Economic Trends Chip Filer, Ph.D. Associat e Professor Old - - PowerPoint PPT Presentation

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Apr 02, 2023 444 likes •602 views

Economic Trends Chip Filer, Ph.D. Associat e Professor Old Dominion Universit y, Depart ment of Economics Rate of Growth: GDP (U.S.) and GRP (Hampton Roads) 2001-2015 5 4 2.38 3 Growth Rate 2 1 1.14 0 -1 -2 -3 -4 2001 2002 2003

SLIDE 1

Chip Filer, Ph.D. Associat e Professor Old Dominion Universit y, Depart ment of Economics

Economic Trends

SLIDE 2

Rate of Growth: GDP (U.S.) and GRP (Hampton Roads) 2001-2015 2.38 1.14

1 2 3 4 5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

Growth Rate

Percent change real GDP

Source: Bureau of Economic Analysis and the Old Dominion University Economic Forecasting Proj ect. Data

n GDP incorporates latest BEA revisions in September 2015. Real GRP for Hampton Roads is calculated by

using the GDP price deflator. e represents estimated value

SLIDE 3

Oil Spot Prices

Excess Supply Weak Demand?

Source: United States Energy Information Administration.

SLIDE 4

The Fed Funds Futures Market is “Bearish”

0.385 0.435 0.460 0.500

0.00 0.10 0.20 0.30 0.40 0.50 0.60 March 2016 June 2016 September 2016 December 2016

Source: CME Group, February 23, 2016

SLIDE 5

The National Economy in 2016

 Expect a bumpy 2016  We are forecasting growth for

the year, but some quarters during the year could be weak.

 In spite of the slower growth,

we anticipate the FED will increase the target fed funds rate during 2016 (perhaps 3 times)

 This will likely flatten the yield

curve rather than put tremendous pressure on long- term yields.

SLIDE 6

Hampton Roads’ Gross Regional Product Attributable to DOD Spending (1984-2016)

49.5% 48.8% 33.5% 44.4% 39.2% 0% 10% 20% 30% 40% 50%

1984 49.5% 1991 48.8% 2000 33.5% 2011 44.4% 2015(e) 39.2% 2016(f) 37.6% Source: U.S. Department of Defense , U.S. Department of Commerce, and the Old Dominion University Economic Forecasting Project. e represents estimated value; f represents forecasted value

SLIDE 7

Caps on Department of Defense Discretionary Spending, FY 2012 to FY 2021

450 500 550 600 650 700 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Billions of dollars BCA 2011 Sequestration

Sequestration

The legislated cap on spending increased by only $0.8B (0.15%) for FY 2015 and is now expected to increase by $26.8B (5.14%) during FY 2016 and by only $3.0 B (0.55%) during FY 2017

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The 2007-2009 Recession Including Virginia and Hampton Roads (% Decline in Total US Non-farm Payroll Employment from Pre-Recession Peak)

3.40% 1.80%

2.32%
8%
6%
4%
2%

0% 2% 4% 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Decline from Pre-Recession Peak

Month After Pre-Recession Peak

USA VA HR Pre-Recession Peak Dates: U.S.: January, 2008 Virginia: April, 2008 Hampton Roads: July, 2007

SLIDE 9

Change in Employment by Sector’s (Private Ownership) in Hampton Roads

25,819
13,124

15,863

28,000
18,000
8,000

2,000 12,000 All Industries Construction Retail Trade Information Manufacturing Wholesale Trade Real Estate, Rental, Leasing Administrative, Waste Mgmt. Finance and Insurance Educational Services Accommodation and Food Services Management of Companies and… Professional, Scientific, and Technical… Health Care and Social Assistance

From 1st Quarter 2007 to 1st Quarter 2015 (Virginia Portion of Hampton Roads)

Source: Virginia Employment Commission: Covered Employment and Wages by Private Ownership and the Old Dominion University Economic Forecasting Project.

SLIDE 10

Unemployment Rate in U.S., Virginia and Hampton Roads

2 4 6 8 10 12

1/1/2000 9/1/2000 5/1/2001 1/1/2002 9/1/2002 5/1/2003 1/1/2004 9/1/2004 5/1/2005 1/1/2006 9/1/2006 5/1/2007 1/1/2008 9/1/2008 5/1/2009 1/1/2010 9/1/2010 5/1/2011 1/1/2012 9/1/2012 5/1/2013 1/1/2014 9/1/2014 5/1/2015

Recession US Virginia Hampton Roads

Source: Bureau of Labor Statistics

SLIDE 11

The Regional Economy in 2016

 We are forecasting better

growth in 2016 than in 2013 and 2014.

 The region will continue to

grow at a slower pace than the nation as we transition away from a DoD reliant economy.

 JOBS, JOBS, JOBS!

SLIDE 12

National Economic Outlook for 2016

Historical Forecast 2013 2014 2015 2016 Real Gross Domestic Product 1.49% 2.42% 2.38% est. 2.03% Employment Growth 1.70% 1.90% 2.11% 1.50% Unemployment Rate 7.4% 5.6% 5.3% 5.1% Consumer Price Index 1.22% 0.70% 0.13% 1.34% CPI - Core 1.71% 1.60% 1.83% 2.03% 3-Month Treasury Bill (end of year) 0.06% 0.03% 0.05% 1.25% 10-Year Treasury Bond 2.35% 2.55% 2.14% 3.15% 30-Year Conventional Mortgage Rate 3.98% 4.17% 3.85% 4.25%

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Regional Economic Outlook for 2016

2015 2016 Forecast Growth Forecasts Nominal Gross Regional Product $93.07B (e) $97.63B Real Gross Regional Product $84.38B (e) $85.72B 1.59% Civilian Employment 759,758 766,900 0.94% Unemployment Rate 5.06% 4.30% Taxable Sales $21.78B $22.56B 3.60% Hotel Revenue $746.22M $777.56M 4.20% General Cargo Tonnage 19.98M 20.52M 2.70% Housing Permit Value $819.15M $847.00M 3.40%

SLIDE 14

E.V. Williams Center for Real Estate

2088 Constant Hall Norfolk, VA 23529 www.odu.edu/business/center/creed