Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San...
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Transcript of Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San...
Lynn Reaser, Ph.D.Chief Economist, Point Loma Nazarene University
A Look at the Economy in San Diego
IFMA San DiegoJanuary 13, 2010
U.S Outlook
2
Real GDP Growth Forecast in 2010
Percent change, Q4/Q4
“V”-shaped Recovery GDP, billions of chained 2005
dollars
Weaker-than-normal ReboundReal GDP, % change
Trough to 6 qtrs later
6
Job Growth to Slowly ResumeChange in nonfarm employment, in
thousands
Jobless Rate to Edge Lower by Year-end 2010
Percent
Actual
Profits to ReboundAfter-tax profits, percent annual changes
Inflation SubduedConsumer prices, percent change,
Q4/Q4
Interest Rates to Slowly RiseQuarter-end, percent
10-year Treasury note
U.S. Forecast Summary
• Recession over• Financial markets settle• “V” shaped recovery, but less
robust than normal• Moderate inflation• Gradual rise in interest rates
ME WORRY?
Debt Shifts to the Public Sector Q3 2009, % change from prior quarter,
annualized
13
California’s Prospects
14
15
California Bottoming Out with Nation
Nonfarm employment, percent change over prior years
US
16
California Outperforms in Goods, Underperforms in Services and
Government JobsPercent change, Nov 2009 over prior year
U.S.
Goods Private Services
Gov’t
California’s Problems
• Dysfunctional government
• Fiscal pressures
• Infrastructure and schools
• Regulatory burden
• Expensive housing
• Water usage
18
California’s Strengths
• Entrepreneurial talent
• Technology frontrunner
• Environmental leader
• International edge
• Draw of our climate
19
20
San Diego
21
San Diego’s Jobs Decline Widespread
Percent change December 2009 over prior year Total
22
San Diego’s Jobless Rate RisesMonthly, percent
23
Home Sales and Prices Recover
Percent change, November 2009 over prior year
Prices
Sales
24
San Diego Home Price Trend Converges to the Nation’s
S&P/Case Shiller Home Price Index, Jan. 2000=100
San Diego
U. S.
San Diego Housing Permits to Rise
25
Thousands of units
Commercial Real Estate
• Distress across the board
• Gap closing between lease and
sublease rents
• Market trough end of 2010
• Owners better capitalized than in early
1990s26
27
Positive Forces
• Housing market improves• International trade• Technology• Alternative energy• Naval construction• Tourism• Health care and biotech
Risks/Constraints
• Rising commercial real estate vacancies
• Credit still tight• Fiscal problems for
state and local governments
Outlook for San Diego
San Diego Jobs to Return
28
Implications for Facilities Managers
29
30
Fastest Salary Growth Expected in 2010
Takeaways for Property Managers
• Keep your tenants happy• Earn a raise in 2010• Take care of your employees• Re-examine your personal
finances• Character counts