2014 economic forecast: leadership's role in a changing economy
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2014 Economic Forecast:Leadership’s Role in a Changing Economy
Technology Alliance Group for Northwest WashingtonJanuary 29, 2014
Hart HodgesWestern Washington University
Sources: • Washington Dept. of Employment Security (for state and
local employment and wage data) • US Bureau of Economic Analysis (GDP data) • Washington Office of Financial Mngt (population figures) • JP Morgan and Washington Office of Forecast Council
(forecast estimates) • The Economist magazine (graphics related to 3-D printers) • Other slides show authors and publication dates – citations
available upon request.
Economics
Technology
Demographics Institutions/Leadership
What to Do ?
Autor and Dorn, 2008
Employment Change 97 - 06
Employment Category (white collar jobs)
% Change
High skilled 24.6
lawyers, engineers, etc.
Medium skilled -30.1
computer support
Low skilled 1.5
sales rep, drafter, exec. asst.
Crino, Review of Economic Studies, 2010
Percentage Change in Employment, 1980 - 2010
0
20
40
60
80
100
120
High skill Upper middle Lower middle Low Skill
Pe
rce
nt
Percentage Change in Real Wages, 1980 - 2010
0
5
10
15
20
25
30
35
40
High skill Upper middle Lower middle Low Skill
Pe
rce
nt
Structural vs. Cyclical ? (Inflation ?)
4,000
6,000
8,000
10,000
12,000
14,000
16,000
66,000
76,000
86,000
96,000
106,000
116,000
126,000
136,000
146,000
156,0001
97
5q
1
19
76
q3
19
78
q1
19
79
q3
19
81
q1
19
82
q3
19
84
q1
19
85
q3
19
87
q1
19
88
q3
19
90
q1
19
91
q3
19
93
q1
19
94
q3
19
96
q1
19
97
q3
19
99
q1
20
00
q3
20
02
q1
20
03
q3
20
05
q1
20
06
q3
20
08
q1
20
09
q3
20
11
q1
20
12
q3
$ (
bill
ion
s)
No
nfa
rm J
ob
s (1
,00
0s)
Bio-chemistry and Health Care Education?
Retail? Transportation (especially with energy boom)
What do these changes mean for the local economy? What disruptions can we anticipate… and when? Note: the changes described so far do not explain the sort of inequality in wealth we are seeing today… What is driving the inequality?
Global Forecast – Modest Growth
Global Forecast – Modest Growth
2012 Actual 2013 Expected 2014 Forecast
Annual Percent Change
Real GDP 2.4 2.0 2.2
Non Farm Jobs 1.6 1.6 1.6
Housing Starts 20.5 27.6 12.0
CPI 2.9 1.7 1.3
Rate (%)
Unemployment Rate
8.5 7.8 7.1
10 Yr Treas. Yield 1.8 3.0 3.5+
30 Yr Fixed Mort. 4.0 3.5 4.4
Metrics for U.S.
2014 Forecast (US) 2014 Forecast (US)
Annual Percent Change
Real Per Capita Income 1.8 1.7
Non Farm Jobs 1.8 1.6
Manufacturing 0.7 0.8
Service Providing 1.8 1.6
Housing Units Authorized - 0.7
CPI 1.2 (Seattle)
1.3 (U.S.)
Rate (%)
Unemployment Rate 6.85 7.14
Washington Outlook
General Trends:
Recent population growth Whatcom County: roughly 1% Washington State: roughly 1% Annual job growth since Aug ‘09 Whatcom County: roughly 1.8% Washington State: roughly 1.7% Retail Sales Whatcom County: slightly higher growth
Looking past the aggregate trends:
Population growth Growth differs by age cohort by county
Job growth Very different job mix in major metro areas versus more rural areas Resulting in wage growth disparity
Retail Sales Distribution of activity within the county invites important questions
Local Employment Growth
• Roughly the same as the state…
70,000
72,000
74,000
76,000
78,000
80,000
82,000
84,000
86,000
88,000
2,500,000
2,550,000
2,600,000
2,650,000
2,700,000
2,750,000
2,800,000
2,850,000
2,900,000
2,950,000
3,000,000
3,050,000
Jan
-04
Jun
-04
No
v-0
4
Ap
r-0
5
Sep
-05
Feb
-06
Jul-
06
De
c-0
6
May
-07
Oct
-07
Mar
-08
Au
g-0
8
Jan
-09
Jun
-09
No
v-0
9
Ap
r-1
0
Sep
-10
Feb
-11
Jul-
11
De
c-1
1
May
-12
Oct
-12
Mar
-13
Au
g-1
3
Job
s -
Wh
atco
m
Job
s -
Was
hin
gto
n
Jobs in Retail Trade
9,000
9,500
10,000
10,500
11,000
11,500
130,000
135,000
140,000
145,000
150,000
155,000
160,000Ja
n-0
4
Jun
-04
No
v-0
4
Ap
r-0
5
Sep
-05
Feb
-06
Jul-
06
Dec
-06
May
-07
Oct
-07
Mar
-08
Au
g-0
8
Jan
-09
Jun
-09
No
v-0
9
Ap
r-1
0
Sep
-10
Feb
-11
Jul-
11
Dec
-11
May
-12
Oct
-12
Mar
-13
Au
g-1
3
Seattle
Whatcom
Jobs in Professional & Business Services
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
140,000
150,000
160,000
170,000
180,000
190,000
200,000
210,000
220,000
230,000Ja
n-0
4
May
-04
Sep
-04
Jan
-05
May
-05
Sep
-05
Jan
-06
May
-06
Sep
-06
Jan
-07
May
-07
Sep
-07
Jan
-08
May
-08
Sep
-08
Jan
-09
May
-09
Sep
-09
Jan
-10
May
-10
Sep
-10
Jan
-11
May
-11
Sep
-11
Jan
-12
May
-12
Sep
-12
Jan
-13
May
-13
Sep
-13
Seattle
Whatcom
Immigration and Emigration
Cohort 2002 2007 2012
25 - 29
30 - 34
35 - 39
Etc.
60 - 64
65 - 69
Change in Cohort Size: 2007 - 2012
Cohort WA State King Whatcom Jefferson
30 - 34 3 3 -3 15
35 - 39 3 2 2 5
40 - 44 0 0 3 6
45 - 49 -1 -4 1 2
50 - 54 -1 -4 -3 6
55 - 59 -1 -4 2 11
60 - 64 -2 -6 3 15
65 - 69 -4 -9 -2 12
70 - 74 -9 -11 -8 -7
Job Mix: Cause or Result?
0
1
2
3
4
5
6
7
8
9
10
2005-2012 2005-2012
Pe
rce
nta
ge o
f To
tal
Professional & Technical Service Jobs
King County
Whatcom
0
2
4
6
8
10
12
14
16
18
20
Const Mfg Retail Info Prof & Tech Accom Health Govt
Pe
rce
nt
of
all J
ob
s
King Whatcom
Job Mix – Major Metro vs. Small Metro
0
5
10
15
20
25
Const Mfg Retail Info Prof & Tech Accom Health Govt
Pe
rce
nt
of
all W
age
s
King Whatcom
Wage Mix – Major Metro vs. Small Metro
Are the trends in this recovery robust – or temporary?
Economics
Technology
Demographics Institutions/Leadership
Leadership in business: • What has changed? • Is the landscape more competitive;
does it require a different approach? Leadership in the community: • What is needed for leadership given
the technical, demographic and economic changes
Thank you ! Hart.Hodges@wwu.edu Center for Economic and Business Research Western Washington University
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