cardinal bank george mason university
TRANSCRIPT
Cardinal Bank
&
George Mason University
cra.gmu.edu
20th Annual Economic Conference
Friday, January 13, 2012
Cardinal Bank/George Mason University 20th Annual Economic Conference
Is This a Recovery or What?The Near-Term Outlook for the
Washington Area Economy
January 13, 2012
Washington Area Economy
Stephen S. Fuller, Ph.D.Dwight Schar Faculty Chair and University Professor
Director, Center for Regional AnalysisGeorge Mason University
10
12
14
16
1975-Q1
1982-Q3
% Change in GDP
Recession Recovery Patterns of GDP
Past Five Recessions
0
2
4
6
8
0 1 2 3 4 5 6 7 8 9 10
1982-Q3
1991-Q1
2001-Q4
2009-Q2
Quarters After Trough
% Change in GDP
Sources: BEA, GMU Center for Regional Analysis,
-2
0
2
4
6
U.S. Gross Domestic ProductQuarterly Change: 2007 – 2014
%Forecast > > > > > >
-10
-8
-6
-4
-2
2007-1 2 3 4
2008-1 2 3 4
2009-1 2 3 4
2010-1 2 3 4
2011-1 2 3 4
2012-1 2 3 4
2013-1 2 3 4
2014-1 2
Source: BEA, Global Insight
0
2000
4000
Annual Change in Payroll Jobs – USMonth over the Year, Not Seasonally Adjusted
(1000s)
Dec =+ 1.7 M
-8000
-6000
-4000
-2000
Source: BLS, GMU Center for Regional Analysis
U.S. Job Change by SectorDecember 2007 – December 2009
-544
-1,206
-1,563
791
35
Leisure & Hosp.
Retail Trade
Prof. & Bus. Svcs
Educ & Health Svcs
State & Local Govt
(000s) Total - 8,363,000Ranked by Size in 2010
-375
69
-377
-200
-474
-1,795
-570
-2,192
-544
-2500 -2000 -1500 -1000 -500 0 500 1000
Information
Federal Govt.
Transp. & Util.
Other Services
Wlse Trade
Construction
Financial
Manufacturing
Leisure & Hosp.
Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis
U.S. Job Change by SectorDec 2010 – Dec 2011
253
226
521
420
-251
Leisure & Hosp.
Retail Trade
Prof. & Bus. Svcs
Educ & Health Svcs
State & Local Govt
(000s) Total = 1,640Ranked by Size in 2010
-36
-36
72
44
84
46
7
225
253
-600 -400 -200 0 200 400 600
Information
Federal Govt.
Transp. & Util.
Other Services
Wlse Trade
Construction
Financial
Manufacturing
Leisure & Hosp.
Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis
400
450
500
550
600
650
700
Initial Claims for Unemployment4-Week Moving Average
382
200
250
300
350
400382
Source: Bureau of Labor Statistics
7
8
9
10
11
U.S. Unemployment Rate
Dec
= 8.5
%
GI FCST
4
5
6
7
Source: BLS, Seasonally Adjusted
GI FCST11 – 9.012 – 8.813 – 8.614 – 7.915 – 7.116 – 6.6
Growth in Total
Consumption Outlays
4.7
2.5 2.72.8
3.3 3.42.9
2.32.0 2.2 2.2 2.0 2.1
2.4
1
2
3
4
5
6%
Forecast > > > > >
-0.6
-1.9-3
-2
-1
0
1
Source: Global Insight, GMU Center for Regional Analysis
0
10
20
30
GDP
Residential Fixed
%
U.S. Economic Performance
-30
-20
-10
0Residential Fixed
Non-Res: Structures
State & Local
Federal
Bus. Inv.
Source: Global Insight
The Washington Metropolitan
Area EconomyArea Economy
40
80
120
160
Annual Change in JobsWashington Metro Area1,000s
-80
-40
0
Source: BLS, GMU Center for Regional Analysis
15 Largest Job MarketsJob Change Nov 09 – Nov 10
0
20
40
60
80
100(000s)
Washington + 49,200
-100
-80
-60
-40
-20
0
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis
15 Largest Job MarketsJob Change Nov 2010 – Nov 2011
0
20
40
60
80
100(000s)
Washington + 8,800
-100
-80
-60
-40
-20
0
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeWashington MSA
20
40
60
80
000s Annual Data Annual Month over Year
2009 2010 2011
-80
-60
-40
-20
0
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Sector 2008 – 2010 2010 - 2011
TOTAL -9.2 +8.8
Manufacturing -7.4 -3.0
Information Svcs -10.3 -1.9
Construction -27.5 +0.5
Other Services -5.0 -2.1
Washington MSA, Job Change by Sector(000s)
Other Services -5.0 -2.1
Financial Svcs -6.1 +5.8
State & Local Gov -1.3 +3.5
Retail -1.3 -5.6
Leisure & Hosp. +1.7 +3.5
Prof. & Bus. Svcs. +7.7 +7.4
Federal Gov +27.1 -2.0
Health & Educ +20.0 +3.0Source: BLS, GMU Center for Regional Analysis (November Data)
Annual Job ChangeDistrict of Columbia
20
30
40
50
60
000s Annual Data Annual Month over Year
2009 2010 2011
-40
-30
-20
-10
0
10
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeSuburban Maryland
20
30
40
50
60
000s Annual Data Annual Month over Year
2009 2010 2011
-40
-30
-20
-10
0
10
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Annual Job ChangeNorthern Virginia
20
30
40
50
60
000s Annual Data Annual Month over Year
2009 2010 2011
-40
-30
-20
-10
0
10
20
2002
2004
2006
2008
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Dec
Feb
Apr
Jun
Aug
Oct
Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis
Job Change by SectorNov 2010 – Nov 2011Northern Virginia
1
4
1
-2
4
Retail Trade
State & Local Govt
Educ & Health Svcs
Federal Govt.
Prof. & Bus. Svcs
(000s) Total + 12,700
0
0
0
-3
2
-1
2
4
1
-20 -10 0 10 20 30
Transp. & Util.
Wlse Trade
Manufacturing
Information
Financial
Other Services
Construction
Leisure & Hosp.
Retail Trade
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis
6
8
10
12
14
10.2 – DC
8.2 – U.S.
5.5 – SMD
Unemployment Rate
0
2
4
65.5 – SMD5.4 – MSA4.2 - NVA
Source: BLS, Not Seasonally Adjusted
The Economic Impact of
Federal Spending on the
Maryland-DC-Virginia RegionMaryland-DC-Virginia Region
Area 2000 2010 %Change % Total **
United States $1,637.2 $3,276.4 100.1 100.0
District of Columbia 28.2 61.9 119.2 1.9 0.2
Federal Spending Trends in DC, Maryland and Virginia,2000- 2010
(in billions of dollars)
District of Columbia 28.2 61.9 119.2 1.9 0.2
Maryland 45.1 96.3 113.5 2.9 1.9
Virginia 62.7 136.1 117.0 4.2 2.6
Total Area $136.0 $294.3 116.4 9.0 4.7
Source: Consolidated Federal Funds Report, 2010
** state population as a percent of US
Area Total $s DOD $s % Total % DOD
United States $3,276.4 $557.0 17.0 100.0
District of Columbia 61.9 8.7 14.0 1.6
Total Federal and DOD Spending in DC, Maryland and Virginia, 2010
(in billions of dollars)
District of Columbia 61.9 8.7 14.0 1.6
Maryland 96.3 18.7 19.4 3.4
Virginia 136.1 58.1 42.7 10.4
Total Area $294.3 $85.5 29.0 15.4
Source: Consolidated Federal Funds Report, 2010
Characteristics 2000 2010 % Change
Gross State Product $265.1 $423.5 59.8
Total Federal Spending $62.7 $136.1 117.0
The Commonwealth of Virginia Economy and Federal Spending
(in billions of current year dollars)
Total Federal Spending $62.7 $136.1 117.0
Salaries and Wages $12.5 $21.1 69.2
Procurement $21.3 $58.3 173.6
Total DOD Outlays $24.5 $58.1 136.9
Salaries and Wages $8.3 $13.6 65.0
Procurement $13.5 $40.4 198.3
Sources: Consolidated Federal Funds Reports, 2000 and 2010
40
50
60
70
Federal ProcurementVirginia, 2000-2010
$ Billions
10-yr Rate of Growth = 10.7%/yr
0
10
20
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
40
50
60
70
2010 Federal ProcurementTop 10 States
$ Billions
0
10
20
30
40
VA CA TX MD DC PA FL MA NY GA
Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
15
20
25
Federal Wages & SalariesVirginia, 2000-2010
$ Billions
10-yr Rate of Growth = 5.4%/yr
0
5
10
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
20
25
30
35
2010 Federal Wages & SalariesTop 10 States
$ Billions
0
5
10
15
20
TX CA DC VA GA NC MD NY FL WA
Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
Comparative Metrics 2000 2010
% of US population 2.5 2.6
% of total federal spending 3.8 4.2
The Commonwealth of Virginia Federal Spending
state ranking, total $s 2 2
per capita federal spending $8,859 $17,008
per capita DOD spending $3,476 $7,263
% of total DOD spending 10.3 10.4
state ranking, DOD $s 2 1
Sources: Consolidated Federal Funds Reports, 2000 and 2010
Source GSP* Personal Earnings Jobs
Direct Payroll $22.4 $19.3 339,941
Contracting $33.6 $23.9 537,258
The Importance of DOD Spending in the Commonwealth of Virginia, 2008
(in billions of 2008 $s)
Contracting $33.6 $23.9 537,258
Construction $1.4 $1.1 25,786
Totals $57.4 $44.4 902,985
% of State 15.6 17.4 18.9
Revenues Expenditures Net Benefit
Fiscal Impacts** $1,689.38 $593.34 $1,096.04
*gross state product
*in millions of dollars
The Changing Role of the
Federal Government
in the Washington Areain the Washington Area
2010 Structure of the
Greater Washington EconomyNon-LocalBusiness12.0 %
Total
Federal
Other Federal10.7 %
Fed Wages & Salaries 10.0%
Local ServingActivities34.8%
Federal
39.8%Procurement
19.1%
Source: GMU Center for Regional Analysis
100
120
140
160
180
FEDERAL SPENDING – WASHINGTON MSATOTAL & PROCUREMENT$ Billions
0
20
40
60
80
100
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
Source: Census Consolidated Federal Funds Report
50
60
70
80
90
Federal ProcurementWashington Metro Area
$ Billions
TOTAL = $862 Billion
0
10
20
30
40
50
Source: Census Consolidated Federal Funds Report
300
350
400
Federal EmploymentWashington Metro Area
000sEisenhower
Kennedy –Johnson
Nixon -Ford
Carter Reagan Bush 1 Clinton Bush 2
+ 80
+ 36+ 18 - 6 + 4
- 42 + 22
Obama
+30
150
200
250
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
- 22
Source: BLS, GMU Center for Regional Analysis
Federal GovernmentWashington MSA
10
15
20
25
30
000s Annual Data Annual Month over Year
2008 2009 2010 2011
-20
-15
-10
-5
0
5
10
2002
2004
2006
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis Tot Nov 2010 = 378,000
Growth Projections for Federal Spending and GRP: 2011- 2015
(in billions of 2010 dollars, annual % change)
Year Federal $s WMSA GRP
2010 $169.0 $425.02011 2.0% 2.6%2011 2.0% 2.6%2012 1.0% 2.7%2013 0.0% 2.9%2014 1.0% 3.3%2015 1.5% 3.2%2015 $178.5 $491.2Change 5.6% 15.6%
Source: GMU Center for Regional Analysis
2015 Structure of the
Greater Washington EconomyNon-LocalBusiness14.0 %
Total
Federal
Other Federal9.5 %
Fed Wages & Salaries 9.4 %
Local ServingActivities34.2%
Federal
36.3%Procurement
17.4%
Source: GMU Center for Regional Analysis
Near-Term Economic Outlook for the Washington Metropolitan Areathe Washington Metropolitan Area
Economic Outlook (GRP) – 2015Washington Area and Sub-state Portions
(Annual % Change)
3
4
5
6
7%
DC
SMMSANV
-2
-1
0
1
2 DC
Source: GMU Center for Regional Analysis
Employment Change by
Sub-state Region (000s)
2008 2009 2010 2011 2012 2013 2014 2015
D.C.D.C. 10.1 10.1 --2.22.2 9.59.5 3.63.6 4.74.7 5.85.8 7.97.9 7.97.9
Sub. MDSub. MD --3.33.3 --25.125.1 --5.95.9 2.42.4 5.35.3 9.99.9 11.811.8 13.213.2Sub. MDSub. MD --3.33.3 --25.125.1 --5.95.9 2.42.4 5.35.3 9.99.9 11.811.8 13.213.2
No. VANo. VA 6.1 -23.0 8.7 14.5 13.6 13.9 16.2 20.2
REGION 12.912.9 --50.350.3 11.311.3 20.520.5 23.623.6 29.629.6 35.935.9 41.341.3
Average Annual Change 1990-2010 = 36,000
Source: BLS, GMU Center for Regional Analysis, 2009-2015 based on 2010 Benchmark data from BLS, Revised 1/9/2012
2
4
6
8
%
GDP/GRP 2000 - 2015
Washington
-4
-2
0
2
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: Global Insight, GMU Center for Regional Analysis
U.S.
Cardinal Bank
&
George Mason University
cra.gmu.edu
20th Annual Economic Conference
Friday, January 13, 2012