Transcript Slide 1

Economic Conditions in the
Sacramento Region
ULI Real Estate Outlook 2013
December 6, 2012
Ryan Sharp, CEcD
CSER Director
CSER Publications
Presented By
SITE
SELECTION
RESEARCH &
INFORMATION
RESEARCH
VALIDATION &
PEER REVIEW
INDUSTRY
STUDIES
WORKFORCE
STUDIES
CONSULTATION
EVALUATION
INFORMATION
ECONOMIC &
DEMOGRAPHIC
PROFILES
ECONOMIC &
TAX IMPACT
STUDIES
ECONOMIC
DEVELOPMENT
STRATEGIES
MARKET &
FEASIBILITY
ANALYSES
POLICY
ANALYSIS &
PROGRAM
EVALUATION
SUPPORT
CORE SKILLS:
•Economic & demographic analysis & forecasting
•Regional economics & economic development practices
•Market & feasibility analysis
•Econometric & input-output modeling
•Social science research & survey design
•Strategic planning & collaborative processes
•Performance measurement
•Geographic Information Systems
Current Conditions
Positive job growth for six months
Annual Job Growth
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
3.5%
3.4%
3.0%
2.5%
2.5%
2.0%
1.5%
1.0%
0.5%
2.6%
1.9%
1.9%
1.4%
2.0%
1.9%
1.4%
1.0%
0.3%
0.7%
0.0%
-0.5%
-0.3%
-1.0%
-0.8%
-1.2%
-0.4%
-0.7%
-1.5%
-2.0%
Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Sacramento Region
California
United States
SF Bay Area
Data Sources: CA Employment Development Department and U.S. Bureau of Labor Statistics
Jul-12
Stockton
Aug-12 Sep-12
Solano
Most large sectors added jobs in past year
Sacramento Region Largest Sector Annual Job Growth
6.0%
5.0%
4.0%
3.9%
3.0%
3.1%
3.0%
3.3%
2.0%
1.0%
0.8%
0.0%
-0.7%
-1.0%
-0.8%
-1.5%
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
Sep-11
Government
Oct-11
Nov-11 Dec-11
Prof. & Business Svcs.
Jan-12
Feb-12 Mar-12
Trade, Trans., & Util.
Data Source: CA Employment Development Department
Apr-12 May-12 Jun-12
Leisure & Hospitality
Jul-12
Aug-12 Sep-12
Edu. & Health Svcs.
Substantial gains in four major sectors
Major Sector Annual Job Gains and Losses
Sector
Total Nonfarm
Private Sector
Public Sector
Trade, Trans., & Util.
Prof. & Business Svcs.
Construction
Edu. & Health Svcs.
Financial Activities
Manufacturing
Leisure & Hospitality
Mining & Logging
Information
Other Services
Government
Sacramento
Region
September 2011-2012
SF Bay
California
Area
Stockton
15,700
17,500
-1,800
4,300
4,100
3,488
3,200
1,600
700
700
12
-200
-400
-1,800
Data Source: CA Employment Development Department
276,100
318,300
-42,200
45,300
88,500
25,400
56,700
21,700
-9,000
67,500
-100
25,700
-3,400
-42,200
72,500
76,200
-3,700
10,900
20,900
7,200
16,100
-1,600
1,100
13,600
0
7,900
100
-3,700
6,400
6,900
-500
1,700
900
200
1,800
400
1,200
700
0
100
-100
-500
Solano
2,200
2,500
-300
700
400
300
500
200
-200
700
0
0
-100
-300
Total employment around year 2001 levels
Sacramento Region Total Nonfarm Employment
1,000,000
953,400
950,000
900,000
851,200
850,000
800,000
808,100
750,000
Data Source: CA Employment Development Department
Unemployment rate above statewide average
17.0%
19.0%
17.2%
Unemployment Rate (Seasonally Adjusted Annual Average)
15.4%
18.0%
17.0%
16.0%
9.0%
8.6%
8.3%
10.4%
10.8%
11.3%
11.8%
12.6%
11.9%
12.0%
9.9%
10.0%
9.2%
11.0%
9.7%
12.0%
10.6%
13.0%
12.3%
14.0%
12.8%
15.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Sep-10
Sacramento Region
Sep-11
California
United States
Sep-12
SF Bay Area
Data Sources: CA Employment Development Department and U.S. Bureau of Labor Statistics
Stockton
Solano
Job growth ranks in middle of state regions
Annual Job Growth and Unemployment Rate Change
Stockton
-1.8%
3.4%
-1.3%
SF Bay Area
2.6%
-1.2%
Fresno
-1.0%
San Diego
2.0%
-1.4%
Sacramento Region
1.9%
-1.4%
Solano
1.9%
-1.0%
Los Angeles
1.7%
-1.4%
1.5%
-0.9%
United States
-3.0%
2.3%
-1.2%
California
Inland Empire
2.3%
1.4%
-2.0%
-1.0%
0.0%
1.0%
Unemployment Rate Change Sep 11-12
2.0%
Job Growth Sep 11-12
Data Sources: CA Employment Development Department and U.S. Bureau of Labor Statistics
3.0%
4.0%
Sacramento among fastest-growing
large metro areas nationally
Moderate but declining competitive position
Economic Outlook
Leading indicators improving
for nation and state
Stable growth expected for state
Regional business sentiment tapering off
Sacramento Region Business Confidence Index—Third Quarter 2012
Sacramento Region Business Confidence Index
Index Score 0 to 100 (Over 50 = Positive Perceptions)
65
60
56
57
55
55
50
49
46
53
52
51
54
49
49
45
55
52
51
50
49
48
46
40
35
37
30
25
26
23
20
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
BCI
Industry conditions vs. 6 mo. ago
Industry conditions 6 mo. from now
Sac Region conditions vs. 6 mo. ago
Q2
2012
Q3
2012
Sac Region conditions 6 mo. from now
Data Source: Center for Strategic Economic Research-Sacramento Business Journal Business Confidence Survey conducted
between September 13, 2012 and October 3, 2012—participants were asked to provide their assessment of the
Sacramento Region’s business climate and their industry for the previous and upcoming six months
Note: Responses to the questions are scaled from 0 to 100 in the following manner: Substantially Better = 100;
Moderately Better = 75; Same = 50; Moderately Worse = 25; Substantially Worse = 0.
Job growth expected to improve
Sacramento Region Annual Job Growth Outlook
October 2012 to September 2013 Forecast
3.0%
2.8%
2.5%
2.0%
1.9%
1.5%
1.0%
0.5%
Past 12 Months
Average = 0.4%
Next 12 Months
Average = 2.2%
0.0%
-0.5%
-0.8%
-1.0%
-1.5%
Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model
Only four major sectors with negative job
growth forecast
Major Sector Annual Average Job Growth Outlook
Q4-12 to Q3-13 Forecast, Sorted by Sector Size
Sector
Total Nonfarm
Government
Trade, Trans., & Util.
Edu. & Health Svcs.
Prof. & Business Svcs.
Leisure & Hospitality
Financial Activities
Construction
Manufacturing
Other Services
Information
Mining & Logging
Past 12
Months
0.4%
-0.7%
1.3%
3.4%
0.9%
-2.2%
2.0%
-0.3%
-0.6%
-0.4%
-1.0%
0.5%
Next 12
Months
2.2%
-0.3%
2.5%
2.4%
2.9%
3.0%
5.2%
14.3%
1.1%
-0.5%
-1.1%
-7.0%
Q4-12
1.8%
-0.2%
1.9%
1.7%
3.8%
1.9%
3.3%
10.0%
0.9%
-0.1%
-2.1%
-3.5%
Q1-13
2.2%
-0.3%
1.7%
2.3%
3.3%
4.7%
5.1%
16.2%
-0.9%
-1.6%
-1.3%
-23.2%
Q2-13
2.4%
-0.6%
2.9%
2.0%
2.8%
2.5%
6.5%
18.9%
1.2%
0.2%
-0.3%
-4.4%
Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model
Q3-13
2.6%
-0.2%
3.5%
3.4%
1.8%
2.9%
6.1%
12.0%
3.4%
-0.4%
-0.5%
3.0%
Notable declines in unemployment anticipated
Sacramento Region Unemployment Rate Outlook (Seasonally Adjusted Annual Average)
October 2012 to September 2013 Forecast
14.0%
12.8%
12.6%
12.0%
11.3%
10.0%
9.4%
8.0%
6.0%
4.0%
2.0%
0.0%
Sep-10
Sep-11
Sep-12
Sep-13
Data Sources: Historical from CA Employment Development Department; Forecast from CSER Business Forecast model
Regional Strategic Planning
nexteconomycapitalregion.org
PROJECT BACKGROUND
• Leaders from Valley Vision, the Metro Chamber, SACTO,
and SARTA sparked Next Economy in response to the
severe regional recession
• Objective is to identify catalytic strategies along with
specific actions and champions to accelerate new job
creation, investment, and innovation
• The core research agenda and related findings drove the
collaborative planning process
• Collaborative structure includes a leadership group, a
steering committee, various work groups, three regional
forums, and targeted outreach
• Tied into California Economic Summit to leverage regions
in reigniting the state’s economy (caeconomy.org)
PROSPERITY PLAN STRUCTURE
Call to Action
Unified Vision
Goals
SHIFTING TO
ACTION
Objectives
Strategies
Actions / Tactics
Champions
Performance Measures
UNIFIED VISION
Within five years the Capital Region
will be widely regarded as a:
Desirable place
Sought-after
for a quality
place for business workforce and
growth,
young
investment, and professionals to
entrepreneurship live, study, work,
and play
Diverse economy
renowned for its
core business
clusters and
driven in large
part by export
activity
GOALS
Foster a strong innovation environment
Amplify the Region’s global market transactions
Diversify the economy through growth and support of
core business clusters
Grow and maintain a world-class talent base
Improve the regional business climate for economic
growth
CORE BUSINESS CLUSTERS
Agriculture & Food
• 37,000 jobs
• $3.5 billion output
Advanced Manufacturing
• 11,000 jobs
• $1.7 billion output
Clean Energy Technology
• 3,000 jobs
• $850 million output
Education & Knowledge Creation
• 17,000 jobs
• $1.1 billion output
Information & Communications
Technology
• 31,000 jobs
• $9.7 billion output
Life Sciences & Health Services
• 99,000 jobs
• $8.6 billion output
Regional economic conditions have improved
Moderate competitive position
Forecast shows uptick in next 12 months
Next Economy aimed at accelerating job growth and investment
Thank You!