Term Trend:

NH Single-Family Residential Home Price (MLS)Source: NH Association of REALTORS

$134,749

$141,372

$152,500

$170,158

$188,089

$206,266

$227,807

$237,976

$226,354

$216,598

$187,954

$170,164

$169,787

$154,410

$152,054

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Median Price 2000 Inflation Adjusted

Median Home Price

Inflation Adjusted Price


14

Another sign of life returning to local real estate markets:

Real Estate Transfer

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Jul-

99

Jul-

00

Jul-

01

Jul-

02

Jul-

03

Jul-

04

Jul-

05

Jul-

06

Jul-

07

Jul-

08

Jul-

09

Jul-

10

Jul-

11

Jul-

12

Jul-

13

12 Month Running

Mil

lio

ns

New Hampshire State Revenue


15

NH Foreclosures – Worst is OverNH Monthly Foreclosure Deeds

0

100

200

300

400

500

600Ja

n-05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Source: NH Housing Finance Authority

Actual Trend


16

New Hampshire Home Building Below Normal


17

Declines in Prices and Interest Rates Affect

Affordability


18

But…….• NH’s Young households are burdened by highest

level of student debt in the Nation;• Lending standards are more rigorous—Qualifying

Mortgage, 43% debt to income limit, etc.;• With rents rising and mediocre job quality, more

difficult to save and qualify;• Nearly 20,000 foreclosed units in past several years

in the state—some will not qualify;• Lack of liquidity is keeping boomers in larger houses

than they need;• Prices and interest rates are rising in past several

months, blunting recent affordability improvements.


19

This Recovery Not Supported by Migration

Net Migration Into and Out of New Hampshire

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011


20

Migration Patterns Shift!


21

NEEP Forecast for New Hampshire November 2013

• Growth in the economy is close to 2% and improving.

• Housing causes acceleration in growth.• A failure to raise the debt ceiling (in

2014) would be serious, likely sparking a financial crisis and a sharp recession.

• We are close to finally breaking free from the black hole of the Great Recession. All it takes is for Washington to come together.


22

New Hampshire Center for Public Policy StudiesWant to learn more?• Online: nhpolicy.org• Facebook: facebook.com/nhpolicy• Twitter: @nhpublicpolicy• Our blog: policyblognh.org• (603) 226-2500

Board of Directors

William H. Dunlap, Chair

David Alukonis

Eric Herr

Dianne Mercier

James Putnam

Stephen J. Reno

Todd I. Selig

Michael Whitney

Daniel Wolf

Martin L. Gross, Chair Emeritus

Directors Emeritus

Sheila T. Francoeur

Stuart V. Smith, Jr.

Donna Sytek

Brian F. Walsh

Kimon S. Zachos

“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

23

Budgets and Jobs

Charlie ArlinghausJosiah Bartlett [email protected]



24

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

1000000

1100000

1200000

1300000

1400000

1500000

1600000

Apples to Apples "general fund"

Priorities: 2015 vs. 2013$1,470.6M

General Fund*(+9.8%)

$681.2MHHS

(+5.7%)

$215.7MDD & BH(+16.6%)

$465.5MOther HHS(+1.4%)

$668MNon-HHS(+14.4%)

$121.4MDebt Service

(+9.1%)

25Greater Nashua Chamber of Commerce


26

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

NH Employment 1976-2013

employment Linear (employment)

27

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

500,000

550,000

600,000

650,000

700,000

750,000

The 13 year Lost Decade

employment Linear (employment)



28

MR. PAUL M. PROVOST

CFP, Senior Vice President of Merrimack County Savings Bank

Thank you for attending our Economic Outlook Luncheon!


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Our Upcoming Events

Date: Wednesday, February 19, 2014Time: 7:30 – 9:00 AMLocation: Courtyard Marriott, Nashua

Date: Friday, February 28, 2014Time: 6:30 – 9:30 PMLocation: Crowne Plaza, Nashua

Date: Friday, March 7, 2014Time: 5:30-7:30 PMLocation: Sky Meadow Country Club, Nashua

State of the City

Giggles & Nibbles

Comedy Night

The 11th Annual Greater Nashua

Chamber of Commerce Eminence

Awards

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