Washington DC Regional Economic Analysis April 2014

The Democratic Business Council of Northern Virginia

April 18, 2014

The Washington Metropolitan RegionIts Economic Outlook and

Future Challenges

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

Director, Center for Regional AnalysisGeorge Mason University

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 180

5

10

15

20

25

1982-Q31991-Q12001-Q42009-Q2

Quarters After Trough

% C

ha

ng

e in

GD

P*

Recession Recovery Patterns of GDPPast Four Recessions

Sources: Bureau of Economic Analysis, GMU Center for Regional Analysis

*in 1992 or 2009 Chained Dollars

Contributions to Post Recession RecoveriesAverage Growth After 18 Quarters

Source: Bureau of Economic Analysis

1982-Q3 1991-Q1 2001-Q4 2009-Q20.0

1.0

2.0

3.0

4.0

5.0

6.0

4.8

3.2 3.1

2.4

3.0

2.2 2.1

1.5

0.60.3 0.3 0.20.3

0.8 0.60.8

GDP Personal Consumption Residential Investment Exports

Recession

Avg % Chg

Decreasing Role of Residential Investment% of GDP 18 Quarters Post-Recession

Source: Bureau of Economic Analysis

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 180.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

3.4%5.0%

3.5%4.0%

5.2%

5.7%

2.7%3.1%

1982-Q3

1991-Q1

2001-Q4

2009-Q2

Quarters After Start of Recession

Per

cen

t o

f G

DP

U.S. Leading IndexMonth-Over-Year Percent Change

JanM

ayS

epJanM

ayS

epJanM

ayS

epJanM

ayS

epJanM

ayS

epJanM

ayS

epJanM

ayS

epJanM

ayS

epJan

-25

-20

-15

-10

-5

0

5

10

152006 2007 2008 2009 2010 2011 2012 2013

Source: The Conference Board, GMU Center for Regional Analysis

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Mar-14

30

35

40

45

50

55

60

65

MfgN-Mfg

ISM Manufacturing and Non-Manufacturing Indices

Source: Institute for Supply Management

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-140

20

40

60

80

100

120

100

Consumer Confidence

Source: The Conference Board, GMU Center for Regional Analysis

Expectations

Current Situation

-

1

2

3

4

5

6

7

8

30-Yr

10-Yr Treas

Fed

Interest Rates2001 - 2019

Forecast > > > >

Source: IHS Global Insight April 8, 2014

Feb-09

Feb-10

Feb-11

Feb-12

Feb-13

Feb-14

2000

2500

3000

3500

4000

4500

5000

5500

6000

200

250

300

350

400

450

500

550

600

Existing (Left Axis)

New (Right Axis)

U.S. New and Existing Home Sales

(000s) (000s)

Source: National Association of Home Builders (New), National Association of Realtors (Existing)

Residential Construction and Resales Forecasts

(millions of Units)

Year Housing Starts Existing House Sales

2005 2.073 7.076

2011 0.612 4.278

2012 0.783 4.661

2013 0.929 5.073

2014 1.045 5.039

2015 1.389 5.662

2016 1.582 5.658

2017 1.603 5.428

2018 1.602 5.384Source: IHS Global Insight “US Executive Summary” April 8, 2014

2007 3

2008 3

2009 3

2010 3

2011 3

2012 3

2013 3

2014 3

2015 3

-10

-8

-6

-4

-2

0

2

4

6

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2015

% Forecast > >

Source: Bureau of Economic Analysis, Global Insight April 8, 2014

The Washington Economy:Impacts of the Recession

and the Sequester

2001

2003

2005

2007

2009

2011

2013

2015

2017

-4

-2

0

2

4

6

%

Source: IHS Global Insight, GMU Center for Regional Analysis

U.S. GDP and Washington Area GRP 2001 – 2013 – 2018

Washington

U.S.

Recession Impacts

• GRP declined 0.8% in 2008

• The region’s lost 178,100 jobs

Sequester+ Impacts

• Federal procurement $s down by 14.5%

• There are 21,200 fewer federal jobs

• Federal payroll is down 4.8%

or by $2 billion

Federal GovernmentWashington MSA

20022005JanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJan

-20

-15

-10

-5

0

5

10

15

20

25

30

(000s)

Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Mar-14 Total: 364.4

Annual Data Annual Month over Year

2008 2009 2010 2011 2012 2013

WMSA Payroll Job Change: Private SectorThe Great Recession and Recovery

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

Educ & Health Svcs

Prof. & Bus. Svcs

-60 -40 -20 0

-4

-7

-10

-12

-10

-8

-48

-34

-23

0

-23

(000s)

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

Series1

0 10 20 30 40 50 60 70

1

0

0

0

7

10

15

50

22

48

32

Total -178 Total 185

Aug 2008-Feb 2010 Feb 2010-Mar 2014

Professional & Business ServicesWashington MSA

20022005JanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJan

-20

-15

-10

-5

0

5

10

15

20

25

30

(000s) Annual Data Annual Month over Year

2008 2009 2010 2011 2012 2013

Mar-14 Total: 696.1Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

-30

-20

-10

0

10

20

30

Prof & Bus Svcs

Prof, Sci & Tech Svcs

Management

Admin & Waste Mgt

Au

g-0

8

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


WMSA Payroll Job Change from Aug-2008Professional & Business Services

As measured in January of each year(000s)

-10

0

10

20

30

40

50

60

70

Health & Educ Svcs

Educ. Svcs

Health Svcs

Ambulatory Health Svcs

Hospitals

Au

g-0

8

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


WMSA Payroll Job Change from Aug-2008Education & Health Services


-40

-30

-20

-10

0

10

20

30

Leisure & Hospitality

Food & Drink-ing Places

Accommoda-tion

Arts & Rec

Au

g-0

8

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


WMSA Payroll Job Change from Aug-2008Leisure & Hospitality


-30

-25

-20

-15

-10

-5

0

5

10

Retail

Department Stores

Transporta-tion & Utili-ties

Wholesale Trade

Au

g-0

8

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


WMSA Payroll Job Change from Aug-2008Trade, Transportation & Utilities


-50

-40

-30

-20

-10

0

10

Other Services

Manufacturing

Information Svcs

Construction

Au

g-0

8

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


WMSA Payroll Job Change from Aug-2008Construction, Mfg, Info & Other Services


-12

-10

-8

-6

-4

-2

0

Financial Ac-tivities

Finance & Insurance

Credit & Re-lated

Real Estate & Leasing

Au

g-0

8

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14


WMSA Payroll Job Change from Aug-2008Financial Activities


Washington Metropolitan Area Job Change by Wage Category between 2008 to 2013

Lower Wage

Mid-Wage

Higher-Wage

(60,000) (40,000) (20,000) 0 20,000 40,000 60,000 80,000

2008-2009 2010-2013

Sources: EMSI 2013.3 & GMU Center for Regional Analysis

The Washington Economy: 2013 Performance

15 Largest Job MarketsJob Change: 2012 – 2013

New York

Los Angeles

Chicago

Dallas

DC Houston

Philadelphia

Boston

Atlanta

Miam

i

SF-Oakland

Detroit

Phoenix

Minneapolis

Seattle

0

20

40

60

80

100

120

140

(000s)

Washington + 30,300


15 Largest Job MarketsJob Change: Mar 2013 – Mar 2014

New York

Los Angeles

Chicago

Dallas

DC Houston

Philadelphia

Boston

Atlanta

Miam

i

SF-Oakland

Phoenix

Detroit

Seattle

Minneapolis

-20

0

20

40

60

80

100

120

140(000s)

Washington +5,500


Annual Job ChangeWashington MSA, 2002-2014

2002

2005

2008

-80

-60

-40

-20

0

20

40

60

80

100(000s) Annual Data Annual Month over Year

2010 2011 2012 2013


Job Change by SectorMar 2013 – Mar 2014

Washington MSA

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

0

0

-3

-3

2

1

1

9

6

8

8

-11

-12(000s) Total = 5,500


Job Change by SectorFeb 2014 – Mar 2014

Washington MSA

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

0

-1

0

0

0

0

0

7

1

4

1

-1

5(000s) Total = +15,700


Annual Job ChangeDistrict of Columbia, 2002-2014

2002

2005

2008

-40

-30

-20

-10

0

10

20

30

40

50

60


2010 2011 2012 2013


Job Change by SectorMar 2013 – Mar 2014 District of Columbia

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

0

0

0

0

0

-1

0

1

2

1

7

-6

1(000s) Total 3,700


Job Change by SectorFeb 2014 – Mar 2014 District of Columbia

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

0

0

0

0

0

-1

0

2

0

0

1

0

1(000s) Total 3,000


Annual Job ChangeSuburban Maryland, 2002-2014

2002

2005

2008

-40

-30-20

-100

1020

3040

5060


2010 2011 2012 2013


Job Change by SectorMar 2013 – Mar 2014Suburban Maryland

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

2

0

-1

-1

0

0

-3

6

2

6

2

-1

-4(000s) Total 7,400


Job Change by SectorFeb 2014 – Mar 2014Suburban Maryland

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

0

0

0

0

0

0

-1

2

1

2

0

0

2(000s) Total 5,100


Annual Job ChangeNorthern Virginia, 2002-2014

2002

2005

2008

-30

-20

-10

0

10

20

30

40

50

60


2010 2011 2012 2013


Job Change by SectorMar 2013 – Mar 2014

Northern Virginia

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

-1

0

-1

-1

1

1

3

0

2

6

1

-4

-6(000s) Total 800


Job Change by SectorFeb 2014 – Mar 2014

Northern Virginia

Transp. & Util.Wlse Trade

ManufacturingInformation

FinancialOther Services

ConstructionLeisure & Hosp.

Retail TradeState & Local Govt

Educ & Health SvcsFederal Govt.

Prof. & Bus. Svcs

(20.0) (10.0) - 10.0 20.0 30.0

0

0

0

0

0

1

1

3

0

1

0

0

3

(000s) Total 6,700


Feb-07

Feb-08

Feb-09

Feb-10

Feb-11

Feb-12

Feb-13

Feb-14

0

2

4

6

8

10

12

8.1 – DC

6.7 – U.S.

5.2 – SMD

5.1 – MSA

4.2 - NVA

Unemployment Rates in the WMSABy Sub-State Area, 2007-2014

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

Economic Outlook for the Washington Metropolitan Area

Washington Metropolitan Area

Gross Regional Product, 2013-2018 (in billions of 2005$s)

Region 2013 Share 2018 Share % Change

Metro $391.2 100.0 $458.8 100.0 17.3

District 92.7 23.7 104.5 22.8 12.7

SubMD 110.3 28.2 129.5 28.2 17.4

NoVA 187.1 47.8 223.5 48.7 19.4

__________________________________________ Source: IHS Global Insight, GMU Center for Regional Analysis

The Washington metropolitan area includes Jefferson County, WV and is included in the total GRP values.

Principal Sources of Job and GRP Growth in the Washington Area, 2013-2018

(in thousands)

Growth Job % of Total Average Value

Sectors Change Job Change Added per Job*

Prof. & Bus. Ser. 144.5 48.8 $158,211

Construction 51.9 17.5 $91,482

Education/Health 35.2 11.9 $59,938

Hospitality Services 27.1 9.1 $43,036

State and Local 19.6 6.6 $60,099

Retail Trade 13.6 4.6 $60,981

Sub-Total 291.9 98.5 $93,347

Overall Total 296.4 100.0 $135,544

Sources: IHS Global Insight; GMU Center for Regional Analysis * in 2005$s

Job and GRP Gains and Losses for the Washington Area’s Other Sectors, 2013-2018

(in thousands) Job % of Total Average Value

Change Job Change Added per Job

Federal Gov’t - 22.8 - 7.7 $141,894

Other Services 2.1 0.7 $102,734

Financial Services - 1.3 - 0.4 $591,253

Information Services 6.3 2.1 $549,993

Manufacturing 1.5 0.5 $103,723

Transportation 9.3 3.1 $133,796

Wholesale Trade 7.3 2.5 $193,924

Sub-Totals 4.5 1.5 $220,696

Overall Total 296.4 100.0 $135,544

Sources: IHS Global Insight; GMU Center for Regional Analysis

2001

2003

2005

2007

2009

2011

2013

2015

2017

-2-101234567

%

Source: GMU Center for Regional Analysis

Economic Outlook (GRP), 2001-2018Washington Area and Sub-State Areas

(Annual % Change)

DCSMMSANV

Thank You Questions

cra.gmu.edu

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