Virginia Government Finance Officers’ Associationvgfoa.asp.radford.edu/2006 Fall...
Transcript of Virginia Government Finance Officers’ Associationvgfoa.asp.radford.edu/2006 Fall...
1
Virginia Government Finance Officers’ Association
Economic Update With Application Toward Local
Revenues
The National and Regional Economies—
National growth has slowed but remains strongProductivity growth very important to long-term growthFed is at the end of the tightening cycleRisks: housing, oil prices, dollar
State growth has slowed but remains positiveVaries around the stateHousing activity is slowing
Slower price appreciation impacts revenues from assessmentsSlower housing sales impacts recordation taxes
Slower retail sales impacts growth of local 1%Counties and cities see revenue growth but not as much as last yearEducation is important for regional growth
2
Real GDP Slows in Second Quarter
Data through 2nd Quarter 2006.Recessions are shaded.
Quarterly Annualized Percent Change
-4
-2
0
2
4
6
8
10
1990 1992 1994 1996 1998 2000 2002 2004 2006
The Fed’s Goal: 3.0% - 3.5% Real GDP Growth?
Disinflation
Inflation Pressures
Unemployment FallsCapacity Utilization RisesSlower Deliveries
3.0% - 3.5%NoninflationaryEconomic Growth
3
How Fast Can the Economy Grow?
Source: CBO, January 2006.
1.7
2.51.6
1.2 1.20.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1951-1973 1974-1981 1982-1990 1991-1995 1995-2005 2006-2016
Labor Force
ForecastAnnual Growth Rate
How Fast Can the Economy Grow?
Source: CBO, January 2006.
1.7
2.1
2.5
0.8
1.6
1.4
1.2
1.5
1.2
2.1
0.7
2.1
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1951-1973 1974-1981 1982-1990 1991-1995 1996-2005 2006-2016
3.8
3.23.0
2.7
3.3
2.8
ForecastAnnual Growth RateProductivity +Labor Force =Potential GDP
4
Bernanke, April 27, 2006 Comments Joint Economic Committee, US Congress
• ``Even if in the committee's judgment the risks to its objectives are not entirely balanced, at some point in the future the committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook,''
• ``A decision to take no action at a particular meeting does not preclude actions at subsequent meetings. .”
• Future policy actions will be increasingly dependent on the evolution of the economic outlook, as reflected in the incoming data. Specifically, policy will respond to arriving information that affects the Committee's assessment of the medium-term risks to its objectives of price stability and maximum sustainable employment. Focusing on the medium-term forecast horizon is necessary because of the lags with which monetary policy affects the economy.
St. Louis Fed President William Poole, Week of September 25, 2006
• “If inflation pressures are easing, even if only gradually, and there is a genuine prospect that inflation will return to the comfort zone, then I see no reason to accelerate the decline in inflation by maintaining a restrictive policy in the face of declining employment,”
• “If it appears that the economy is falling below the baseline forecast path, then my bias will be in the direction of wanting to be sure that the data paint a consistent picture before I advocate a policy easing. But if the picture is consistent, and inflation risk is receding, then I will not hesitate to advocate policy easing.”
• Poole will become a voting member of the Federal Open Market Committee (FOMC) next year and could take a voting slot at the next meeting if the Atlanta Federal Reserve does not have a new president in place.
5
Pace of Consumer Spending is Still Strong
Retail data through August 2006.Recessions are shaded.
Retail Sales and Inventory Growth% Change From Year Ago
-4
-2
0
2
4
6
8
10
12
1997 1999 2001 2003 2005-4
-2
0
2
4
6
8
10
12
Inventories
Retail Sales
Businesses are Confident But Hiring is Off (Payroll Average Monthly Gain of 145,000 Over 12 Months)
Data through August 2006.Recessions are shaded.
Monthly Change in ThousandsEmployment Growth
-500
-300
-100
100
300
500
700
Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
6
Factory Usage is Rising
Data through August 2006.Recessions are shaded.
Capacity Utilization Rate
55
60
65
70
75
80
85
90
95
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
Computers, Communication Equipment, and Semiconductors
Total
Factory Usage is Rising
Data through August 2006.Recessions are shaded.
Capacity Utilization Rate
55
60
65
70
75
80
85
90
95
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
Total
7
Factory Usage is Rising
Data through August 2006.Recessions are shaded.
Capacity Utilization Rate
55
60
65
70
75
80
85
90
95
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
Computers, Communication Equipment, and Semiconductors
Total
Consumer Price Index (CPI)Consumer Price Index
% Change From Year Ago
Data through August 2006.Recessions are shaded.
0.0
1.0
2.0
3.0
4.0
5.0
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
Total
ExcludingFood & Energy
8
Looking Ahead:Real Gross Domestic Product
3.22.8
3.43.3
3.2
3.9
0.0 1.0 2.0 3.0 4.0 5.0
2007 mst.2007 alt.
2006 mst.2006 alt.
2005
2004
Real GDP Annual Percentage Growth Rate
U.S. Forecast
9
U.S. Forecast
What is the neutral fed funds rate?
Risk to the Forecast: Foreign Investment
Data through 4th Quarter 2005.
Net Foreign Flow of Dollars into US Treasuries and Agencies, Millions of Dollars
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004
Treasuries
Agencies
10
Risk to the Forecast: Foreign Investment
Data through 4th Quarter 2005.
Net Foreign Flow of Dollars into US Treasuries and Agencies, Millions of Dollars
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
1990 1992 1994 1996 1998 2000 2002 2004
Treasuries
Agencies
Risk to the Forecast: Foreign Investment
Data through 4th Quarter 2005.
Net Foreign Flow of Dollars into US Treasuries and Agencies, Millions of Dollars
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
1990 1992 1994 1996 1998 2000 2002 2004
Treasuries
Agencies
11
Summary: National Economy
• Housing will slow further (Risk—faster-than-expected)
• Consumer spending continues at a slower but moderate pace– Employment gains– Wage increases
• Businesses continue to invest• Short-term rate hikes end• Risk: Oil price rises again
Employment Growth By State, July 2006
Nevada 5.3%Utah 4.7%
Michigan -0.1%Louisiana -9.0%
Percentage Change From a Year Ago
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
#26 Virginia, 1.4%
#12 SC, 2.5% #16 NC, 2.1% #27 DE, 1.3%
#36 MD, 1.0%#30 TN, 1.2%
12
Virginia Continues to Grow Faster than the National Average
Employment GrowthPercentage Change From a Year Ago
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Apr-91 Apr-93 Apr-95 Apr-97 Apr-99 Apr-01 Apr-03 Apr-05
United States
Virginia
Benchmark
Data through August 2006.Source: Chmura Economics & Analytics and Virginia Employment Commission.
Employment Growth By Sector
Percentage Change From a Year Ago
0.9
-0.8-0.2
1.5 0.7
-3.2
2.91.41.1
-0.7
4.45.1
2.8
0.60.21.61.3
2.22.9 2.7
0.11.61.3
-0.2
2.2
-0.7
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Tota
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Con
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Mfg
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PBS
Educ
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VirginiaUS
Data through August 2006.Source: Chmura Economics & Analytics and Virginia Employment Commission.
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Employment Growth By Sector
Percentage Change From a Year Ago
0.9
-0.8-0.2
1.5 0.7
-3.2
2.91.41.1
-0.7
4.45.1
2.8
0.60.21.61.3
2.22.9 2.7
0.11.61.3
-0.2
2.2
-0.7
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0To
tal
Con
st
Mfg
TWU
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Ret
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FIR
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Educ
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Oth
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Gov
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VirginiaUS
Data through August 2006.Source: Chmura Economics & Analytics and Virginia Employment Commission.
Claims Rising Slightly Point Toward Slower Job Growth
Data through July 2006.Source: Chmura Economics & Analytics and Virginia Employment Commission.
Virginia: Initial Unemployment Claims6-Month Moving Average
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Jun-92 Jun-94 Jun-96 Jun-98 Jun-00 Jun-02 Jun-04 Jun-06
14
Slower Retail Sales Point to Slower Growth in Sales Tax Receipts
Data through July 2006.Source: Chmura Economics & Analytics and Virginia Department of Taxation.
Virginia: Retail SalesPercentage Change From a Year Ago, 6-Month Moving Average
-6
-4
-2
0
2
4
6
8
10
12
14
Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05
Auto Registrations Back Near Record Levels
Data through August 2006.Source: Chmura Economics & Analytics and Virginia Department of Taxation.
Virginia: Auto RegistrationsPercentage Change From a Year Ago, 6-Month Moving Average
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
15
The Housing Market is Slowing
Data through August 2006.Source: Chmura Economics & Analytics and U.S. Census.
Virginia: Single-Family Building Permits6-Month Moving Average
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
The Housing Market is Slowing
Data through August 2006.Source: Chmura Economics & Analytics and U.S. Census.
Virginia: Single-Family Building Permits6-Month Moving Average
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
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Housing Permit Drop Varies Greatly By Region
Data through August 2006.Source: Chmura Economics & Analytics and U.S. Census
Richmond: Single-Family Building Permits6-Month Moving Average
0
100
200
300
400
500
600
700
800
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
Housing Permits in NVA are Back to 1996 Levels
Data through August 2006.
Northern Virginia: Single-Family Permits6-Month Moving Average
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
17
A Sign that Investors are Pulling out of the Market in the Washington MSA
Washington Metro Area Home Sales vs. Inventory
0
10,000
20,000
30,000
40,000
50,000
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
Homes Sales
Active Inventory
Why? Home Price Appreciation
GWR Home Price Index and Affordability
0%
10%
20%
30%
40%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Recession
Appreciation
Appreciation
U.S.
GWR
18
…Impacts AffordabilityGWR Home Price Index and Affordability
0%
10%
20%
30%
40%
1998 1999 2000 2001 2002 2003 2004 2005 20060%
10%
20%
30%
40%
50%
Recession
U.S.
Affordability
Appreciation
AffordabilityAppreciation
GWR
U.S.
GWR
Affordability - % of households that can afford a median-priced home.
Home Price Appreciation Has Reached Double Digit Levels
Richmond Home Price Index
0%
10%
20%
30%
40%
1998 1999 2000 2001 2002 2003 2004 2005 20060%
10%
20%
30%
40%
50%
60%
Recession
Appreciation
Appreciation
U.S.
Richmond
19
Affordability is Still HighRichmond Home Price Index and Affordability
0%
10%
20%
30%
40%
1998 1999 2000 2001 2002 2003 2004 2005 20060%
10%
20%
30%
40%
50%
60%
Recession
U.S.
Affordability
Appreciation
AffordabilityAppreciation
Richmond
U.S.
Richmond
Home Affordability in Virginia’s Metropolitan Areas, 2006 Qtr 2
Source: Chmura Economics & Analytics
20
Housing BubblesHouse Price Appreciation
Percent Change From A Year Ago
-10
-5
0
5
10
15
20
25
30
35
40
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Source: Office of Federal Housing Enterprise Oversight (OFHEO) Home Price Index
Washington DC MSA
Los Angeles/Long Beach MSA
San Francisco/Oakland MSA
367-28.4-173437.2610.2New Orleans-Metairie-Kenner366-18.5-21.494115.4Gulfport-Biloxi365-2.9-1.239.941.1Danville363-2.5-1.559.360.8Jackson363-2.5-3.2127130.2Cedar Rapids2990059.759.7Harrisonburg1931.42.3161.7159.4Roanoke1841.59.2624.2615Richmond1651.713778.2765.2Hampton Roads1282.21.25755.8Winchester1022.573.43,007.12,933.7Washington-Arlington-Alexandria
732.93106.4103.4Lynchburg732.9271.769.7Blacksburg-Christiansburg-Radford593.12.996.393.4Charlottesville56.8463.259.2Prescott47.213.4200.8187.4McAllen-Edinburg-Mission37.44.261.156.9Morgantown27.73.751.948.2Yuma19.34.451.747.3St. George
Ranking Virginia’s Metropolitan Areas in the Nation, Employment Growth Rate
Number of Jobs in Thousands
RankPercentNumberJul-06Jul-05
21
Significant Variation in Employment By County/City
Data through 1st Quarter 2006.
Nonfarm Employment: Northern Virginia vs. the State
Change From a Year Ago, In Thousands
Since 1993848,400 Net Gain in VA451,300 Net Gain in NVA
Data through August 2006.
-100
-50
0
50
100
150
200
Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05
Northern Virginia
Rest of State
22
Nonfarm Employment: Nonmetropolitan Areas vs. the State
Since 1993848,400 Net Gain in Metro VA13,700 Net LOSS in Rural Areas
Data through August 2006.
-100
-50
0
50
100
150
Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05
Rural
Metropolitan Areas
Employment Growth in the Manufacturing Sector
Data through August 2006.
Employment Growth - Manufacturing SectorPercentage Change From a Year Ago
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
Apr-91 Apr-93 Apr-95 Apr-97 Apr-99 Apr-01 Apr-03 Apr-05
Virginia
United States
23
West Piedmont Workforce Area (Danville, Henry, Martinsville, Patrick, and Pittsylvania) Skewed
Toward Mfg
24
Reasons for Longer-Term Shifts in Growth
• Infrastructure– Highways– Internet– Quality of life
• Education
Overview: The Knowledge Economy
• Broad trends – muscles vs. knowledge• Individuals clearly benefit from more
education• Does a more educated population
contribute to faster economic growth with Virginia?
25
Cheap Labor in Foreign Countries Drove Trends
Source: Department of Labor.
Percentage of Employment in Goods vs. Service, United States
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002
Service Producing
Goods Producing
Cheap Labor in Foreign Countries is Driving Trends
21.33
18.83
9.167.27
5.83 5.41
2.57 2.38
0
5
10
15
20
25
UNITEDSTATES
JAPAN KOREA SINGAPORE HONGKONG
TAIWAN BRAZIL MEXICO
Source: U.S. Department of Labor.
Hourly Compensation for Production Workers in US Dollars, 2002
26
Cheap Labor in Foreign Countries and and Better Education inBetter Education in US Drove Trends
4.0 4.95.9 6.4
9.2 9.4
4.1 5.1
6.77.2
6.07.1
5.4 6.1
11.7 12.1
0
2
4
6
8
10
12
14
Brazil China Hong Kong,China
India Mexico Singapore South Africa
United States
Source: World Bank Database.
Average Years of Schooling of Adults, Selected Countries
19902000
27
Broad Relationships Between Education and Economic Well-Being Are Well Established
• More education is associated with higher wages
• More education is associated with a lower unemployment rate
396Some high-school, no
diploma8.8
554High-school graduate5.5
622Some college, no degree5.2
672Associate degree4
900Bachelor's degree3.3
1,064Master's degree2.9
1,307Professional degree1.7
$1,349 Doctoral degree2.1
(Dollars)(Percent)
Median weekly
earnings in 2003
Education attained
Unemploy-ment rate in
2003
28
Mean Real Earnings of Workers 18 Years and Over by Education Attainment
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
1975 1980 1985 1990 1995 2000
Less than High School
High School Graduate
Some College/Associate's Degree
Bachelor's Degree
Advanced Degree
Source: U.S. Census Bureau, Current Population SurveyRecessions are shaded.
Broad Relationships Between Education and Economic Well-Being Are Clear
Mean Real Earnings of Workers 18 Years and Over by Education Attainment
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
1975 1980 1985 1990 1995 2000
Less than High School
High School Graduate
Some College/Associate's Degree
Bachelor's Degree
Advanced Degree
Source: U.S. Census Bureau, Current Population SurveyRecessions are shaded.
Broad Relationships Between Education and Economic Well-Being Are Clear
29
Our International Competitive Advantage is Education
4.0 4.95.9 6.4
9.2 9.4
4.1 5.1
6.77.2
6.07.1
5.4 6.1
11.7 12.1
0
2
4
6
8
10
12
14
Brazil China Hong Kong,China
India Mexico Singapore South Africa
United States
Source: World Bank Database.
Average Years of Schooling of Adults, Selected Countries
19902000
U.S. 8th Grade Math Scores Falling Behind Some Less Developed Countries
604 585 582 579502 487 467
392
275
0
100
200
300
400
500
600
700
Singapore ChineseTaipei
HongKong
Japan UnitedStates
Intern’lAver. (38Countries)
Thailand Chile SouthAfrica
Source: International Association for the Evaluation of Education Attainment.
8th Grade Math Scores, 1999 Are We About to Lose the Are We About to Lose the Edge that UnderpinnedEdge that UnderpinnedOur Growth?Our Growth?
30
Distribution of Combined Mathematics Scores of 15-Year Old Students, by Country 2003
0 100 200 300 400 500 600 700
BrazilTunisiaIndonesia
ThailandUruguaySerbiaRussian Federation
LatviaMacao-China
LiechtensteinHong Kong-ChinaPartner Countries
MexicoTurkeyGreece
ItalyPortugal
United StatesSpain
HungaryPoland
LuxembourgNorway
Slovak RepublicIreland
GermanyAustriaSwedenFrance
DenmarkIceland
Czech RepublicNew ZealandAustralia
SwitzerlandBelgiumCanadaJapan
NetherlandsKoreaFinland
OECD CountriesOECD Average
10-25 25-Mean Mean +/- standard errorMean-75 75-90Percentiles of Performance
Distribution of Combined Mathematics Scores of 15-Year Old Students, by Country 2003
0 100 200 300 400 500 600 700
BrazilTunisiaIndonesia
ThailandUruguaySerbiaRussian Federation
LatviaMacao-China
LiechtensteinHong Kong-ChinaPartner Countries
MexicoTurkeyGreece
ItalyPortugal
United StatesSpain
HungaryPoland
LuxembourgNorway
Slovak RepublicIreland
GermanyAustriaSwedenFrance
DenmarkIceland
Czech RepublicNew ZealandAustralia
SwitzerlandBelgiumCanadaJapan
NetherlandsKoreaFinland
OECD CountriesOECD Average
10-25 25-Mean Mean +/- standard errorMean-75 75-90Percentiles of Performance
31
+92%9.44.9India
+258%13.63.8China
+15%15.713.7U.S.Change20001990
Students Enrolled in Postsecondary(in millions)
International Competition
UNESCO, 2003
New Participants in the World Economy (Supply Side)
• China, India and Russia = 3 billion people• 10% highly educated = 300 million people• USA = 300 million people• 25% highly educated = 75 million• Competition for jobs = 375 million people• USA students/adults will face greater
competition in the future than anytime in history
Craig Barrett, INTEL CEO 2004
32
Portion of Workforce Needing High-Skilled Jobs Has Increased
Unskilled
60%
Skilled
20%
Professional
20%
Skilled
65%
Unskilled
15%
Professional
20%
1950 1997National Summit on 21st Century Skills for 21st Century Jobs
At the Same Time, Educational Attainment in the U.S. is Rising
Source: Katharine Bradbury, “Education and Wages in the 1980s and 1990s: Are All the GroupsMoving Together?”Boston Fed.
30%20%
U.S. Full Time Workers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
79 82 85 88 91 94 97 00
Less Than High School 10%
High School or Some College
20% College Degree or More 30%
33
Importance of Education—Regions Grow Fasterand Income is Higher
Education Attainment and HH Income
Relationship Between Education Attainment and COLA Houshold Income(Correlation Coefficient 0.47)
0
10000
20000
30000
40000
50000
60000
0% 10% 20% 30% 40% 50% 60% 70%
% Adults With Bachelor Degree
Med
ian
Ho
use
ho
ld I
nco
me (
Co
st o
f Liv
ing
A
dju
sted
)
Source: 2000 Census and CEA
Falls Church
Arlington
Fairfax
AlexandraCovington
Dickenson
Trend Line
Loudon
Albemarle
34
These Students Will Be Underpinning Growth in 4 to 8 Years . . .
Source: Virginia Dept. of Education.
% of Students Passing 8th Grade Mathematics by School Division, 2004
0
20
40
60
80
100
HIGHLAND CHESTERFIELD ROCKINGHAM FAUQUIER POWHATAN SMYTH WISE KING GEORGE
CHARLES CITY
Top 10
These Students Will Be Underpinning Growth in 4 to 8 Years . . .
Source: Virginia Dept. of Education.
% of Students Passing 8th Grade Mathematics by School Division, 2004
0
20
40
60
80
100
HIGHLAND CHESTERFIELD ROCKINGHAM FAUQUIER POWHATAN SMYTH WISE KING GEORGE
CHARLES CITY
Bottom 10PORTSMOUTH CITYTAZEWELLSUSSEXLEEBUCKINGHAMSCOTTCHARLOTTESVILLE COVINGTON CITYBUCHANANPETERSBURG CITY
60.156.554.954.454.050.647.143.340.840.5
35
Higher Skills Needed for Fast Growing Services than Declining Mfg Industries
2.9
2.7
2.0 2.2 2.4 2.6 2.8 3.0 3.2Skill Measure of Occupations in Industries
Average Serv. Skill
Average Mfg Skill
Occupational Skill of Fastest Growing and Declining Industries, Virginia, 2002-2012
Source: JobsEQ™
2.62.7
2.62.6
2.52.3
2.72.6
2.82.9
2.7
2.0 2.2 2.4 2.6 2.8 3.0 3.2Skill Measure of Occupations in Industries
Mining Beverage/Tobacco Prod. Mfg.
Textile MillsTextile Prod. Mills
Apparel Mfg.Leather/Allied Prod. Mfg.
Paper Mfg.Petro./Coal Prod. Mfg.
Chemical Mfg.Computer/Electronic Prod. Mfg.
Average Mfg Skill
Occupational Skill of Fastest Growing and Declining Industries, Virginia, 2002-2012
Job Loss
Higher Skills Needed for Fast Growing Services than Declining Mfg Industries
Source: JobsEQ™
2.9Average Serv. Skill 2.9
BiggestJob Loss
36
3.13.0
2.93.1
3.03.1
2.92.9
2.72.6
2.9
2.62.7
2.62.6
2.52.3
2.72.6
2.82.9
2.7
2.0 2.2 2.4 2.6 2.8 3.0 3.2Skill Measure of Occupations in Industries
Internet Serv. /Data Process. Serv.Profess., Scientific, and Tech. Serv.
Admin./Support Serv.Ed. Serv.
Ambulatory Health Care Serv.Hospitals
Nursing/Res. Care FacilitiesSocial Assist.
Amusement, Gambling/Recreation Ind.Food Serv./Drinking Places
Average Serv. Skill
Mining Beverage/Tobacco Prod. Mfg.
Textile MillsTextile Prod. Mills
Apparel Mfg.Leather/Allied Prod. Mfg.
Paper Mfg.Petro./Coal Prod. Mfg.
Chemical Mfg.Computer/Electronic Prod. Mfg.
Average Mfg Skill
Occupational Skill of Fastest Growing and Declining Industries, Virginia, 2002-2012
Job Gain
Job Loss
Higher Skills Needed for Fast Growing Services than Declining Mfg Industries
Source: JobsEQ™
3.13.0
2.93.1
3.03.1
2.92.9
2.72.6
2.9
2.62.7
2.62.6
2.52.3
2.72.6
2.82.9
2.7
2.0 2.2 2.4 2.6 2.8 3.0 3.2Skill Measure of Occupations in Industries
Internet Serv. /Data Process. Serv.Profess., Scientific, and Tech. Serv.
Admin./Support Serv.Ed. Serv.
Ambulatory Health Care Serv.Hospitals
Nursing/Res. Care FacilitiesSocial Assist.
Amusement, Gambling/Recreation Ind.Food Serv./Drinking Places
Average Serv. Skill
Mining Beverage/Tobacco Prod. Mfg.
Textile MillsTextile Prod. Mills
Apparel Mfg.Leather/Allied Prod. Mfg.
Paper Mfg.Petro./Coal Prod. Mfg.
Chemical Mfg.Computer/Electronic Prod. Mfg.
Average Mfg Skill
Occupational Skill of Fastest Growing and Declining Industries, Virginia, 2002-2012
BiggestJob Gain
BiggestJob Loss
Higher Skills Needed for Fast Growing Services than Declining Mfg Industries
Source: JobsEQ™
37
Take Aways• National growth is shifting gears…Fed is at the
end of interest rate increases • The economy’s potential is about 3-3.5% real
GDP– Faster productivity growth leads to higher wages and
the potential for the economy to grow faster• Weaker dollar giving manufacturers some relief
from low foreign wages• Productivity and ingenuity need to offset low
labor costs abroad• People not industries are a region’s and firm’s
most valuable resource . . .education is important