pcei talk-three final
TRANSCRIPT
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Pierce County Economic Index 2009
Presentation
Horizons2010
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Prepared by
Dr. Doug Goodman, Ph.D.And
Dr. Bruce Mann, Ph.D.
Department of Economics
andCivic Scholarship InitiativeUniversity of Puget Sound
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Special Thanks To:
First Citizens Bank
Puget Sound EnergyRegence BlueShield
Tacoma Public UtilitiesTacoma-Pierce County Chamber
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The Pierce County Economy
High Road Or Low Road
2009-2010Forecast
When you come to a fork in the road,take it.
Yogi Berra
And, we did.Goodman and Mann
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On The High Road:2001 to 2007
A NICE RIDE
Incomes Up
Retailers Selling
Employers Hiring
Homes Selling
Full Employment
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The Road Gets Bumpy:2008 And Beyond
Recession Hits
House Bubble Bursts
Credit Freezes
Oil Price Rises
Spending FallsConfidence Drops
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Pierce County Economic IndexMovin On Up
Pierce County Economy Grows As U.S. Recession Starts
Pierce County Economic Index (1985 = 100)
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Pierce Countys Good Mileage
Military MattersIncreased Troop Levels
Construction Spending
Health Care Sector StrongHospital Construction
Research Activity
Regional Health ProvisionNon-Residential Construction
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2009: U Turn Down
Q1: Down 1.1%Q2: Down 2.8%
Q3: Down 4.2%
Q4: Down 4.3%
A Year of Declines:What A Difference
Continued Decline
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2010: Getting Back On Track
Second Half UphillNational RecoveryHelps End Slump
Q3: Up 1.3%
Q4: Up 2.6%
First Half: DownhillQ1: Down 3.3%Q2: Down 1.1%
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Pierce County Economic Index2000 - 2010
Two Year Decline - Deepest In 30 Years
-3.1% -0.1%
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The Recession: Peak To Trough
Peak To Trough Decline Of 4.9%
PEAK2008 Q3
TROUGH2010 Q1
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The Steep Drive Downhill
Non-Labor Income DownMajor Portion - 30% - Of Local Income
Pensions
Retirement IncomeWelfare Social Program Benefits
Interest Dividend Earnings
Financial Market Collapse Reduced Wealth
Stock Bond Asset Values LostHome Equity Evaporated
Need to Rebuild Values
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Labor Market Activity: Jobs
Employment
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Balanced Labor Market Activity
Demand Up 3.3%
Supply Up 2.2%
UnemploymentStable At 5% - 6%
Employment Growth
Labor Force Growth
Good Tripping:The Drive To
Full Employment
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Employment: 2008 and 2009
2008: Good Start, Weak Close
2% Job Loss In Q4
2009: Jobs Cut, Weak Year
Down 3.1% In First Quarter
Down 4.2% In Second QuarterDown 4.5% In Third Quarter
Down3.7% in Fourth Quarter
A Turn Down
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Employment : 2010
Weak First Half Of 2010First Quarter Down 2.2%
Second Quarter Flat
Stronger Second HalfThird Quarter Up 0.6%
Fourth Quarter Up 1%
The Road Turns Again
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Labor Market Activity: Labor Force
The Supplyof Workers
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Workers Drive To Pierce County
Good Roads AttractNew Workers
In 2008 And 2009Labor Force Up By2.7%
Supply Side Growth
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Labor Force Growth 2010
More ModerateIncreases
Supply Up 2%
Each QuarterOf 2010
Roads StillLook Good
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Why Will Pierce County Attract
30,000 More Workers Between2008 and 2010?
Expanded Military And Dependents
More Diverse Job Opportunities
Increased Labor Market Flexibility
Milder Recession Beginning
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Unemployment: 2008
2007 Record
Low RateEarly 2008 Near
Full EmploymentLevel - 5.5%
Fourth Quarter JumpsTo Over 6.4%
Unemployment MovinOn Up In 2008
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Unemployment: 2009
The Recession Hits
2009 Jumps To 9.5%
Record One QuarterJump
Same As State AndNation
Second Quarter: 9.8%Third Quarter: 9.0%Fourth Quarter: 8.9%
Downhill Is Uphill
2007 2008 2009
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Unemployment: 2010
First Half Of 2010
Labor Force GrowsJobs ShrinkUnemployment Up
Second Half of 2010
Job Growth Rate Down To 8.8%
Jobless Recovery
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Unemployment RateMountain Driving
Unemployment Over9%: 2009 And 2010
More Residents WorkOutside Of County
Employment In CountyDrops To 65%
Hazardous Driving
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Retail Sales
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Retail Sales: Hairpin Turn
2007: Down Hill Growth Stopped In
Second Half 2007 Real Sales: Off 0.5%
2008: Sales Plummet Financial Losses
Matter Spending Down 9%
Reverse Direction
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Retail Sales: 2010Merging Onto Highway
Weak Start StrengthensFirst Quarter: + 0.1%
Second Quarter: + 2.9%
Third Quarter: + 2.5%
Fourth Quarter: + 2.2% Real Sales Still Down Holiday Season Weak
Growth Finally Returns
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Retail Sales: 2004-2010
2008: Lost $525 MillionDown 8.6%
2009: Lost $415Million
Down 7.5%
2010: Up $100 MillionPlus 2.0%
Recession Costly
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Personal
Income
TotalAndPer Capita
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Total Personal Income2000 - 2007
Average AnnualGains Of 6.5%
Real Growth Of3.6%
Good Road
Pleasant Drive
Annual Percent Change
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Total Personal IncomeEffects Of The Recession
In 2008: Up 4.1% Real: Up 0.3%
In 2009: Down 2.8%
$800 Million LossIn 2010: Up 5.7%
Real: Up 1.7%
High To Low To High
Annual Percent Change
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Per Capita Personal Income
2008: Up 3.7% Real: Down 0.1%
2009: Down 3.9% Real: Down 4.0%
Largest Drop In ThirtyYears
2010: Regains 3.0% Real: Down 0.8%
Population GrowthSlows Average Income
Annual Percent Change
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Per Capita Income
2008: $35,040
2009: $33,7002010: $34,700
Recession Effect$400 Lost Since
2008Four Years Of
Lost PurchasingPower Back To2006 Level
Average Income
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Real
EstateActivity
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Housing 2007 - 2008
Not Pretty Picture
2007 Year Gets Worse
Prices FallFinancing Evaporates
2008 Market Weakens
Few Buyers
Less Financing
Double Digit Declines
Steep Downhill
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Housing 2009Moving To The High Road
Smaller Declines
Off 15% In Q1Off 7% In Q2
Off 3% In Q3
Mortgage Window Opens
Federal Assistance
Up 4% At Year End
Turnaround Ahead
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Housing 2010Cruising The Highway
Momentum Builds Early
Prices IncreaseTax Stimulus Helps
Strong First Half
Up 11% Q1
Up 13% Q2
Good Second Half
Up Almost 10% Q3
Up 6% As Year Ends
Smooth Road
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Multi-Family Housing: 2008
On The High RoadStrong Countywide Market in 2008
Fewer Buyers And More Renters MeansDemand Up For Rental Units
Rents Rise
Fewer Concessions
Low VacancyArea Vacancy Near 5%
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Multi-Family Housing: 2009
To The Low RoadWeaker Countywide Market In 2009
Renters Move To Own
Troop Deployments Reduce Demand
Families Leave Area
Spanaway, UP, South County Softest
Vacancy Up to 8%Rents Stable
Concessions Return
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Multi-Family Housing: 2010
Continuing DownhillRecovery Weakens Market In 2010
Income Growth
Job Creation
Mortgage Financing
Rents Down
Vacancy UpChallenging Year For Owners
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Commercial Real EstateDriving Downhill
2008 Into 2009Better Than Regional MarketsPositive Absorption
Non-speculative Projects 2010 Significant Softening
Demand ReducedVacancy Increases
Strong Regional CompetitionNew Space Adds To Supply
Retail Real Estate EspeciallyTroublesome
I d t i l S
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Industrial SpaceDriving Into Head Winds
Strong Through 2009Modest Speculative Space
Supply Balanced With DemandDemand From New Tenants:
IKEA, Whirlpool, Green Mountain CoffeeWeakness In 2010
Demand Drops As Trade DeclinesRegional Competition Tough
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Trade And Distribution
Low Tide, Low Water
Global Recession
Anemic Domestic NeedsReduced Military Shipments
Cost Cutting By Shippers
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Port and Trade ActivityChoppy Waters
2007 and 2008: Down 5%2009: Down 20%
One Line Leaves One Line Downsizes
2010: Down 15%Autos and Breakbulk FlatCapital Improvements
Access Environment
(1,000 of TEUs)Recessions Low Tide
PCEI 2007 2010
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PCEI: 2007 - 2010Recession To Recovery
Recession
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Special Thanks To:
First Citizens Bank
Puget Sound EnergyRegence BlueShield
Tacoma Public UtilitiesTacoma-Pierce County Chamber