the state of the san diego economyifmasandiego.org/.../2015/02/ifma-presentation_rev2.pdfthe...
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The State of the San Diego Economy
Randy M. Ataide, JDFermanian Business & Economic Institute
Point Loma Nazarene University
International Facilities Management AssociationSan Diego Marriott Mission Valley
January 12, 2011
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Key Topics
Overall Economic Backdrop
California’s Current Economic Status
2011 San Diego Regional Outlook
Questions
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Economic Backdrop
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-4.0
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2007 2008 2009 2010e 2011f
U.S. Real GDP Builds Momentum4th quarter, percent change over prior year
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2007 2008 2009 2010e 2011f
Consumer Prices Still Subdued4th quarter, percent change over prior year
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1.0
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2006 2007 2008 2009 2010 2011f
10-year Treasury Note
Fed Funds Target
Interest Rates to RiseQuarter-end, percent
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California’s Current Economic Status
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California Recovers with NationNonfarm employment, percent
change over prior year
-8
-6
-4
-2
0
2
4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
CA
US
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0
2
4
6
8
10
12
14
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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California Suffers High UnemploymentPercent of labor force, monthly
CA
US
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Job Performance across SectorsNovember 2010, percent change over prior year
-8 -6 -4 -2 0 2 4 6
Construction
Information
Trade, Trans, Utils
Government
Financial Services
Manufacturing
Leisure and Hospitality
Educ and Health Care
Prof. and Bus Serv.
Mining
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California Home Sales See Volatile RecoveryResales, thousands of single-family units
300
350
400
450
500
550
600
650
2003 2004 2005 2006 2007 2008 2009 2010e 2011f
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California Home Prices RecoverMedian price, percent change over prior year
-40
-30
-20
-10
0
10
20
2005 2006 2007 2008 2009 2010e 2011f
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California Manufacturing Industries Posting Gains
Employment, percent change over prior year (November 2010)
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Petroleum Products
Food
Metal Products
Machinery
Electronics
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California Projected Budget ShortfallsBillions of dollars, fiscal year
-6
-22.4 -21 -20 -19.4
-19
-30
-25
-20
-15
-10
-5
0
2011-12 2012-13 2013-14 2014-15 2015-16
Includes $6 billion carry over deficit from 2010-11
Source: Legislative Analyst
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California to Add More Jobs in 2011December average, change over prior year, thousands
63
-535
-836
82
200
-1000
-800
-600
-400
-200
0
200
400
2007 2008 2009 2010e 2011f
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PositivesConsumer ElectronicsExportsCleantechTourismTechnology Innovation, design
NegativesState and Local
GovernmentCommercial Real
EstateRegulationsWater
2011 California Outlook
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2011 San Diego Outlook
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-80
-60
-40
-20
0
20
2007 2008 2009 2010e 2011f
San Diego to See More Jobs in 2011December, change from previous year, thousands
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Energy Efficiency
Military Construction Sets the Standard
Natural Ventilation and Heating
New Lighting Systems
Silver Level or Higher of LEED
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0 5 10
Apartment
Industrial
Office
Retail
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Commercial Real Estate ProspectsSan Diego, Scale 0 to 10
Abysmal Fair Excellent
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StrengthsLittle New SupplyConsumer
Spending risesRetail Profits
ImproveLocation Matters
WeaknessesE-CommerceTenant “Poaching”Fringe Retail
Strips, Older Malls, Empty Box Power Centers
Retail
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StrengthsMinimal New
SpaceJob Gains in
Professional ServicesHealth Care
Expands
WeaknessesCompanies Cut
CostsOutsourcing JobsGovernment
Demand Drops
Office
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StrengthsInventory
RebuildingForeign TradeNo New SupplyTechnology Firms
WeaknessesMaturing 5-year
leasesE-Commerce and
Point-to-Point Shipping
Industrial
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StrengthsSharp Drop in
BuildingJob GrowthMilitary Demand“Uncoupling”
WeaknessesHome Ownership
More Attractive“Shadow” Housing
Inventory
Apartments
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Questions
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Recommendations to Firms
Do not Depend on Government Stimulus or Strong
U.S. Recovery
Renegotiation Opportunities
Use Social Media in Marketing
Lock in Long-term Interest Rates
Hedge Against Inflation, Exchange Rates, and Credit
Risks
Keep Tenants Happy
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The Fermanian Business & Economic Instituteat
Point Loma Nazarene University
Educational, Business & Economic Resourcesfor the San Diego Region
www.pointloma.edu/fbeiResearch & White PapersBusiness Plan WritingStrategic Retreats
Economic Consulting Public SpeakingInternships
MBA Program at Mission Valley Campus