Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San...

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Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010

Transcript of Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San...

Page 1: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Lynn Reaser, Ph.D.Chief Economist, Point Loma Nazarene University

A Look at the Economy in San Diego

IFMA San DiegoJanuary 13, 2010

Page 2: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

U.S Outlook

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Page 3: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Real GDP Growth Forecast in 2010

Percent change, Q4/Q4

Page 4: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

“V”-shaped Recovery GDP, billions of chained 2005

dollars

Page 5: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Weaker-than-normal ReboundReal GDP, % change

Trough to 6 qtrs later

Page 6: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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Job Growth to Slowly ResumeChange in nonfarm employment, in

thousands

Page 7: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Jobless Rate to Edge Lower by Year-end 2010

Percent

Actual

Page 8: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Profits to ReboundAfter-tax profits, percent annual changes

Page 9: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Inflation SubduedConsumer prices, percent change,

Q4/Q4

Page 10: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Interest Rates to Slowly RiseQuarter-end, percent

10-year Treasury note

Page 11: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

U.S. Forecast Summary

• Recession over• Financial markets settle• “V” shaped recovery, but less

robust than normal• Moderate inflation• Gradual rise in interest rates

Page 12: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

ME WORRY?

Page 13: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Debt Shifts to the Public Sector Q3 2009, % change from prior quarter,

annualized

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Page 14: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

California’s Prospects

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Page 15: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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California Bottoming Out with Nation

Nonfarm employment, percent change over prior years

US

Page 16: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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California Outperforms in Goods, Underperforms in Services and

Government JobsPercent change, Nov 2009 over prior year

U.S.

Goods Private Services

Gov’t

Page 18: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

California’s Problems

• Dysfunctional government

• Fiscal pressures

• Infrastructure and schools

• Regulatory burden

• Expensive housing

• Water usage

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Page 19: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

California’s Strengths

• Entrepreneurial talent

• Technology frontrunner

• Environmental leader

• International edge

• Draw of our climate

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Page 20: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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San Diego

Page 21: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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San Diego’s Jobs Decline Widespread

Percent change December 2009 over prior year Total

Page 22: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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San Diego’s Jobless Rate RisesMonthly, percent

Page 23: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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Home Sales and Prices Recover

Percent change, November 2009 over prior year

Prices

Sales

Page 24: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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San Diego Home Price Trend Converges to the Nation’s

S&P/Case Shiller Home Price Index, Jan. 2000=100

San Diego

U. S.

Page 25: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

San Diego Housing Permits to Rise

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Thousands of units

Page 26: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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

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Page 27: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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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

Page 28: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

San Diego Jobs to Return

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Page 29: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

Implications for Facilities Managers

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Page 30: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 2010.

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Fastest Salary Growth Expected in 2010

Page 31: Lynn Reaser, Ph.D. Chief Economist, Point Loma Nazarene University A Look at the Economy in San Diego IFMA San Diego January 13, 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