ventura county - californiaeconomy.scag.ca.gov/economy site document library... · ventura...

VENTURA COUNTY2019 ECONOMIC REPORT

10th Annual Southern California Economic Summit

ii

COUNTY ECONOMIC REPORTS

VENTURA

Prepared by: Matthew Fienup, Ph.D. California Lutheran University

For questions regarding this report, please contact: Kevin Kane, Ph.D. Associate Regional Planner Research & Analysis

Southern California Association of Governments 900 Wilshire Blvd., Ste. 1700 Los Angeles, CA 90020

(213) 236-1828 [email protected] www.scag.ca.gov

1

Southern California Association of Governments

TABLE OF CONTENTSExecutive Summary 2

A. Industries and Occupations 6

B. Demographics and Education 9

C. Incomes and Poverty 12

E. Ventura County’s Forecast 19

F. Technical Appendix: Non-Durable Manufacturing Jobs Estimation Methodology 24


2

Source: California Employment Development Department, Department of Finance

EXECUTIVE SUMMARYVENTURA COUNTY REMAINS IN A PROLONGED PERIOD OF ECONOMIC WEAKNESS.As of this writing, that period has stretched into a fifth year. Early signs of weakness appeared in 2013, when a sustained decline in the size of the County’s labor force began. The County’s labor force contracted in each of five consecutive years, only returning to small positive growth in 2018. The next major sign of weakness was County GDP. Driven by declines

in Non-Durable Goods Manufacturing, total economic activity in Ventura County contracted in 2016 and again in 2017. By the end of 2017, Ventura County had experienced the worst four years of GDP growth on record, worse even than any four years that include the financial crisis and the Great Recession.

EXHIBIT ES-1 REAL GROSS DOMESTIC PRODUCT, GROWTH RATE PERCENTAGE (1991-2018)

Source: U.S. Bureau of Economic Analysis

The latest, and perhaps the most arresting, sign of weakness arrived in the form of population data. According to the California Department of Finance, over the course of 2018, Ventura County’s population declined for the first time in the history for which we have data.

In last year’s Ventura County publication, we wrote, “Given the economic headwinds in the County, we continue to wonder if Ventura County will see negative population growth in the near future.” As it turns out, the County’s population was shrinking at the very moment those words were being written.

EXHIBIT ES-2 VENTURA COUNTY CIVILIAN LABOR FORCE AND POPULATION, PERCENT CHANGE (1991-2018)

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

0.0%1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

-0.6%

0.4% 1.1%

3.0% 2.3%

0.9%

5.3% 5.6%

8.2% 7.5%

-0.5%

2.6%

7.8%

5.3%

1.6%

3.3% 2.5%

-4.5%

0.7%

5.6%

2.1% 1.8% 2.1%

0.4% 1.0%

-0.9% -0.4% 0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PopulationCivilian Labor Force

0.0%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0.0%

1.8%

0.6%

1.3%

-0.4% -0.6%

0.5%

1.9%

2.2%

-0.3% -0.1%

1.8% 1.5%

0.9% 0.6%

0.9% 0.9% 0.8%

1.3%

0.3% 0.4%

0.7%

-0.2%

-0.9%

-0.6% -0.4%

-0.2%

0.2%

3


The decline in the County’s population should be truly alarming to community leaders, elected officials, and concerned citizens alike. As the San Fernando Valley Business Journal appropriately noted, “Detroit loses population. Not Ventura County.”

Population decline is not an early warning sign. As discussed above, early signs began appearing 6 years ago. Population decline is a late-stage manifestation of significant economic weakness. As individuals and households have compared the

economic opportunity that is available to them in Ventura County to opportunity available in other parts of the country, more and more have left to seek that opportunity somewhere else. In 2018, four thousand more people left Ventura County for another region of the country than came to Ventura County from another region. Accelerating net domestic out-migration has finally overwhelmed natural population growth and positive net international migration, tipping overall population growth negative.

EXHIBIT ES-3 NET DOMESTIC MIGRATION (1991-2018)

Source: U.S. Bureau of Census

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

-5.0%

-6.6%

-4.3%

-6.4%

-4.3%

-0.9% -1.5% -1.0% -0.9%

-5.1%

-11.2%

-7.7% -8.4%

-4.6%

-1.2% -1.4% -2.6%

-1.5% -2.0% -2.6%

-4.1% -2.7%

-4.0%

0.3% 1.7%

0.4%

2.1%

It is important to acknowledge that natural disasters have contributed to the current situation. The Thomas Fire, which burned more than 1,000 homes in Ventura County on its way to becoming the largest wildfire in California history as of December 2017, was followed by the devastating Hill and Woolsey Fires less than a year later. Not surprisingly, the decline of the County’s overall population was driven by declines in Ventura and Thousand Oaks, the two cities most impacted by these fires. Given the economic weakness that already existed in the County prior to December 2017, it is not surprising that the fires have had a serious impact. Strong economies can absorb unexpected shocks. Weak economies unfortunately cannot.

With the start of the 2019 fire season, the County has weathered a third consecutive year of destructive wildfires. As this report is being written, hotspots are still being extinguished in the Easy and Maria Fires. While only a handful of homes were lost this year, three difficult fire seasons in a row are surely working to increase net domestic outflows and population decline.

Our latest estimate indicates that Ventura County GDP grew just 0.1% in 2018. Average growth over last five years is zero percent, representing the weakest five-year period for which we have data. Average growth over the past four years is negative.


4

Source: U.S. Bureau of Economic Analysis

During 2018, the Ventura County’s economic growth was buoyed by relative strength in Durable Goods Manufacturing. The number of jobs in this high value-added sector grew by 5%. If not for the contribution of durable goods in 2018, our estimates indicate that the Ventura County economy would have contracted for the third straight year.

Ventura County’s growth numbers are especially shocking compared to the broader State and National economies. As Ventura County’s economy has been contracting, the broader economy has been experiencing an acceleration of growth. The U.S. grew 2.9% in 2018, significantly faster than the 2.0% growth of the preceding decade. California’s economy grew 3.5%.

As with GDP growth, Ventura County jobs data also paint a picture of general economic weakness. With a few welcome year-over-year exceptions, jobs in high paying, high output per worker sectors are in a sustained decline, while jobs in low paying, low output sectors are growing. Despite strength in 2018, the number of jobs in Durable Goods Manufacturing is still down nearly 20% from the pre-recession number of jobs. The number of jobs in Non-durable Goods Manufacturing and Financial Activities, two of the sectors with the highest average salaries, are down more than 27%. Information & Technology has fared little better, with the number of jobs down 14% from the previous high. Educational & Health Services and Leisure & Hospitality, two sectors with low average salaries, are each up significantly since the Recession. Jobs in Education & Health Services are up an astounding 48% since 2007.

Unfortunately, jobs in Educational & Health Service and Leisure & Hospitality very often do not pay wages which are sufficient for workers in these sectors to be able to afford to live in Ventura County. This, along with the widespread loss of high-paying jobs has created a major dislocation between homes and places of work. The Census Bureau indicates that more than 80,000 Ventura County residents leave the County

each day to go to work in a job that allows them to afford to live in Ventura County. Meanwhile, 40,000 employees drive into the County each day in order to work in jobs that largely pay enough to live here. These reciprocating commutes between home and work are an increasingly common feature of life in Ventura County.

When you add home price growth to the list of economic variables already discussed, an economic puzzle emerges in Ventura County: the size of the county’s labor force has shrunk; total economic activity has declined; jobs are being lost in high paying sectors and added in low paying sectors; and the population is now declining; yet, home prices continue to rise. According to information from CoreLogic, Ventura County’s median home price has grown by an average of 5.7% over the past four years (and by an average of 8.4% over the past six years!). While, at first, this seems to defy the laws of economics, it points to the fact that causality flows from poor housing affordability to poor regional economic performance, not the other way around. It simply can’t be the case that a fundamentally weak economy is causing home prices to soar. Instead, poor housing affordability is driving jobs and individuals from the region, increasing net domestic out-migration and decreasing total economic activity.

You don’t need to take our word for it. Ventura County’s three largest manufacturing companies are now on the record stating that housing affordability and the resulting inability to attract and retain talent is the single biggest obstacle to doing business in Ventura County. Recent decisions on the part of incumbent businesses to expand operations in other regions rather than in Ventura County and the relocation of whole business units from Ventura County to metropolitan areas with more favorable housing affordability are the link between Ventura County’s housing affordability crisis and the region’s economic woes.

EXHIBIT ES-4 REAL GROSS DOMESTIC PRODUCT: 5-YEAR MOVING AVERAGE GROWTH RATE (PERCENT)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

5


Ventura County’s economic woes indicate that poor housing affordability cannot be explained by robust demand. The problem is Ventura County is purely one of housing supply. We simply don’t build enough.

As we have noted in previous publications, one of the primary drivers of the lack of housing in Ventura County and the resulting housing affordability crisis and general economic weakness is a collection of land use policies known as SOAR (Save Open Space and Agricultural Resources). Representing the most stringent urban growth controls of any county in the United States, SOAR requires a majority vote of the entire county electorate in order to authorize the land use changes that are necessary for expansion of developable land in the county. Combined with a powerful anti-growth sentiment among the County’s electorate, SOAR results in a tremendous scarcity of new housing.

Advocates of SOAR claim to be the protectors of Ventura County’s unique character and quality of life. Current economic conditions seriously undermine this claim. The hubris of SOAR’s supporters is that they assume that Ventura County can be prevented from changing and that

an idealized vision of Ventura County can be preserved. Ventura County is changing. In fact, its character and quality of life are being hollowed out as the County’s economic vitality wanes. The question for voters and for public officials is whether we will seek to actively guide how the County is changing or if we will simply resign ourselves to allowing the changes that are exemplified by a shrinking population and an anemic economy.

The responses of leaders across the county to current economic conditions have been mixed. As we did a year ago, we will use this space to praise the response in the City of Thousand Oaks. Both the Thousand Oaks City Manager’s office and City Council seem to understand the grave nature of the current economic outlook. Thousand Oaks is being very progressive in the way that they design and implement policies which earnestly address the housing shortage and the broader economic weakness that has resulted. In the past year, we have already seen similar efforts spring up in other cities across the county. In the year ahead, we long to see political courage spread like the wildfires that have dominated Ventura County’s landscape these past few years.


6

A. INDUSTRIES AND OCCUPATIONSOver the past 12 months, Ventura County’s labor market saw relative strength in the Construction and Durable Goods Manufacturing sectors. Construction saw the strongest gains, with 7.1% more jobs added. Waves of reconstruction following the Thomas and Woolsey fires certainly account for a significant share of this growth. Despite these recent gains, the number of jobs in Construction are still down more than 10% since the pre-recession high. Jobs in Durable

Goods Manufacturing grew 5.0% in 2018. Although still down nearly 20% from the pre-Recession level, recent job growth in Durable Goods Manufacturing is a bright spot worth celebrating and cultivating. Educational & Health Services and Transportation & Warehousing were the third and fourth fastest growing sectors of the labor market, with 3.7 and 3.4% job growth respectively.

EXHIBIT A-1 VENTURA COUNTY’S JOB MARKET

The two weakest sectors of the non-farm, non-extraction labor market (which excludes the highly volatile sectors of Agriculture and Natural Resources & Mining) were Non-Durable Goods Manufacturing and Financial Activities. The number of jobs in Non-Durable Manufacturing declined by 2.9% in 2018. The sector is now down 27.8% since before the recession. Financial Activities saw a loss of 2.3% of jobs in 2018, leaving the sector down 27.1% since the recession.

We remind readers that Ventura County was the last county in Southern California to recover the number of jobs lost during the Great Recession. If we remove Educational & Health Services and Leisure & Hospitality, the Ventura County

labor market is still down more than 14 thousand jobs since the Recession.

The latest jobs data are consistent with the ongoing compositional transformation that Ventura County has undergone over the past 10 years. Since the Great Recession, jobs in high-paying sectors, especially goods producing sectors, are in sustained decline. Jobs in these sectors are moving out of the County and often out of the state in search of lower cost and more business-friendly environments. Meanwhile, jobs in low paying, service-oriented sectors are on the rise.

Changes During the Last Year Changes Since the Great Recession

not seasonally adjusted data 2018 2017 to 2018 2017 to 2018 2007 to 2018 2007 to 2018

Sectors Thousands Change-thousands Percent change Change-

thousands Percent change

Agriculture 24.4 0.6 2.4 0.4 1.6

Natural Resources and Mining 0.9 0.0 -2.8 -0.2 -18.6

Construction 16.8 1.1 7.1 -2.0 -10.7

Durable Goods Manufacturing 19.5 0.9 5.0 -4.3 -18.2

Non-Durable Goods Manufacturing 10.2 -0.3 -2.9 -3.9 -27.8

Wholesale Trade 13.2 -0.1 -0.4 0.1 1.0

Retail Trade 39.6 -0.5 -1.3 2.0 5.3

Transportation, Warehousing, & Utilities

6.4 0.2 3.4 0.2 3.5

Information & Technology 5.0 0.0 -0.7 -0.8 -14.2

Financial Activities 16.5 -0.4 -2.3 -6.2 -27.1

Professional and Business Services 42.9 0.7 1.7 -2.9 -6.4

Educational and Health Services 47.6 1.7 3.7 15.4 47.9

Leisure and Hospitality 37.7 0.5 1.3 5.8 18.1

Personal, Repair, & Maintenance Services

9.4 -0.2 -2.2 -0.5 -5.2

Government 46.9 -0.1 -0.1 3.8 8.9

TOTAL ALL INDUSTRIES 336.8 4.1 1.2 6.8 2.1

Source: CA Employment Development DepartmentData are full-year averages

7


EXHIBIT A-2 VENTURA COUNTY INDUSTRY DATA

This compositional change has important implications. First, it underscores the fact that gross labor productivity is declining in Ventura County. As a result, jobs growth exceeds

GDP growth. Few places in California or the Nation exhibit this pattern. Its presence implies stagnant per capita income growth and declining economic strength.

not seasonally adjusted data Employment (Jobs) Average Salary - Annualized (thousands of dollars)

2018 Q4 2001 2018 Change % Change

AGRICULTURE,FORESTRY,FISHING & HUNTING 22,614 20.6 34.8 14.3 69.2

MINING 890 54.6 101.4 46.7 85.5

UTILITIES 927 57.1 113.7 56.6 99.0

CONSTRUCTION 17,002 35.6 61.2 25.5 71.6

MANUFACTURING-DURABLE 19,379 52.4 74.8 22.4 42.7

MANUFACTURING-NONDURABLE 10,107 83.0 139.8 56.8 68.5

WHOLESALE TRADE 13,109 46.6 83.4 36.8 79.1

RETAIL TRADE 40,671 25.6 33.8 8.2 32.0

TRANSPORTATION & WAREHOUSING 5,396 31.8 49.2 17.4 54.8

INFORMATION 4,931 54.5 75.1 20.7 37.9

FINANCE & INSURANCE 12,041 52.0 91.2 39.1 75.2

REAL ESTATE & RENTAL & LEASING 4,154 32.5 55.9 23.4 72.0

PROFESSIONAL, SCIENTIFIC, & TECHNICAL SERVICES 17,122 53.2 79.8 26.6 50.0

MANAGEMENT OF COMPANIES AND ENTERPRISES 7,226 42.4 180.8 138.4 326.7

ADMIN & SUPPORT & WASTE MGMT & REMEDIATION 19,343 22.9 43.4 20.5 89.4

EDUCATIONAL SERVICES 5,351 26.2 37.9 11.7 44.5

HEALTH CARE & SOCIAL ASSISTANCE 40,982 34.7 48.5 13.8 39.7

ARTS, ENTERTAINMENT, & RECREATION 5,209 21.6 29.3 7.6 35.2

ACCOMMODATION & FOOD SERVICES 32,526 13.6 21.7 8.0 58.8

PERSONAL, REPAIR, AND MAINTENANCE SERVICES 8,217 21.7 34.5 12.8 58.9

FEDERAL GOVT 7,351 56.9 93.9 37.0 65.0

STATE GOVT 2,143 37.6 61.3 23.7 63.0

LOCAL GOVT 36,671 40.0 62.5 22.5 56.4

ALL INDUSTRIES, TOTAL NUMBER OF JOBS 333,363

AVERAGE SALARY, ALL INDUSTRIES 37.7 58.4 20.6 54.7

MEDIAN SALARY, ALL INDUSTRIES 37.6 61.3 23.7 63.0

Source: California Employment Development Department (QCEW data program)


8

Source: CA Department of Employment Development

EXHIBIT A-3 UNEMPLOYMENT RATE

The County’s monthly unemployment rate was 3.2% in September, near an all-time low. The most recent seasonally-adjusted quarterly figure was 3.5%. The CERF team views the unemployment rate as a poor indicator of labor market strength. To understand why, consider the fact that the unemployment rate declined each year from 2013 until 2017, falling from 8.6 percent to 4.4 percent. During each of those

same five years, the labor force contracted. In this case, labor force growth proved to be a better indicator than the unemployment rate of the true strength of the labor market and the broader regional economy. Labor force contraction proved to be the canary in the economic coal mine, back in 2013 before either GDP or population growth turned negative.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1

2011Q3

2012Q1

2012Q3

2013Q1

2013Q3

2014Q1

2014Q3

2015Q1

2015Q3

2016Q1

2016Q3

2017Q1

2017Q3

2018Q1

2018Q3

2019Q1

2019Q3

9


B. DEMOGRAPHICS AND EDUCATION The dominant demographic story in Ventura County is slowing population growth. As already highlighted, Ventura County’s population growth has slowed so much that the population actually declined in 2018. In that year, Ventura County’s population growth rate was -0.1%. There is no other single year during the history for which we have data (considering either DOF’s full calendar year estimates or the

Census Bureau’s July 1 estimates) that Ventura’s population growth was negative. That is to say, the current condition is unprecedented. Even in 2005, at the height of the housing bubble, as irrational home price appreciation was driving people away from Ventura County in record numbers, the County’s population still grew by 0.4% according to DOF and by 0.03% according to the Census Bureau’s July 1 reading.

EXHIBIT B-1 POPULATION GROWTH

Source: California Department of Finance

Meanwhile, international migration to Ventura County is very low, relative to the average rate of international migration between 2000 to 2010 and relative to domestic migration.

Currently, net domestic migration dominates net international migration, and in 2018 the county experienced its fifth straight year of negative total migration.

EXHIBIT B-2 NET MIGRATION

Source: California Department of Finance

-10,000

-5,000

0

5,000

10,000

15,000

20,000

1971

1972

1973

1974

1975

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

2014

2015

2016

2017

2018

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

19911990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


10

EXHIBIT B-3 POPULATION & COMPONENTS OF CHANGE 2000 TO 2018

Ventura County’s population continues to age more rapidly than comparable geographies. Whereas the median age in Ventura County was higher than the state’s in 2000 and lower than the Nation’s, Ventura County’s median age is now higher than that of either of these larger geographies. Over the past 18 years, the share of Ventura County’s population that is over age 65 has increased by 5.3 percentage points. The share increased by half a percentage points in the last 12 months alone. Over that same period, the share increased 3.6 percentage points in the United States and 3.7 in California. Admittedly, during the past 12 months, the State of California’s

share of population over 65 increased more rapidly than Ventura County’s. We view this more as natural volatility than the leading indicator of a change in trend.

The demographic shift represented by Ventura County’s relatively rapid aging is largely the result of Ventura County’s relatively unfavorable net domestic migration flows. People leaving Ventura County in search of opportunity elsewhere in the U.S. tend to be younger than those migrating to Ventura County.

Year Population (July 1)

Percent Change

Persons Added Each

YearBirths Deaths Natural

Increase Net Migration Net Foreign Immigration

Net domestic Migration

2000 756,902 1.90 14,077 11,638 4,761 6,877 7,200 3,457 3,743

2001 768,991 1.60 12,089 11,585 4,759 6,826 5,263 4,444 819

2002 779,894 1.42 10,903 11,430 4,782 6,648 4,255 2,926 1,329

2003 789,367 1.21 9,473 11,871 4,828 7,043 2,430 3,075 -645

2004 795,046 0.72 5,679 11,915 5,151 6,764 -1,085 3,150 -4,235

2005 796,867 0.23 1,821 12,004 4,580 7,424 -5,603 2,405 -8,008

2006 801,225 0.55 4,358 12,370 4,943 7,427 -3,069 2,660 -5,729

2007 805,911 0.58 4,686 12,362 4,807 7,555 -2,869 3,269 -6,138

2008 812,028 0.76 6,117 12,157 4,996 7,161 -1,044 3,646 -4,690

2009 818,546 0.80 6,518 11,845 4,927 6,918 -400 2,819 -3,219

2010 825,378 0.83 6,832 11,171 4,932 6,239 593 1,959 -1,366

2011 831,670 0.88 7,233 11,005 5,059 5,946 1,287 1,837 -550

2012 836,887 0.63 5,217 10,524 5,005 5,519 -302 2,045 -2,347

2013 844,358 0.89 7,471 10,529 5,366 5,163 2,308 2,046 262

2014 848,614 0.50 4,256 10,327 5,338 4,989 -733 1,754 -2,487

2015 852,778 0.49 4,164 10,316 5,648 4,668 -504 2,072 -2,576

2016 853,901 0.13 1,123 9,932 5,636 4,296 -3,173 1,824 -4,997

2017 854,987 0.13 1,086 9,458 5,804 3,654 -2,568 2,108 -4,676

2018 855,489 0.06 502 9,194 6,132 3,062 -2,560 2,107 -4,667

Published by: CLU Center for Economic Research and Forecasting, Source: CA Department of Finance

11


EXHIBIT B-4 SHARE OF POPULATION OVER AGE 65 (PERCENT)

As in previous years, data on Educational Attainment in Ventura County seem relatively favorable. The share of Ventura County’s population with a bachelor’s degree is comparable to California’s and higher than that of the United

States. Educational attainment is high and increasing in the county. Interestingly, the share of the population with a Bachelor’s degree declined during the past year across all three geographies.

EXHIBIT B-5 EDUCATIONAL ATTAINMENT

Source: U.S. Bureau of Census (Decennial Census, ACS 1-year estimates)

United States California Ventura County

Education Attainment in Persons > 25 Years HS Diploma BA or Higher HS Diploma BA or Higher HS Diploma BA or Higher

2005 84.1% 27.2% 80.1% 29.5% 83.0% 29.8%

2010 85.6% 28.2% 80.7% 30.1% 82.1% 30.8%

2015 87.1% 30.6% 82.2% 32.3% 82.9% 32.7%

2016 87.5% 31.3% 82.4% 32.9% 84.1% 33.6%

2017 88.0% 32.0% 83.3% 33.6% 85.1% 33.4%

2018 87.3% 30.9% 82.5% 32.6% 84.0% 32.6%

EXHIBIT B-6 EDUCATIONAL ATTAINMENT DETAIL 2018

Source: U.S. Bureau of Census (ACS 1-year estimates)

United States % California % Ventura County %ESTIMATED POP AGE 25+ BY EDU. ATTAINMENT

223,158,847 26,815,644 576,636

Less than 9th grade 11,083,738 5.0 2,396,226 8.9 53,326 9.2

9th to 12th, no diploma 14,960,425 6.7 1,958,791 7.3 31,454 5.5

High School Graduate (includes equivalency)

59,961,893 26.9 5,559,362 20.7 116,809 20.3

Some college, no degree 45,224,654 20.3 5,589,646 20.8 129,340 22.4

Associate's degree 19,177,676 8.6 2,140,543 8.0 58,431 10.1

Bachelor's degree 44,599,186 20.0 5,704,852 21.3 117,297 20.3

Graduate or professional degree

28,151,275 12.6 3,466,224 12.9 69,979 12.1

HISPANIC/LATINO 34,244,734 9,037,686 212,680

High school graduate or higher 23,857,471 69.7 5,937,394 65.7 142,397 67.0

Bachelor's degree or higher 5,810,105 17.0 1,225,685 13.6 26,859 12.6


United States California Ventura County2000 SHARE 12.4 10.6 10.2

Median age 35.3 33.3 34.2

2018 SHARE 16.0 14.3 15.5

Median age 38.2 36.7 38.4

CHANGE ('00 TO '18) 3.6 3.7 5.3

2.9 3.4 4.2


12

C. INCOMES AND POVERTYBoth average and median household incomes are significantly higher in Ventura County than in the United States or California. In 2018, Ventura County’s median household income was 12% higher than California’s and 37% higher than the Nation’s. About 42% of Ventura County households have incomes greater than 100,000 dollars compared to 38% for the State and only 29% for the Nation. Although incomes are higher in Ventura County than the comparison regions, income growth is slower. Ventura County’s median income increased just 2% between 2017 and 2018. Median income grew 3% in the United States and 5% in California. The growth of median income was slower across all three geographies in 2018 compared to 2017.

While average income is relatively favorable in Ventura County compared to California and the nation, there continues to be a mismatch between average income and cost of living. According to CAR data, the median home price in both California and Ventura County is close to seven times the median income. By comparison, the median home price in the U.S. is less than four times the median income. Higher incomes in both Ventura County and California are more than offset by increased costs of living. And in Ventura County, the dislocation of homes and places of work introduces additional costs of living in the form of increased commute times. As noted previously, 120,000 people cross the Ventura County line each day sorting between home and work.

EXHIBIT C-1 INCOME AND INCOME DISTRIBUTION 2018

Ventura County’s higher incomes are accompanied by significantly lower rates of poverty than either the United States or California.

EXHIBIT C-2 POVERTY AND INCOME, 2018

United States % California % Ventura County %ESTIMATED HOUSEHOLDS BY HH INCOME 121,520,180 13,072,122 271,980

Income < $10,000 7,655,771 6.3% 666,678 5.1% 9,791 3.6%

Income $10,000 - $14,999 5,225,368 4.3% 509,813 3.9% 7,615 2.8%

Income $15,000 - $24,999 10,936,816 9.0% 980,409 7.5% 16,319 6.0%

Income $25,000 - $34,999 10,815,296 8.9% 941,193 7.2% 16,863 6.2%

Income $35,000 - $49,000 15,068,502 12.4% 1,359,501 10.4% 29,374 10.8%

Income $50,000 - $74,999 21,144,511 17.4% 2,039,251 15.6% 38,349 14.1%

Income $75,000 - $99,999 15,311,543 12.6% 1,607,871 12.3% 39,165 14.4%

Income $100,000 - $149,999 18,228,027 15.0% 2,169,972 16.6% 51,676 19.0%

Income $150,000 - $199,999 8,020,332 6.6% 1,163,419 8.9% 28,830 10.6%

Income $200,000 + 9,235,534 7.6% 1,620,943 12.4% 33,726 12.4%

ESTIMATED MEAN INCOME $87,864 $107,384 $110,437

ESTIMATED MEDIAN HOUSEHOLD INCOME $61,937 $75,277 $84,566

Source: US Census Bureau, ACS 1-year Estimates

United States California Ventura CountyPOVERTY

People of All Ages in Poverty 11.8% 12.8% 9.5%

Median Household income 57,652 67,169 81,972

Per Capita Income 31,177 33,128 35,771


13


Ventura County’s poverty rate seems to be lower and more stable. While poverty rates actually declined significantly in the United States and in California between 2017 and 2018 (by 1.6 and 0.5 percentage points, respectively), the poverty rate in Ventura County held steady. Since the recessionary-high level

of poverty, Ventura County’s poverty rate has declined just 1.2 percentage points. Over the same period, the U.S. poverty rate declined 3.5 percentage points and the California rate dropped 3.0 percentage points.

EXHIBIT C-3 POVERTY AND INCOME

It is important to distinguish between a low poverty rate and abundant economic opportunity which lifts people out of poverty. The evidence is that Ventura County lacks the latter. In Ventura County, upward economic mobility often requires leaving the County for lower cost, more generous and more growth-friendly environments. Ventura County’s negative net domestic migration bears this out.

More evidence that higher average incomes and a lower poverty rate do not necessarily translate to greater prosperity is provided by the Brookings Institution Metro Monitor. The 2019 Metro Monitor report considers the 100 largest metropolitan areas in the United States. It ranks Oxnard/Ventura/Thousand Oaks number 96 out of 100 for prosperity. Only 4 of the largest metro areas in the United

States exhibit lower prosperity than Ventura County. Ventura County’s ranking is the same for both the past year and the past decade. Thousand Oaks and the surrounding metro area ranked in the bottom 10 for economic growth over both of these periods.

You see, economic growth and prosperity are highly correlated. Foregoing economic growth means foregoing broadly shared prosperity. Many of those who claim to champion Ventura County’s unique “quality of life” are, in effect, championing the well-being of a class of economic elites whose prosperity is independent of the local economy. This protects a definition of quality of life that is not accessible to the overwhelming majority of Ventura County’s residents.

United States California Ventura County

People of All Ages in

Poverty

Median Household

income

Per Capita Income


Poverty

Median Household

income

Per Capita Income


Poverty

Median Household

income

Per Capita Income

2005 13.3% 46,242 25,035 13.3% 53,629 26,800 9.9% 66,859 29,634

2010 15.3% 52,250 26,059 15.8% 57,708 27,353 10.7% 71,864 31,135

2015 14.7% 55,775 29,979 15.3% 64,500 31,587 9.6% 80,032 34,226

2016 14.0% 57,617 31,128 14.3% 67,739 33,389 9.5% 80,135 35,298

2017 13.4% 60,336 32,397 13.3% 71,805 35,046 9.5% 82,857 36,907

2018 11.8% 57,652 31,177 12.8% 67,169 33,128 9.5% 81,972 35,771



14

EXHIBIT C-4 METRO MONITOR 2019: PROSPERITY

Source: 2019 Brookings Metro Monitor (https://www.brookings.edu/research/metro-monitor-2019/)

OXNARD-THOUSAND OAKS-VENTURA, CA 96TH OF 100

1-20 1-2021-40 21-40 21-40

BEST PERFORMING WORST PERFORMING

PROSPERITY INDEX

15


-10.0

-5.0

0.0

5.0

10.0

15.0

Jan

2015

Mar

2015

May

2015

Jul2

015

Sep

2015

Nov

2015

Jan

2016

Mar

2016

May

2016

Jul2

016

Sep

2016

Nov

2016

Jan

2017

Mar

2017

May

2017

Jul

2017

Sep

2017

Nov

2017

Jan

2018

Mar

2018

May

2018

Jul2

018

Sep

2018

Nov

2018

Jan

2019

Mar

2019

May

2019

Jul

2019

Sep

2019

Median Price (year on year percent change) 6 month moving average

D. HOUSING MARKETSVentura County’s housing market is clearly faltering. Home price growth has slowed significantly, with street price growth averaging 0.8% for the past eleven months. The six-month moving average of price growth has been falling secularly

for the same eleven months and was essentially zero for September, the last month for which we have data. Given that local inflation runs in the 2-3% range, we might suspect that inflation-adjusted home price growth is negative.

EXHIBIT D-1 VENTURA COUNTY: EXISTING HOMES

Sources: DataQuick/CoreLogic, CERF

This turns out to be correct. The next chart shows that inflation-adjusted home prices contracted in eight of the last 14 months. The 14-month average is negative 1.3%,

and the six-month moving average is negative 2.9%. The six-month moving average has been falling for most of the past 21 months.

EXHIBIT D-2 VENTURA COUNTY: EXISTING HOMES

Sources: DataQuick/CoreLogic, US-BLS, CERF

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Jan

2015

Mar

2015

May

2015

Jul2

015

Sep

2015

Nov

2015

Jan

2016

Mar

2016

May

2016

Jul2

016

Sep

2016

Nov

2016

Jan

2017

Mar

2017

May

2017

Jul2

017

Sep

2017

Nov

2017

Jan

2018

Mar

2018

May

2018

Jul2

018

Sep

2018

Nov

2018

Jan

2019

Mar

2019

May

2019

Jul2

019

Sep

2019

Real Median Price (year on year percent change) 6 month moving average


16

In 19 of the last 36 months, sales growth has been negative. The sales growth decline lead the price growth decline by at least a year.

EXHIBIT D-3 SALES GROWTH: ALL HOMES

Sources: DataQuick/CoreLogic

2018 was a disappointing year for Ventura County home building, with only 1,229 units permitted. Given the realities of paperwork, delays, and funding issues, the number of homes

actually started was probably at least 5% less. The 2018 permit rate fell 47% from the 2017 permit rate of 2,326 units.

EXHIBIT D-4 NEW HOMES PERMITTED

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

Jan

2015

Mar

2015

May

2015

Jul2

015

Sep

2015

Nov

2015

Jan

2016

Mar

2016

May

2016

Jul2

016

Sep

2016

Nov

2016

Jan

2017

Mar

2017

May

2017

Jul2

017

Sep

2017

Nov

2017

Jan

2018

Mar

2018

May

2018

Jul2

018

Sep

2018

Nov

2018

Jan

2019

Mar

2019

May

2019

Jul2

019

Sep

2019

Sources: Construction Industry Research Board, CERF

0500

1,0001,500

2,0002,5003,0003,5004,0004,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20192018

These permit rates are very low, especially considering inexpensive borrowing costs that make things easier for both developer and homebuyer. Aside from the lows experienced

during and after the Great Recession, current home building rates are historically low for Ventura County. These have impacts on the County’s economy.

17


CONSEQUENCES: INTENDED AND UNINTENDEDLow home building rates restrict the supply of homes in an area, reducing the stock of inventory available. The existing inventory is also limited in product type. From the supply impact, housing costs are higher, a relationship that has been robustly documented in peer-reviewed research in many areas around the country. A lack of new home supply reduces move-up home sales, which restricts the supply of older and/or smaller homes that are attractive to certain buyers. High housing costs reduce affordability and put a damper on sales, especially to workers in many of the County’s local industries.

There is an unintended consequence of restricted home building. Middle and lower-middle class households are shut out of owning a home in the local housing market. That is, unless they wish to double or triple up with other households. Given that housing is the key first step for most households moving up in socioeconomic status, a key rung in the economic mobility ladder is missing. When a median priced home is more than $600,000 perhaps it is more appropriate to say that most of the ladder is missing. A restricted home construction environment is one that contributes to income and wealth inequality. Fewer households have access to the socio-economic mobility path for which the United States is famous.

Home building, or the lack of it, is tightly connected to economic activity. Greater affordability boosts sales. Incomes and expenditures for the financial services industry rises. Construction activity provides jobs for workers in the trades. A new home has a huge multiplier effect, creating jobs and income for many industries other than real estate services such as raw materials, furnishings, appliances, and landscaping. A rational economic development policy should include a rational home-building policy.

MAJOR CITY DETAILIn order to see what patterns of sales and prices have recently prevailed in the County’s major cities, CERF purchased transactions and price data from DataQuick/CoreLogic for Camarillo, Moorpark, Oxnard, Simi Valley, Thousand Oaks, and Ventura.

We built a table from this dataset that is provided on the next page. From this table we see that countywide sales and prices for new housing units are down so far in 2019 compared with the same period in 2018. Sales of existing homes are also down from 2018, implying that total sales (existing as well as new) fell 1.9%. Prices overall (existing as well as new) actually rose, but by only 0.4%, driven by very modest gains in existing home prices dominating declines in new home prices.

The level of prices is fairly even across these cities excepting Thousand Oaks, Moorpark, and Camarillo which exhibit higher prices, especially in the detached category. Existing attached housing prices are amazingly uniform, with the exception of Thousand Oaks which is experiencing somewhat higher prices.

Five of the six communities contributed to countywide declines in new home prices, with San Buenaventura being the exception. Three of the six communities experienced declines in existing attached home prices, Oxnard, Simi Valley, and Thousand Oaks. Only Camarillo experienced declines in existing detached home prices.

FORECASTOur forecast calls for a small improvement to existing home price growth. However, the forecast is consistent with a market that is anemic, with slow price growth, weak sales, and low rates of building activity. The upside risk to home price growth is that Ventura County attracts outside capital looking for a return on a valuable real asset such as coastal California real estate. The downside risk to housing price growth is from Ventura County’s anemic economy, which will reduce local income generation and, with this, the willingness and ability of residents to purchase a home.


18

EXHIBIT D-5 REAL EXISTING MEDIAN HOME PRICE GROWTH


EXHIBIT D-6 EXISTING HOME SALES


-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

Q1

2017

Q2

2017

Q3

2017

Q4

2018

Q1

2018

Q2

2018

Q3

2018

Q4

2019

Q1

2019

Q2

2019

Q3

2019

Q4

2020

Q1

2020

Q2

2020

Q3

2020

Q4

2021

Q1

2021

Q2

2021

Q3

2021

Q4

0

500

1,000

1,500

2,000

2,500

3,000

2007

Q1

2007

Q3

2008

Q1

2008

Q3

2009

Q1

2009

Q3

2010

Q1

2010

Q3

2011

Q1

2011

Q3

2012

Q1

2012

Q3

2013

Q1

2013

Q3

2014

Q1

2014

Q3

2015

Q1

2015

Q3

2016

Q1

2016

Q3

2017

Q1

2017

Q3

2018

Q1

2018

Q3

2019

Q1

2019

Q3

2020

Q1

2020

Q3

2021

Q1

2021

Q3

19


EXHIBIT D-7 CURRENT YEAR HOUSING TRENDS

Jan-Sep 2018 Jan-Sep 2019 Change

Ventura County

Existing unit sales 7,295 7,239 -0.8

Existing median price $577,639 $582,056 0.8

New unit sales 405 312 -23.0

New median price $651,167 $635,056 -2.5

All Homes - unit sales 7,700 7,551 -1.9

All Homes - median price $581,633 $584,040 0.4

Camarillo

New home - median price $564,222 $550,972 -2.3

Existing (attached) - median price $458,011 $458,944 0.2

Existing (detached) - median price $682,833 $677,833 -0.7

Oxnard


Existing (attached) - median price $427,628 $425,028 -0.6

Existing (detached) - median price $504,222 $525,083 4.1

San Buenaventura

New home - median price $631,389 $682,469 8.1



Moorpark

New home - median price $1,070,889 n/a n/a



Simi Valley




Thousand Oaks

New home - median price $1,083,600 $1,040,000 -4.0




20

-0.50

0.00

0.50

1.00

1.50

2.00

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

Center for Economic Research and Forecasting California

-12.00

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

EXHIBIT E-2 NET DOMESTIC MIGRATION

Sources: U.S. Bureau of Census and CERF

The CERF Ventura County economic forecast calls for continued slow growth in economic output. Annual growth of Ventura County GDP is forecasted to range from just 0.2% down to 0.1% from 2019 through 2021. This is an erosion of last year’s forecast, which anticipated that growth would

average 1.0% over the three-year forecast horizon. Given that our forecast for population growth is negative over the same period, there is considerable downside risk to the GDP forecast. It is very possible that economic activity will be zero or even negative during this period.

E. VENTURA COUNTY’S FORECAST2018 marked an important if ominous milestone for Ventura County, as population growth tipped negative for the first time in history. The current forecast anticipates that, driven

by worsening negative net domestic migration, the County’s population will continue to shrink across the entire three-year forecast horizon.

EXHIBIT E-1 NET DOMESTIC MIGRATION

Sources: U.S. Bureau of Census and CERF

Net domestic outflows from Ventura County are forecast to increase more than 20% in the next three years. We anticipate

slow but accelerating population decline over the same period.

21


-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

Center for Economic Research and Forecasting (percent change) Population Growth - Right Scale

EXHIBIT E-3 REAL GDP GROWTH

Sources: U.S. Bureaus of Economic Analysis, Census, and CERF

Jobs in high paying sectors of the economy will continue to decline. In particular, jobs that can be conducted somewhere else at lower cost will continue to leave the county. We anticipate that this pattern will be most obvious in goods producing sectors. Jobs in non-tradable services, jobs which must be completed in proximity to the individuals paying for those services, will remain in the County and

will continue to grow in number. We anticipate continued job growth in Educational & Health Services and Leisure & Hospitality in particular.

Over the three-year forecast horizon, non-farm job growth is anticipated to exceed GDP growth. Average job growth over the period 2019 to 2021 is forecasted to be 0.4%.

EXHIBIT E-4 NON FARM JOB GROWTH

Sources: CA Department of Employment Development and CERF

In the short run, our jobs forecast could prove pessimistic. The flow of jobs out of the county since the recession has been relentless but fairly slow paced. In the next couple of years, growth at the top of the County’s income distribution and the aging of the County’s well-to-do population could continue to fuel rapid growth of service-sector jobs, especially those in Leisure & Hospitality and Healthcare Services.

In the longer term, our jobs forecast could prove optimistic. The current pattern, whereby jobs growth exceeds GDP

growth, is unsustainable. Job growth and GDP are ultimately linked, and if GDP growth continues at a pace near zero, job growth will eventually approach zero as well.

Near-zero GDP and jobs growth would portend stagnant per capita GDP, anemic wage growth and severely limited upward economic mobility for residents of the County, especially those who fall in the lower income brackets.

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e


22

-8.0-6.0-4.0-2.0

0.02.04.06.08.0

10.012.014.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

Ventura County (percent change) California

EXHIBIT E-5 REAL PER CAPITA GDP GROWTH

Sources: U.S. Bureaus of Census and Economic Analysis and CERF

EXHIBIT E-6 REAL PER CAPITA GDP

Sources: U.S. Bureaus of Census and Economic Analysis and CERF

If the current forecast holds, Ventura County will have experienced 8 years during which average economic growth is indistinguishable from zero. Eight years of zero growth. This is truly stunning considering the strong economic legacy of Ventura County. The same County that gave birth to Amgen, the world’s largest independent biotechnology company, the county which is still home to Naval Base Ventura County and the Port of Hueneme, and the County which boasts some of the most valuable agricultural land in the United States if not the world, will foregone nearly a decade of economic

growth and the considerable social and environmental benefits that flow from it.

A return to robust economic growth in Ventura County will require fundamental changes to the policies which drive the current weakness. This must necessarily start with a determined effort to build more housing. Our advice to residents, business leaders, elected officials and policy makers is simple. Don’t wait any longer. If the current cohort of leaders refuses to heed the economic warning signs, they will preside over an entirely preventable economic malaise.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

23


-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e 2022e 2023e

Non-Farm Job Growth Rate Real GDP Growth Rate

EXHIBIT E-7 NON-FARM JOB GROWTH RATE

Sources: CA Employment Development Dept., U.S. Bureau of Economic Analysis, and CERF

EXHIBIT E-8 ALL OCCUPATIONS EMPLOYMENT GROWTH

Sources: CA Employment Development Dept. and CERF

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e 2022e 2023e

Total: All Occupations Employment Growth Non-Farm Job Growth


24

EXHIBIT E-9 VENTURA COUNTY 5-YEAR EMPLOYMENT BY OCCUPATION FORECAST

2013 2018 2019 2023 2013-18 2018-23 2013-18 2018-23

no. of jobs no. of jobs no. of jobs no. of jobs change change percent change

percent change

Total: All occupations 292,930 314,588 316,580 320,914 21,658 4,334 7.4 1.4

Management 16,530 16,510 16,558 16,704 -20 146 -0.1 0.9

Business and Financial Operations

16,710 17,210 17,356 17,700 500 344 3.0 2.0

Computer and Mathematical 6,900 6,770 6,827 6,924 -130 98 -1.9 1.4

Architecture and Engineering 7,190 7,360 7,408 7,566 170 158 2.4 2.1

Life, Physical, and Social Science 4,420 4,118 4,175 3,857 -302 -318 -6.8 -7.6

Community and Social Services 3,960 5,620 5,651 5,797 1,660 146 41.9 2.6

Legal Services 1,940 1,890 1,912 1,976 -50 64 -2.6 3.4

Education, Training, and Library 17,970 20,640 20,775 21,211 2,670 436 14.9 2.1

Arts, Design, Entertainment, Sports, and Media

2,960 3,930 3,896 3,855 970 -40 32.8 -1.0

Healthcare Practitioners and Technical

11,790 15,210 15,728 17,143 3,420 1,416 29.0 9.0

Healthcare Support 7,810 6,610 6,525 6,222 -1,200 -303 -15.4 -4.6

Protective Services 4,010 5,090 5,198 5,719 1,080 521 26.9 10.0

Food Preparation and Serving-Related

28,470 32,010 32,404 33,294 3,540 890 12.4 2.7

Building and Grounds Cleaning and Maintenance

8,410 9,000 9,012 9,219 590 207 7.0 2.3

Personal Care and Services 8,990 15,860 16,030 17,005 6,870 975 76.4 6.1

Sales and Related Services 35,170 35,300 35,628 36,227 130 598 0.4 1.7

Office and Administrative Support

47,820 45,680 46,141 45,755 -2,140 -387 -4.5 -0.8

Farming, Fishing, and Forestry 6,530 5,880 5,745 5,207 -650 -539 -10.0 -9.4

Construction and Extraction 9,790 12,900 12,849 12,472 3,110 -377 31.8 -2.9

Installation, Maintenance, and Repair

9,530 10,020 10,054 10,258 490 204 5.1 2.0

Production 19,140 19,690 19,253 18,756 550 -497 2.9 -2.6

Transportation and Material Moving

16,870 17,290 17,456 18,048 420 592 2.5 3.4

Date: November 6, 2019Source: CA-EDD (OES data program) and CERF

25


F. TECHNICAL APPENDIX: NON-DURABLE MANUFACTURING JOBS ESTIMATION METHODOLOGYRevisions to CA-EDD1 data for Ventura County in March of this year entailed a dramatic restatement of the quantity of jobs in the Non-Durables Manufacturing sector. To illustrate the

change, we provide a chart of the EDD estimates prior to and post the March 2019 revision.

EXHIBIT F-1 NONDURABLE GOODS (JOBS)

The orange bars represent the revised version of the data depicted by the blue line. The monthly profile was not changed much, but the sector was measured to be 43% smaller than previously reported. This sector is critically important to Ventura County’s economy. While it includes Food processing and related industries, it also includes bio-pharmaceutical manufacturing, i.e. Amgen and related companies. These enterprises are highly value added, with a large impact on the regional economy. Included in the EDD’s revised data is a breakout of Chemical manufacturing which would include Amgen and other bio-pharma companies. The March 2019 revised data indicate that there were only 2,300 jobs in Ventura County Chemical manufacturing in January of 2019. However, it is common knowledge that Amgen currently employs about 5,500 people in Thousand Oaks—in fact, this number was confirmed for us by Amgen as recently as mid-October 2019. This was a second aspect of the CES data revisions earlier this year that CERF could not accept.

Amgen has operations in other parts of the country. From time to time, as part of their drive for competitive efficiency, they move certain business units from one location to another in the U.S., or even abroad. One such move occurred in 2017, when Amgen moved their HR and IT departments to Tampa, Florida. These relocations were accompanied

by corresponding workforce reductions in Thousand Oaks (i.e. Ventura County).

It appears that EDD reduced the Ventura County workforce number to reflect the 2017 local workforce reductions but then retroactively removed those jobs from the complete history of Ventura County’s jobs data. Further, it appears that a number of jobs approximately equal to the complete size of Amgen’s Ventura County based workforce were similarly removed. Based on knowledge we have accumulated from tracking the Ventura County economy for close to two decades now, CERF is confident this was an error. Estimates that indicate a sector size of 11,000 jobs, as indicated in the data prior to the March revisions, match our understanding of the reality much better number of jobs in the non-Chemical manufacturing base of the non-durables jobs sector is roughly 4,500 jobs. Given that Amgen is 5,500, then the overall sector should be at least 10,000 jobs strong. We are aware of a number of other smaller bio-technology companies such as Atara Biotherapeutics and Tekada which easily push the number of non-durable goods manufacturing jobs to around 11,000.

The EDD’s own data confirm this. The QCEW2 database system tracks the county’s jobs by sector also, and from that database,

1 EDD: Employment Development Department. This is the Current Employment Statistics database system also known as CES.2 The EDD promulgates jobs data through programs other than CES. Their program Quarterly Census of Employment and Wages, formerly known as ES-202, is data collected (not a

survey) based on the state’s unemployment insurance program.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

20

01Ja

nuar

y 200

0Ja

nuar

y

2001

July

2000

July

2002

Janu

ary

2002

July

2003

Janu

ary

2003

July

2004

Janu

ary

2004

July

2005

Janu

ary

2005

July

2006

Janu

ary

2006

July

2007

Janu

ary

2007

July

2008

Janu

ary

2008

July

2009

Janu

ary

2009

July

2010

Janu

ary

2010

July

2011

Jan

2011

July

2012

Ja

nnua

ry

2012

July

2013

Janu

ary

2013

July

2014

Janu

ary

2014

July

2015

Janu

ary

2015

July

2016

Janu

ary

2016

July

2017

Janu

ary

2017

July

20

18Ja

nuar

y

20

18Ju

ly

MARCH REVISION PRE-REVISION


26

EXHIBIT F-2 MANUFACTURING-NONDURABLE

Given the incredibility of the revised EDD data, we sought to re-profile the EDD’s CES estimates of non-durables manufacturing jobs. Fortunately, data exists from yet another EDD database system, WARN (Worker Adjustment and Retraining Notification), which provides a logical way to develop an algorithm. WARN data are announcements from enterprises, such as Amgen, of upcoming plant closures, layoffs, and relocations. We used this data, which indeed included announcements by Amgen of pending layoffs during the period from 2013 to 2017.

Based on information from our contacts at Amgen, our historical knowledge of Ventura County, and datasets outside of the CES data, Amgen did contract during the period of 2013 through 2017. The pre-2013 CES estimates should be maintained as the QCEW data suggest, then there were

reductions of various kinds, including the well-publicized move of Amgen’s HR and IT departments to Tampa that implied a reduction in the size of Ventura County’s job base in this sector.

Finally, while contractions in the chemical manufacturing segment did occur, they were not as dramatic as the CES database system suggests. With all of these factors, CERF created estimates of the jobs in Non-durables manufacturing from January 2000 to September of 2019. We provide a chart where the blue line shows what the EDD-CES was saying a year ago, the orange bars show what the EDD-CES is saying currently, and the gray line shows CERF’s revised estimates which imbed the EDD-WARN data. The gray line represents the estimates for this sector that CERF subsequently used in the current forecast.

EXHIBIT F-3 NONDURABLE GOODS (JOBS)

The larger takeaway is that the decline in the gray line above is correlated with other economic indicators for the county, especially GDP. The local area GDP numbers indicate that for 2016 and 2017, Non-Durables manufacturing GDP dropped by half a billion dollars in each of those years. These

contractions were instrumental to the overall negative GDP growth numbers experienced by Ventura County in those years. When a very large and high value enterprise contracts in a county that is only about 2% of the state’s economy, it will have an impact.

02,0004,0006,0008,000

10,00012,00014,00016,000

2009Q1

2008Q1

2007Q1

2006Q1

2005Q1

2004Q1

2003Q1

2002Q1

2001Q1

2010Q1

2011Q1

2012Q1

2013Q1

2014Q1

2015Q1

2016Q1

2017Q1

2018Q1

we saw estimates of 2017 nondurables manufacturing jobs in the range of 12,000 jobs and estimates for 2018 of a bit more than 6,000. While this is dramatically more accurate than the CES measure of Non-Durables jobs, it implies a sudden and massive cliff that is difficult to believe. QCEW data seem

to indicate a loss of 50% of the total number of jobs in Non-Durable Goods Manufacturing. Companies and industries do downsize, of course, but it typically plays out a bit over time rather than being a drop of 5,000 jobs in just one month!

02,0004,0006,0008,000

10,00012,00014,000

20

12Ja

nuar

y 20

12Se

ptem

ber

2012

Nov

embe

r 20

13Se

ptem

ber

2013

Nov

embe

r 20

14Se

ptem

ber

2014

Nov

embe

r 20

15Se

ptem

ber

2015

Nov

embe

r 20

16Se

ptem

ber

2016

Nov

embe

r 20

17Se

ptem

ber

2017

Nov

embe

r 20

18Se

ptem

ber

2019

Sept

embe

r 20

18N

ovem

ber

2012

Mar

ch

2012

May

20

12M

arch

2012

May

20

14M

arch

2014

May

20

15M

arch

2015

May

20

16M

arch

20

17M

arch

2016

May

2017

May

20

18M

arch

2018

May

20

19M

arch

2019

May

2012

July

2013

Janu

ary

2013

July

2014

Janu

ary

2014

July

2015

Janu

ary

2015

July

20

16Ja

nuar

y

2016

July

2017

Janu

ary

2017

July

2018

Janu

ary

2019

Janu

ary

20

18Ju

ly 20

19Ju

ly

EDD-CURRENT ESTIMATES EDD: PRE-REVISION CERF’S ESTIMATES

SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS900 Wilshire Blvd., Ste. 1700, Los Angeles, CA 90017Phone: (213) 236-1800www.scag.ca.gov

IMPERIAL COUNTY1503 North Imperial Avenue, Suite 104El Centro, CA 92243Phone: (760) 353-7800

ORANGE COUNTYOCTA Building600 South Main Street, Suite 741Orange, CA 92868Phone: (714) 542-3687

RIVERSIDE COUNTY3403 10th Street, Suite 805Riverside, CA 92501Phone: (951) 784-1513

SAN BERNARDINO COUNTYSanta Fe Depot1170 West 3rd Street, Suite 140San Bernardino, CA 92418Phone: (909) 806-3556

VENTURA COUNTY950 County Square Drive, Suite 101Ventura, CA 93003Phone: (805) 642-2800

#SoCalEconomy@SCAGmpo@SCAGnews

NETWORK: SCAGPASSWORD: scag2018

ventura county - californiaeconomy.scag.ca.gov/economy site document library... · ventura...

Documents