2013 Industry Panel: Job Growth... fact or fiction?

Thanks to sponsor Alex Hayden ’95CEO, Cushman and Wakefield and

Chair of Career and Industry Partnerships, Chapman50

A. GARY ANDERSON CENTER FOR ECONOMIC RESEARCHARGYROS SCHOOL OF BUSINESS AND ECONOMICS

Presented by

Esmael Adibi, Ph.D.

NBER Recession & Recovery Indicators

Real GDP

Personal Income Less Transfer Payments

Industrial Production

Real Sales Value of Manufacturing, Wholesale & Retail Sector

Employment

Recessions’ Impact

% C

hang

e / R

eal G

DP

Series1

-7

-6

-5

-4

-3

-2

-1

0

% Change / Employment

2007

1948

1957

1981

19531960

20011969

1990

1980

1973

0%

-1%

-2%

-3%

-4%

-5%

-6%

-7%-6% -5% -4% -3% -2% -1%-7% 0%

Recessions’ Impact

% C

hang

e / R

eal G

DP

Series1

-7

-6

-5

-4

-3

-2

-1

0

% Change / Employment

2007

1948

1957

1981

19531960

20011969

1990

1980

1973

0%

-1%

-2%

-3%

-4%

-5%

-6%

-7%-6% -5% -4% -3% -2% -1%-7% 0%

Real GDP Growth

Employment

Inflation

Long-term Interest Rates

Corporate Profits

Government Purchases

Consumption

Investment

Net Exports

Fiscal Policy

Monetary Policy

Real GDP & Payroll Employment2007-09 Recession and Recovery

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2190

95

100

105

Index

Quarters

Real GDP

Payroll Employment

+3.2%

-2.1%

-4.7%-6.2%

’07 Q4’11 Q4

’08 Q1

10:1

10:2

10:3

10:4

11:1

11:2

11:3

11:4

12:1

12:2

12:3

12:4

13:1

13:2f

13.3f

13:4f

14:1f

14:2f

14:3f

14:4f

0

1

2

3

4

Real GDP

Yr/Yr % Change Annual % Change

2.4

1.8 2.02.2

2.7

Payroll Employment

'07 '08 '09 '10 '11 '12 '13f '14f-9,000

-6,000

-3,000

0

3,000

6,000

1,115

-3,617-5,052

1,0222,103 2,193 2,210 2,440

In Thousands

U.S.

'06 '07 '08 '09 '10 '11 '12-8

-4

0

4

Payroll Job Growth

Annual % Change

OC

U.S.

Change in Payroll EmploymentDec. 2011 to Dec. 2012

Orange County

SectorsConstructionFinancial ActivitiesEducational & Health ServicesLeisure & HospitalityProfessional & Business ServicesInformationManufacturingTrade, Transportation & UtilitiesGovernmentOther ServicesTotal Nonfarm

4,300

5,700

7,900

6,900

8,200

600

1,800

400

-1,000

-400

34,400

Change % Change

6.2

5.4

4.9

3.9

3.3

2.5

1.2

0.2

-0.7

-0.9

2.5

07:4

08:1

08:2

08:3

08:4

09:1

09:2

09:3

09:4

10:1

10:2

10:3

10:4

11:1

11:2

11:3

11:4

12:1

12:2

12:3

12:4

1,300

1,400

1,500

1,600

1,522

1,360

1,424

Payroll Employment Orange County

In Thousands

-162,000 jobs

+64,000 jobs

Not Seasonally Adjusted

07:4

08:1

08:2

08:3

08:4

09:1

09:2

09:3

09:4

10:1

10:2

10:3

10:4

11:1

11:2

11:3

11:4

12:1

12:2

12:3

12:4

120

140

160

180

146

155

168

Educational & Health ServicesOrange County

In Thousands of Jobs

+9,000 jobs+13,000 jobs

Not Seasonally Adjusted

07:4

08:1

08:2

08:3

08:4

09:1

09:2

09:3

09:4

10:1

10:2

10:3

10:4

11:1

11:2

11:3

11:4

12:1

12:2

12:3

12:4

130

160

190178

150

158

ManufacturingOrange County

In Thousands of Jobs

-28,000 jobs

+8,000 jobs

Not Seasonally Adjusted

07:4

08:1

08:2

08:3

08:4

09:1

09:2

09:3

09:4

10:1

10:2

10:3

10:4

11:1

11:2

11:3

11:4

12:1

12:2

12:3

12:4

40

80

120

100

6974

ConstructionOrange County

In Thousands of Jobs

-31,000 jobs

+5,000 jobs

Not Seasonally Adjusted

The Most Influential Economic Variables Affecting Job Outlook

Projected Impact

2009 2010 2011 2012 2013 2014

Real GDP

Real Exports

Construction Spending

-3.1%

-9.1%

-26.6%

+2.4% +1.8% +2.2%

+11.1% +6.7% +3.4%

-33.7% -4.9%

+10.7%

+2.0% +2.7%

The Most Influential Economic Variables Affecting Job Outlook

Projected Impact

2009 2010 2011 2012 2013 2014

Real GDP

Real Exports

Construction Spending

-3.1%

-9.1%

-26.6%

+2.4% +1.8% +2.2%

+11.1% +6.7% +3.4%

-33.7% -4.9%

+10.7%

+2.0%

+1.2%

+2.7%

+2.3%

The Most Influential Economic Variables Affecting Job Outlook

Projected Impact

2009 2010 2011 2012 2013 2014

Real GDP

Real Exports

Construction Spending

-3.1%

-9.1%

-26.6%

+2.4% +1.8% +2.2%

+11.1% +6.7% +3.4%

-33.7% -4.9%

+10.7%

+2.0%

+1.2%

+15.4%

+2.7%

+2.3%

+17.6%

Job Growth

'09 '10 '11 '12 '13f '14f-12

-6

0

6

-7.4

-1.3

1.12.3 2.3 2.6

Annual % Change +32KJOBS

ORANGE COUNTY

+37KJOBS

+32KJOBS+15K

JOBS

Job Growth by Sector & Average Pay Per Worker

Above Average

Construction

Professional & Business Services

Education & Health Care Services

Leisure & Hospitality

Financial Services

Below Average

Retail Trade

Manufacturing

Information

State & Local Government

Federal Government

($61K)

($66K)

($54K)

($21K)

($98K)

($51K)

($67K)

($78K)

($53K)

($73K)

Orange County

Job Growth by Sector

F O R I N T E R N A L U S E O N L Y

Health Care Sector

Christopher de Rosa,President of Cigna- Western Region

F O R I N T E R N A L U S E O N L Y

22Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

F O R I N T E R N A L U S E O N L Y

23Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

F O R I N T E R N A L U S E O N L Y

24Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna

F O R I N T E R N A L U S E O N L Y

"Cigna" is a registered service mark and the "Tree of Life" logo and “GO YOU” are service marks of Cigna Intellectual Property, Inc., licensed for use by Cigna Corporation and its operating subsidiaries. All products and services are provided by such operating subsidiaries and not by Cigna Corporation. Such operating subsidiaries include Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna Dental Health, Inc. All models are used for illustrative purposes only.

000000 00/12 © 2012 Cigna. Some content provided under license.

Chapman 50 Industry Job Growth Panel

Matthew JenusaitisPresident, OCTANeJuly 23, 2013

Where people and ideas come together with capital and resources to fuel Orange

County’s high technology ecosystem

Future Job Requirements

Science and Technology: 131,300 Jobs

2020

2020: 131,300Today: 111,900Requirement: 19,400

New Jobs Requirement

Science and Technology: 111,900 Jobs

2012

IT Sector Job Growth

Employment0 5,000 10,000 15,000 20,000

25,000

$0

$1

$2

$3

Payro

ll ($

Bill

ions)

Hardware

Software2002: 1,171 Companies

2011: 1,643 Companies

2002: 296 Companies

2011: 223 Companies

Life Science Sector Job Growth

Employment0 4,000 8,000 12,000

14,000

$0

$0.5

$1

$1.5

Payro

ll ($

Bill

ions)

Pharma/Biotech

Devices2002: 124 Companies

2011: 134 Companies

2002: 84 Companies

2002: 97 Companies

Where the Money Is ($MM)Orange County Investments in Q1 2013

Source: PWC Moneytree

LaunchPad 2010-2013 Economic Impact

Companies FundedCapital Raised

Since 2004CompaniesFunding

2010 2011

Jobs CreatedDirectIndirectMultiplierTotal Jobs

County Taxes GeneratedState Taxes Generated

11

$7.3MM

113

91

77

281

$1.5MM

$130,000

21

$15.9MM

193

143

156

492

$2.5MM

$372,000

$218MM

2012

27

$77MM

$325MM

314

404

333

1,033

$5.3MM

$783,000

2013*

9

$19MM

$382MM

171

Jobs Created by LaunchPad Companies

Direct and Indirect Job Creation

Note 1: Includes Bureau of Labor Statistics multiplier effect

0

200

400

600

800

1000

1200

2007 2008 2009 2010 2011 2012

Goal: 10,000 Jobs by 2020

Thank You

Housing Sector

35

Richard Douglass,

Division President, Ryland Homes- Southern California

Observations as of July 2013

• Significant price appreciation in past 12-18 months.

• Premium locations gain premium pricing.

• There is Irvine and then there is the rest of the world.

• Media reports over-generalize- there are still areas of slow housing recovery.

• Quality labor in VERY short supply.

• Regulation will still inhibit growth.

• Next phases of land development will be more capital intensive

36

37

Orange County Permits

0

2,000

4,000

6,000

8,000

10,000

12,000

14,00019

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

13-0

520

13P

2014

P20

15P

Orange County MSA Building Permits

MF

SF

Source: Census Bureau and John Burns Real Estate Consulting

3838

San Diego Permits

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

-05

2013

P

2014

P

2015

P

San Diego MSA Building Permits

MF

SF

Source: Census Bureau and John Burns Real Estate Consulting

39

39

Riverside-SB Permits

0

10,000

20,000

30,000

40,000

50,000

60,0001

990

199

11

992

199

31

994

199

51

996

199

71

998

199

92

000

200

12

002

200

32

004

200

52

006

200

72

008

200

92

010

201

12

012

201

3-0

52

013

P2

014

P2

015

P

Riverside-SB MSA Building Permits

MF

SF

Source: Census Bureau and John Burns Real Estate Consulting

40

Los Angeles Permits

0

5,000

10,000

15,000

20,000

25,000

30,0001

990

199

11

992

199

31

994

199

51

996

199

71

998

199

92

000

200

12

002

200

32

004

200

52

006

200

72

008

200

92

010

201

12

012

201

3-0

52

013

P2

014

P2

015

P

Los Angeles MSA Building Permits

MF

SF

Source: Census Bureau and John Burns Real Estate Consulting

Construction EmploymentNumber of construction jobs pre-recession and post-recession:

Statewide•2006 – 933,700 peak•2010 – 559,800 bottom•2013 – 603,400 current

 

Orange County•2006 – 106,600 peak•2010 – 68,000 bottom•2013 – 72,100 current

 

Southern California•2006 – 412,100 peak•2011 – 227,600 bottom•2012 – 207,200

*No recent data from all SoCal counties (LA, Orange, Ventura). We can only speculate that

Riverside and San Bernardino have been consistent in employment. We can infer high numbers

from LA, Orange, and Ventura indicate this is a positive trend.  41

2013 Industry Panel: Job Growth... fact or fiction?

Thanks to sponsor Alex Hayden ’95CEO, Cushman and Wakefield and

Chair of Career and Industry Partnerships, Chapman50