Upload
pearl-sparks
View
212
Download
0
Embed Size (px)
Citation preview
Meeting your business information needs.
Friday at the Beach
Economic Update
Rick Harper, Director
UWF Haas Center
January 11th, 2008
Meeting your business information needs.
The National Picture: Economic Drivers
•Slower GDP growth (1% going forward)
•Housing market correction (consumer spending)
•Subprime debacle spreads (whose bonds?)
•Recession risk up (>50% chance)
•Energy prices / inflation (oil, food up, $ down)
•Monetary policy (Fed hemmed in, but lowers)
•Growth abroad (makes up for lower US growth)
•Trade deficit shrinks (US as bargain basement)
Meeting your business information needs.
Panama City Outlook 2008/2009:
•Insurance crisis
•Housing affordability
•Growth somewhat faster than national average, fail to close the gap with pre-hurricanes growth rate
•Real estate market returns to pre-boom quantities, prices still need to fall
•Unemployment rises
•Availability of skilled labor
Meeting your business information needs.
The Housing Market
•Subprime excesses continue to haunt the housing market – and the broader economy.•Pool of potential buyers has contracted sharply.•Flow of mortgage credit has slowed to a trickle.•Low interest rates won’t cure what ails housing market.•Inventory glut will worsen during 2008.•Current downturn a blessing and a curse for rental market.•It’s not all bad – long-term housing fundamentals remain positive.
Meeting your business information needs.
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
70 75 80 85 90 95 00 05
thousands of unitsSource: U.S. Census Bureau, Mission Residential
Residential Construction
Building permits
Housing starts
Meeting your business information needs.
Non-prime lending sustained the boom
Meeting your business information needs.
62
63
64
65
66
67
68
69
70
65 70 75 80 85 90 95 00 05
Homeownership rate, % of households,4-quarter moving averageSource: U.S. Census Bureau
Homeownership rates rose during the boom
Meeting your business information needs.
0
100
200
300
400
500
600
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
“Active” mortgage equity withdrawal, $ billion,SAAR, 4-qtr moving averageSource: Federal Reserve
There is still unspent housing equity, but the flow is slowing
Meeting your business information needs.
2.50
3.00
3.50
4.00
4.50
5.00
79 81 83 85 87 89 91 93 95 97 99 01 03 05 07
Ratio of median house priceto median household income, U.S.Source: Moody’s Economy.com, Mission Residential
Affordability took a hit during the housing boom
Meeting your business information needs.
95
100
105
110
115
120
125
130
12/03 12/04 12/05 12/06
Perc
ent of
12/
03 L
evel
CPI-U PPI for Finished Goods Inputs to Construction Industries
Source: Ken Simonson, AGCA
Meeting your business information needs.
90
100
110
120
130
140
150
160
170
12/03 12/04 12/05 12/06
Perc
ent of
12/
03 L
evel
CPI-U Plastic Construction Products
Gypsum Products Lumber & Plywood
Source: Ken Simonson, AGC
Meeting your business information needs.
Panama City MSA employment, 1/00 - 11/07, s.a.
60,000
65,000
70,000
75,000
80,000
85,000
90,000
Jan-
00
May
-00
Sep-0
0
Jan-
01
May
-01
Sep-0
1
Jan-
02
May
-02
Sep-0
2
Jan-
03
May
-03
Sep-0
3
Jan-
04
May
-04
Sep-0
4
Jan-
05
May
-05
Sep-0
5
Jan-
06
May
-06
Sep-0
6
Jan-
07
May
-07
Sep-0
7
emp
loym
ent
Meeting your business information needs.
Panama City MSA: Employment Change from 12 months prior, 1/01 - 11/07
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
Jan-
01
May
-01
Sep-0
1
Jan-
02
May
-02
Sep-0
2
Jan-
03
May
-03
Sep-0
3
Jan-
04
May
-04
Sep-0
4
Jan-
05
May
-05
Sep-0
5
Jan-
06
May
-06
Sep-0
6
Jan-
07
May
-07
Sep-0
7
Job creation slowed beginning
in early 2006
strong growth performance, Q2/02 - Q1/06
National economic weakness, 01 - 02
Meeting your business information needs.
Panama City MSA unemployment rate: 1/01 - 10/07
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Jan-
00
May
-00
Sep-0
0
Jan-
01
May
-01
Sep-0
1
Jan-
02
May
-02
Sep-0
2
Jan-
03
May
-03
Sep-0
3
Jan-
04
May
-04
Sep-0
4
Jan-
05
May
-05
Sep-0
5
Jan-
06
May
-06
Sep-0
6
Jan-
07
May
-07
Sep-0
7
November 2006
Area hit hard by September 11th slowdown
Meeting your business information needs.
Panama City MSA: employment seasonality factors change over time
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1990 - 19992000 - 2007
Meeting your business information needs.
Panama City MSA: Change in seasonality of retail sales
-30%
-20%
-10%
0%
10%
20%
30%
40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
perc
ent d
iffer
ence
from
ave
rage
1990 - 1999
2000 - 2007
Meeting your business information needs.
Panama City MSA: Total taxable retail sales, 1/00 - 10/07, s.a.
150,000,000
170,000,000
190,000,000
210,000,000
230,000,000
250,000,000
270,000,000
290,000,000
200
0:01
200
0:06
200
0:11
200
1:04
200
1:09
200
2:02
200
2:07
200
2:12
200
3:05
200
3:10
200
4:03
200
4:08
200
5:01
200
5:06
200
5:11
200
6:04
200
6:09
200
7:02
200
7:07
dolla
rs p
er m
onth
Sept 05
Meeting your business information needs.
Panama City MSA: Employment by sector, 1980 and 2005
0
5
10
15
20
25
30
35
Ag,Mining
Constr Mfg TCPU Whlsl Retail FIRE Svc Fed St/Loc
thou
sand
s of
jobs 1980 2005
Meeting your business information needs.
Panama City MSA: Employment share by sector, 1980 and 2005
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Ag,Mining
Constr Mfg TCPU Whlsl Retail FIRE Svc Fed St/Loc
shar
e of
tota
l em
ploy
men
t
1980 2005
Meeting your business information needs.
Median Age of Population
20
25
30
35
40
45
Bay US SE FL
med
ian
ag
e o
f p
op
ula
tio
n in
yea
rs
1980 2005 2030
Meeting your business information needs.
Panama City MSA: Projected change in full-time residents by 5 yr period
-3
-2
-1
0
1
2
3
4
5
6
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
chan
ge in
num
ber
of p
eopl
e in
coh
ort,
in th
ousa
nds
Age 55 - 64 Age 65 - 74
Meeting your business information needs.
•Real GDP growth of 2.0% in 2007, 2.1% in 2008.•Plenty of downside risks:
•U.S. consumers fall into full retreat;•Credit squeeze evolves into full-blown credit crunch;•Energy shocks push prices higher/limit supplies; •Congress acts on growing protectionist sentiment, rides to the rescue of the housing market, heals health care;
•Limited scope for any additional Fed funds rate cuts.•Long-term housing fundamentals are positive, but the near-term road will be rocky.•Global growth will survive U.S. slowdown, but U.S. recession would be a different matter.
Forecast Summary
Meeting your business information needs.
Questions?
Rick Harper, Ph.D.
Director