alan clayton-matthews 2013 economic forecast presented to mass econ 1/18/13
DESCRIPTION
Alan Clayton-Matthews Economic presentation to MassEcon. January 18, 2013TRANSCRIPT
The Massachusetts Economy:Patiently Waiting for Worldwide
Growth to Return
Presented to MassEcon
Alan Clayton-MatthewsSchool of Public Policy and Urban Affairs
Northeastern UniversityNEEP, MassBenchmarks
January 18, 2013
A steady, slow to moderate national recovery, with workers bearing the burden.
4,000.0
4,500.0
5,000.0
5,500.0
6,000.0
6,500.0
7,000.0
7,500.0
7,000.0
8,000.0
9,000.0
10,000.0
11,000.0
12,000.0
13,000.0
14,000.0
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Consumption, Income, and Wages (Nominal)
Personal Consumption Expenditures Income Wages
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
The state and the nation are growing at about the same pace.
4.3
1.9
3.7 3.6
-0.8
2.7
2.0
5.4
1.9
2.6 2.72.8 2.7
2.3 2.2
2.62.4
0.1
2.5
1.3
4.1
2.0
1.3
3.1
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2010 2011 2012 2013
Qu
arte
rly
Gro
wth
at
An
nu
al R
ate
s (%
)Growth in Real Product, Massachusetts vs. U.S.
Massachusetts U.S.
Source: U.S., Bureau of Economic Analysis; Massachusetts: MassBenchmarks
Projected
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Massachusetts fared better this recession than the nation…
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Gro
wth
Fro
m S
am
e M
on
th P
rio
r Y
ear
(%)
Massachusetts and U.S. Payroll Employment Growth
MA US
Source: U.S. Bureau of Labor Statistics
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
…but it hasn’t always been that way.
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Jan-60 Jan-65 Jan-70 Jan-75 Jan-80 Jan-85 Jan-90 Jan-95 Jan-00 Jan-05 Jan-10
Gro
wth
Fro
m S
am
e M
on
th P
rio
r Y
ear
(%)
Massachusetts and U.S. Payroll Employment Growth
MA US
Source: U.S. Bureau of Labor Statistics
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
A preview of the coming payroll employment annual revisions.
3,140.0
3,160.0
3,180.0
3,200.0
3,220.0
3,240.0
3,260.0
3,280.0
3,300.0
Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
Tho
usa
nd
s o
f Jo
bs
Official and Re-Benchmarked CES-790 Payroll Employment
Unoffical Re-Benchmarked Official
26.5
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
How the pain of the recession has been shared as told by unemployment.
0
2
4
6
8
10
12
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Unemployment Rates by Sex, Massachusetts
All
Men
Women
12-Month Moving Average.Source: Current Population Survey
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
0
2
4
6
8
10
12
14
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Unemployment Rates by Minority Status, Massachusetts
White Non-Hispanic
Non-White or Hispanic
12-Month Moving Average.Source: Current Population Survey
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
0
2
4
6
8
10
12
14
16
18
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Unemployment Rates by Age, Massachusetts
Less than 25 Years Old
25-54 Years Old
55 or Older
12-Month Moving Average.Source: Current Population Survey
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
0
5
10
15
20
25
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Unemployment Rates by Educational Attainment, Massachusetts
Less Than High School
High School or GED
Some College, Less Than a Bachelor's Degree
Bachelor's Degree or Higher
12-Month Moving Average.Source: Current Population Survey
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Babyboomers are working more these days.
30%
40%
50%
60%
70%
80%
90%
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Employment Rates by Age, Massachusetts
Less than 25 Years Old
25-54 Years Old
55 or Older
12-Month Moving Average.Source: Current Population Survey
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
The European crisis has hurt Massachusetts.
80
100
120
140
160
180
200
220
240
Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Ind
ex
, 1
99
8=
10
0
Month
Massachusetts Merchandise Exports, Seasonally Adjusted 3-Month Moving Average
US
MA
Source: U.S. DOC, WISER, seasonally adjusted by author.
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Information technology markets have been weak.
60.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
140.0
150.0
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
2007=
100
Semiconductor Billings
World Europe Japan Americas Asia Pacific
Source: Semiconductor Industry Association, seasonally adjusted
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
$ M
illio
ns, 3
-mo
mo
v. A
vg
.
Worldwide Semiconductor Equipment Billings and Bookings
Billings Bookings
Source: Semiconductor Equipment and Materials International
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
5.3
2.5
18.1
12.0
-1.9
4.25.3
3.93.6
5.45.8
1.6
15.0
1.5
7.9
1.2
16.4
0.52.1
10.2
1.7
-0.1
-8.2
-21.9
-8.3
-1.1
9.5
6.6
-1.2-0.6
5.9
8.4
0.5
6.8
2.2
5.25.8
-3.1-3.8
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
No
min
al g
row
th f
rom
pri
or
qu
art
er
at
an
nu
al ra
te (
%)
U.S. Investment in Information and Processing Equipment and Software
Source: U.S. Bureau of Economic Analysis, NIPA Accounts
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Housing finally appears to be on the mend in Massachusetts.
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Single Family Home Sales
Source: Mass. Assoc. of Realtors, Seasonally Adjusted by NU
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
140.00
145.00
150.00
155.00
160.00
165.00
170.00
175.00
180.00
185.00
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Case Shiller Boston Home Price Index
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Construction will be the last housing indicator to improve.
0
200
400
600
800
1,000
1,200
1,400
1,600
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Massachusetts Single Family Housing Permits
Number per Month, Seasonally Adjusted
Source: Census Bureau, Seasonally Adjusted by Author
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Expect weak growth for the last quarter of this year and the first quarter of next, followed by moderate acceleration through 2015.
11 12 13 14 15-16
Forecast
Period
Payroll Employment 0.3 1.2 0.8 1.9 1.8 1.4
Wage and Salary Disbursements (WSD) 2.7 5.2 5.6 5.8 5.3 5.3
Personal Income 3.8 5.0 4.6 6.4 5.4 5.2
WSD per Payroll Worker 2.4 4.0 4.7 3.8 3.5 3.8
Population 0.5 0.5 0.5 0.5 0.4 0.5
Income Deflator (PCE U.S.) 2.5 1.9 2.1 2.0 1.6 1.9
Real
Gross State Product 1.8 2.4 2.9 4.0 3.5 3.3
Personal Income 1.2 3.0 2.4 4.3 3.7 3.2
Per Capita Personal Income 0.6 2.4 1.8 3.8 3.3 2.8
WSD per Payroll Worker -0.2 2.0 2.5 1.7 1.8 1.8
Growth in each period is the annualized growth rate over the following quarters:
11: 2010Q4 to 2011Q4
12: 2011Q4 to 2012Q4
13: 2012Q4 to 2013Q4
14: 2013Q4 to 2014Q4
15-16: 2014Q4 to 2016Q4
Forecast Period: 2012Q2 to 2016Q4
Average Annual Growth
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Employment growth will be slow until 2014. Growth in 2016 is restrained by demographics.
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
07 08 09 10 11 12 13 14 15 16
Qu
art
erl
y G
row
th a
t A
nn
ua
l R
ate
s
Employment Growth, Massachusetts
Source: NEEP, Moody's Analytics
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Housing is finally coming back.
260
280
300
320
340
360
-40
-30
-20
-10
0
10
20
03q1 04q1 05q1 06q1 07q1 08q1 09q1 10q1 11q1 12q1 13q1 14q1 15q1 16q1
Th
ou
sa
nd
s o
f d
olla
rs
Pe
rce
nt ch
an
ge
at a
nn
ua
l ra
tes
Massachusetts Median Existing House Price, Seasonally Adjusted
Appreciation Rate (L) Price (R)
Sources: National Association of Realtors, Moody's Analytics, NEEP
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
Employment loss impact of the fiscal cliff on Massachusetts (Current law, with no action by Congress).
•74,000. Moody’s Analytics. Reflects tax and spending impact of current law versus “middle ground” scenario of this forecast.
•60,497. Stephen Fuller, George Mason University. Spending cuts only.
•52,000. MassBenchmarks. Spending cuts only.
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
The Massachusetts economy has been characterized by periods of higher productivity growth. Will that continue?
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
55 60 65 70 75 80 85 90 95 00 05 10 15
Productivity Growth, Centered 5-Year Moving Average
MA US
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
A longer-term view of average productivity growth.
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
55 60 65 70 75 80 85 90 95 00 05 10 15
Productivity Growth, Centered 21-Year Moving Average
MA US
Alan Clayton-Matthews presentation to MassEcon on 1/18/2013