The Current Performance and Outlook for the U.S. and ...cra.gmu.edu/pdfs/studies_reports_presentations/USAA Real...USAA Real Estate Company Co-Investment Partners The Current Performance

USAA Real Estate CompanyCo-Investment Partners

The Current Performance and Outlook

for the U.S. and Washington

Metropolitan Area Economies

September 21, 2011

Metropolitan Area EconomiesStephen S. Fuller, PhD

Director, Center for Regional AnalysisSchool of Public PolicyGeorge Mason University

8

10

12

14

1975-Q1

1982-Q3

% Change in GDP

Recession Recovery Patterns of GDPPast Five Recessions

0

2

4

6

8

0 1 2 3 4 5 6 7 8

1982-Q3

1991-Q1

2001-Q4

2009-Q2

Quarters After Trough

% Change in GDP

Sources: BEA, GMU Center for Regional Analysis,

Quarterly GDPJuly 2011 Series Revisions vs. Original

-2

0

2

4

6>> FORECAST > > >

-10

-8

-6

-4

-2

2007-1 2 3 4

2008-1 2 3 4

2009-1 2 3 4

2010-1 2 3 4

2011-1 2 3 4

2012-1 2 3 4

2013-1 2 3

ORIGINAL

REVISED

Data through to Q2 2011 are original and revised from BEA.Estimates for Q3 2011 and beyond are from Global Insight, pre-July and post July BEA revisions

-2

0

2

4

6

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2013

%Forecast > > > > > >

-10

-8

-6

-4

-2

2007-1 2 3 4

2008-1 2 3 4

2009-1 2 3 4

2010-1 2 3 4

2011-1 2 3 4

2012-1 2 3 4

2013-1 2 3

111.0

116.0

121.0

L.I.

U.S. Coincident and Leading IndicesNov 2006 – Jun 2011

RECESSION >

96.0

101.0

106.0

Nov-06

Feb-07

May-07

Aug-07

Nov-07

Feb-08

May-08

Aug-08

Nov-08

Feb-09

May-09

Aug-09

Nov-09

Feb-10

May-10

Aug-10

Nov-10

Feb-11

May-11

C.I.

U.S. Leading Index

468101214

2006 2007 2008 2009 2010 2011

-6-4-2024

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

45

50

55

60

65

ISM Manufacturing and Non-Manufacturing Indices

30

35

40

45 Mfg

N-Mfg

Annual Change in Payroll Jobs - US

-1000

1000

3000

THOUSANDS

Aug =+ 1.28 M

-7000

-5000

-3000

-1000

Source: BLS Establishment Survey, NSA

U.S. Job Change by SectorAug 2010 – Aug 2011

170

160

502

413

-352

Leisure & Hosp.

Retail Trade

Prof. & Bus. Svcs

Educ & Health Svcs

State & Local Govt

(000s) Total = 1,282Ranked by Size in 2010

-79

-110

82

94

93

17

-7

211

170

-600 -400 -200 0 200 400 600

Information

Federal Govt.

Transp. & Util.

Other Services

Wlse Trade

Construction

Financial

Manufacturing

Leisure & Hosp.

Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis

U.S. Job Change by SectorJuly 2011 – Aug 2011

2

-8

28

34

-15

Leisure & Hosp.

Retail Trade

Prof. & Bus. Svcs

Educ & Health Svcs

State & Local Govt

(000s) Total = 0Ranked by Size in 2010

-48

-2

-2

9

2

-5

3

-3

2

-100 -50 0 50 100

Information

Federal Govt.

Transp. & Util.

Other Services

Wlse Trade

Construction

Financial

Manufacturing

Leisure & Hosp.

Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis

400

450

500

550

600

650

700

Initial Claims for Unemployment4-Week Moving Average

414

200

250

300

350

400 414

Source: Bureau of Labor Statistics

7

8

9

10

11

U.S. Unemployment Rate

Aug = 9.1

%

GI FCST11 – 9.1

4

5

6

7

Source: BLS, Seasonally Adjusted

11 – 9.112 – 9.113 – 8.814 – 8.115 – 7.316 – 6.8

2

3

4

5

Consumer Prices2001 - 2015

Forecast > > > > > >

%

-1

0

1

2

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: BLS, Global Insight

4

5

6

7

8

Interest Rates2001 - 2015

Forecast > > > > > >

0

1

2

3

4Fed

30-Yr

Consumer Confidence

100

120

140

160

100

Expectations

20

40

60

80

Present Situation

Expectations

Source: Conference Board, GMU Center for Regional Analysis

Growth in Total Consumption Outlays

4.7

2.5 2.72.8

3.3 3.42.9

2.32.0 2.0 1.9 1.8 1.9

2.3

1

2

3

4

5

6%

Forecast > > > > >

-0.6

-1.9-3

-2

-1

0

1

Source: Global Insight, GMU Center for Regional Analysis

0

10

20

30

GDP

Residential Fixed

%

U.S. Economic Performance

-30

-20

-10

0Residential Fixed

Non-Res: Structures

State & Local

Federal

Bus. Inv.

Source: Global Insight

Economic Trends In The Washington Metropolitan AreaWashington Metropolitan Area

1500

2000

2500

3000

Population in the Washington MSABy Sub-State Area, 1900 - 2010

1000s

Northern VA

Suburban MD

0

500

1000

1500

D.C.

Source: US Census and GMU Center for Regional Analysis

35%

40%

45%

50%

Share of Washington Area Economy1970-2010

Northern Virginia

Suburban MD

10%

15%

20%

25%

30%

Suburban MD

D.C.

2.0%

4.0%

6.0%

Washington MSA Leading Economic IndexMonth-Over-Year Percent Change

-6.0%

-4.0%

-2.0%

0.0%

12-MonthMoving Average

0.0%

5.0%

10.0%

Washington MSA Coincident Economic IndexMonth-Over-Year Percent Change

-15.0%

-10.0%

-5.0%

0.0%

12-MonthMoving Average

36 3825

4461

7592

117

4156

71 6350

2340

80

120

160

Thousands

Annual Change in JobsWashington Metro Area

1991 - 2010

Avg. =

-53

-8

3625

1023

13

-50

11

-80

-40

0

40

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Avg. = 36,000

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

50

100

150

000s

Annual Job Change – MOTYCWashington MSA

-100

-50

0

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


20

40

60

80

000s

Annual Job Change – MOTYCDistrict of Columbia

-40

-20

0

20

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


20

40

60

80

000s

Annual Job Change – MOTYCSuburban Maryland

-40

-20

0

20

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


20

40

60

80

000s

Annual Job Change – MOTYCNorthern Virginia

-40

-20

0

20

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


Professional and Business ServicesWashington MSA

10

15

20

25

30

000s Annual Data Annual Month over Year

2008 2009 2010 2011

-20

-15

-10

-5

0

5

10

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Source: BLS March 2010 Benchmark, GMU Center for Regional AnalysisTot 2010 = 681,200

Federal GovernmentWashington MSA

10

15

20

25

30


2008 2009 2010 2011

-20

-15

-10

-5

0

5

10

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Education and Health ServicesWashington MSA

10

15

20

25

30


2008 2009 2010 2011

-20

-15

-10

-5

0

5

10

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


State & Local GovernmentWashington MSA

10

15

20

25

30


2008 2009 2010 2011

-20

-15

-10

-5

0

5

10

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Leisure & HospitalityWashington MSA

10

15

20

25

30


2008 2009 2010 2011

-20

-15

-10

-5

0

5

10

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Annual Job Change - RetailWashington MSA

10

15

20

25

30


2008 2009 2010 2011

-20

-15

-10

-5

0

5

10

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Other ServicesWashington MSA

5

10

15

20


2008 2009 2010 2011

-20

-15

-10

-5

0

5

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Annual Job Change - FinancialWashington MSA

5

10

15

20


2008 2009 2010 2011

-20

-15

-10

-5

0

5

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Annual Job Change - ConstructionWashington MSA

0

5

10

15


2008 2009 2010 2011

-30

-25

-20

-15

-10

-5

0

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Annual Job Change - InformationWashington MSA

5

10

15

20


2008 2009 2010 2011

-20

-15

-10

-5

0

5

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul


Annual Job Change - ManufacturingWashington MSA

5

10

15

20


2008 2009 2010 2011

-20

-15

-10

-5

0

5

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis Tot 2010 = 52,200

15 Largest Job MarketsJob Change July 2010 – July 2011

0

20

40

60

80

100(000s)

Washington – 7,900

-100

-80

-60

-40

-20

0


Annual Job ChangeWashington MSA

20

40

60

80


2009 2010 2011

-80

-60

-40

-20

0

20

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun


Annual Job ChangeDistrict of Columbia

20

30

40

50

60


2009 2010 2011

-40

-30

-20

-10

0

10

20

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun


Annual Job ChangeSuburban Maryland

20

30

40

50

60


2009 2010 2011

-40

-30

-20

-10

0

10

20

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun


Annual Job ChangeNorthern Virginia

20

30

40

50

60


2009 2010 2011

-40

-30

-20

-10

0

10

20

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun


Job Change by SectorJuly 2010 – July 2011Washington MSA

1

-8

5

-3

8

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(000s) Total -7,900

0

0

-3

-1

3

-5

-6

2

1

-20 -10 0 10 20 30

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade


Job Change by SectorJuly 2010 – July 2011District of Columbia

-1

-8

3

1

3

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(000s) Total - 5,000

0

0

0

0

1

-2

0

-1

-1

-20 -10 0 10 20 30

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade


Job Change by SectorJuly 2010 – July 2011Suburban Maryland

-3

3

2

0

-3

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(000s) Total - 4,800

0

0

-1

1

-1

0

-5

3

-3

-20 -10 0 10 20 30

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade


Job Change by SectorJuly 2010 – July 2011Northern Virginia

4

4

-1

-4

4

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

(000s) Total 700

-1

0

0

-2

0

-4

0

1

4

-20 -10 0 10 20 30

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade


6

8

10

12

14

11.3 – DC

9.3 – U.S.

6.4 – SMD

Unemployment Rate

0

2

4

66.4 – SMD6.0 – MSA4.6 - NVA

Source: BLS, Not Seasonally Adjusted

15 Largest Job MarketsRanked by Unemployment Rate

July 2011

8

10

12

14

16%

US9.3

6.0

0

2

4

6

Source: BLS, NOT Seasonally Adjusted

6.0

The Changing Role of the Federal Government

in the Washington Areain the Washington Area

2000 Structure of the Greater Washington Economy

Non-LocalBusiness14.4 %

Federal

Other Federal19.3%

LocalBusiness39.5%

Federal 31.3% Procurement

12.0%

Other 6.9%

Other: Health/Education,Media,Assns

2010 Structure of the Washington Area Economy

Non-LocalBusiness12.0 %

Federal

Other Federal15.7 %

Local ServingActivities36.6%

Federal 34.9% Procurement

19.2%

Other: Health/Education, Media

50

60

70

80

90

Federal Spending By Type1984 - 2009

$ Billions

0

10

20

30

40

Wages & Salaries

100

120

140

160

Total Federal SpendingWashington Metro Area, 1984-2009

Billions Current $

Total

0

20

40

60

80

Source: GMU Center for Regional Analysis

Procurement

50

60

70

80

90

Federal ProcurementWashington Metro Area, 1980 - 2009

$ Billions

|< 80-89 = $84 B > | < 90-99 = $191B > | < 00 – 09 = $519B > |

TOTAL = $794 B

0

10

20

30

40

50

Near-Term Economic Outlook for the Washington Metropolitan Areathe Washington Metropolitan Area

Economic Outlook (GRP) – 2015Washington Area and Sub-state Portions

(Annual % Change)

3

4

5

6

7%

DC

SMMSANV

-2

-1

0

1

2 DC

Source: GMU Center for Regional Analysis

Employment Change by

Sub-state Region (000s)

2008 2009 2010 2011 2012 2013 2014 2015

D.C.D.C. 10.1 10.1 --2.22.2 9.59.5 3.33.3 5.75.7 8.68.6 9.39.3 9.89.8

Sub. MDSub. MD --3.33.3 --25.125.1 --5.95.9 4.64.6 7.57.5 11.311.3 14.114.1 16.216.2Sub. MDSub. MD --3.33.3 --25.125.1 --5.95.9 4.64.6 7.57.5 11.311.3 14.114.1 16.216.2

No. VANo. VA 6.1 -23.0 8.7 15.7 17.1 19.6 21.5 22.1

REGION 12.912.9 --50.350.3 11.311.3 23.623.6 30.330.3 39.539.5 44.944.9 48.148.1

Average Annual Change 1990-2010 = 36,000

Source: BLS, GMU Center for Regional Analysis, 2009-2014 based on 2010 Benchmark data from BLS, Revised 8/26/11

2

4

6

8

%

GDP/GRP 2000 - 2015

Washington

-4

-2

0

2

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Global Insight, GMU Center for Regional Analysis

U.S.

cra.gmu.educra.gmu.edu

Documents

The Current Performance and Outlook for the U.S. and ...cra.gmu.edu/pdfs/studies_reports_presentations/USAA Real...USAA Real Estate Company Co-Investment Partners The Current Performance