Professor & Chair of Economics Economics Student Cal State Long - - PowerPoint PPT Presentation

Seiji Steimetz, Ph.D. Professor & Chair of Economics Cal State Long Beach Megan Anaya Economics Student Cal State Long Beach

Presented at the 2019 Long Beach Regional Economic Forum

2019

#LBREF

2019 Long Beach Regional Economic Forum #LBREF

National Economic Update

2019 Long Beach Regional Economic Forum #LBREF

Gross Domestic Product

$20.5 trillion

$14 $15 $16 $17 $18 $19 $20 $21 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Real GDP ($ trillions)

GDP Component % of 2018 GDP Consumption 68.1% Investment 17.8% Government 17.2% Net Exports

• 3.1%

Source: St. Louis Federal Reserve (FRED); Bureau of Economic Analysis

Growth Rates 2016 2017 2018 GDP 1.6% 2.2% 2.9% Personal Income 1.7% 2.6% 2.9%

2019 Long Beach Regional Economic Forum #LBREF

Unemployment

3.9%

2% 4% 6% 8% 10% 12% 14% 16% 18% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Unemployment Rate

U3 Rate U6 Rate 2018 Net Job Gains by Sector (1,000s) Professional and Business Services 537 Education & Health Services 499 Leisure & Hospitality 410 Manufacturing 242 Construction 223 Transportation & Warehousing 194.5 Financial Activities 102 Wholesale Trade 94.9 Other Services 78 Transportation Equipment 58.6 Information 3 Utilities

• 0.6

Retail Trade

• 4.5

Net Total Job Gain 2.43 million

Source: Federal Reserve Bank of St. Louis (FRED); Bureau of Labor Statistics

2019 Long Beach Regional Economic Forum #LBREF

Inflation & Federal Funds Rate

• 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Inflation Rate FED Funds Rate

• Current Inflation Rate:

2.14%

• Target Inflation Rate:

2.00%

• Target Unemployment:

4.00% to 4.60%

• Relaxation of

“Quantitative Easing"

Source: Federal Reserve Bank of St. Louis (FRED); www.federalreserve.gov

2019 Long Beach Regional Economic Forum #LBREF

Consumer Confidence & Debt

$1 tril. $3 tril.

$0.5 $1.5 $2.5 $3.5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Consumer Debt ($ trillions)

Revolving Nonrevolving

Source: Conference Board/OECD; Federal Reserve Bank of St. Louis (FRED) 96 97 98 99 100 101 102 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Consumer Confidence Index

2018: 5% Debt Increase

2019 Long Beach Regional Economic Forum #LBREF

Housing Starts & Durable Goods

1.10 1.15 1.20 1.25 1.30 1.35 1.40

Housing Starts (millions)

Source: Census Economic Indicators – Seasonally Adjusted $190 $200 $210 $220 $230 $240 $250 $260 $270 $280

Durable Goods Orders ($ bil.)

2019 Long Beach Regional Economic Forum #LBREF

Financial Markets

2200 2400 2600 2800 3000

S&P 500 Index

Source: Federal Reserve Bank of St. Louis (FRED)

• 0.04%
• 1%

0% 1% 2%

10yr – 3mo Treasury Rate Spread

“Yield Curve Inversion”

2019 Long Beach Regional Economic Forum #LBREF

Long Beach Regional Economic Update

2019 Long Beach Regional Economic Forum #LBREF

Population, Household Income, Unemployment, and Education

2019 Long Beach Regional Economic Forum #LBREF

Population

12.3% 13.2% 43.2% 28.1% 3.2%

0% 10% 20% 30% 40% 50%

Racial/Ethnic Composition

2016 2017

469,459

10.2 mil. 39.5 mil.

98 100 102 104 106 108 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Population Index

Long Beach LA County CA

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Household and Per-Capita Income

$60,557

$50,000 $55,000 $60,000 $65,000 $70,000 $75,000 2013 2014 2015 2016 2017

Median Household Income

Long Beach LA County CA

$32,006

$25,000 $27,000 $29,000 $31,000 $33,000 $35,000 2013 2014 2015 2016 2017

Median Per-Capita Income

Long Beach LA County CA

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Unemployment

4.7%

4% 6% 8% 10% 12% 14% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Unemployment Rate

Long Beach LA County CA

Source: Bureau of Labor Statistics

Long Beach

• Feb. 2019

4.2%

2019 Long Beach Regional Economic Forum #LBREF

Education

79.0% 79.8%

75% 80% 85% 2016 2017

Percentage Age 25+ with at least a High School Diploma

Long Beach LA County CA

30.1% 31.1%

28% 29% 30% 31% 32% 33% 34% 2016 2017

Percentage Age 25+ with at least a Bachelor’s Degree

Long Beach LA County CA

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Jobs

2019 Long Beach Regional Economic Forum #LBREF

Job Sectors

Major Occupation Sector Long Beach Employees Long Beach % LA County % California % Management, Business, Science, & Arts 86,720 37.5% 37.0% 38.7% Service 47,049 20.3% 19.1% 18.6% Sales & Office 52,155 22.6% 23.5% 22.5% Natural Resources, Construction, & Maintenance 15,613 6.8% 7.7% 9.1% Production, Transportation, & Material Moving 29,688 12.8% 12.7% 11.0% Total Civilian Employed Population 231,225

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Job Sector Patterns

Source: Census American Community Survey

4.1%

• 3.3%

1.7%

• 10.4%
• 4.6%
• 12%
• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% Management, Business, Science, & Arts Service Sales & Office Natural Resources, Construction, & Maintenance Production, Transportation, & Material Moving

2016-2017 Changes in Employment of Long Beach Residents

Long Beach LA County CA

2019 Long Beach Regional Economic Forum #LBREF

Wages

Median Annual Wages Long Beach LA County California Management, Business, Science, & Arts $62,061 $61,645 $67,561 Service $21,542 $20,804 $21,330 Sales & Office $31,713 $31,046 $31,938 Natural Resources, Construction, & Maintenance $36,945 $32,016 $35,038 Production, Transportation, & Material Moving $29,458 $26,789 $30,207 Overall Median Wage $36,438 $35,110 $38,170

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Wage Growth by Job Sector

Source: Census American Community Survey

0.8% 6.3% 14.7% 10.7% 2.2%

0% 2% 4% 6% 8% 10% 12% 14% Management, Business, Science, & Arts Service Sales & Office Natural Resources, Construction, & Maintenance Production, Transportation, & Material Moving

2016-2017 Changes in Median Wages of Long Beach Residents

Long Beach LA County CA

2019 Long Beach Regional Economic Forum #LBREF

Employment Growth by Industry (2015-2017)

• 24.2%

22.9% 6.0% 50.7% 0.4% 4.8%

• 8.5%
• 11.2%

32.6%

• 2.2%

8.4%

• 5.3%

Wholesale trade Transportation, warehousing, utilities Retail trade Public administration Professional, scientific, management Other services Manufacturing Leisure , accommodation, food services Information Finance, insurance, real estate Education, health, social assistance Construction

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Wage Growth by Industry (2015-2017)

6.6%

• 9.3%
• 5.3%
• 9.4%

14.0% 27.3% 21.2%

• 3.8%

1.2% 13.7% 1.3% 1.3%

Wholesale trade Transportation, warehousing, utilities Retail trade Public administration Professional, scientific, management Other services Manufacturing Leisure, accommodation, food services Information Finance, insurance, real estate Education, health, social assistance Construction

Source: Census American Community Survey

2019 Long Beach Regional Economic Forum #LBREF

Real Estate

2019 Long Beach Regional Economic Forum #LBREF

Home Prices

$628,900

$200,000 $300,000 $400,000 $500,000 $600,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Median Single Family Home Value

Long Beach LA County CA

Source: Zillow Research/ZTRAX

Current Median Values All Home Types $ 1yr % change 5yr % change Seal Beach $997,100 6.4% 4.4% Huntington Beach $833,400 2.7% 3.9% Cypress $680,500 1.3% 5.0% Long Beach $597,400 3.3% 5.9% Lakewood $589,600 2.5% 5.7% Carson $548,600 5.2% 7.5% Bellflower $527,600 3.3% 7.1% LA-Long Beach-Anaheim Metropolitan Area $652,200 2.5% 6.2%

2019 Long Beach Regional Economic Forum #LBREF

Apartment Rents

$1,800 $2,360

$1,500 $1,700 $1,900 $2,100 $2,300 2017 2018 2019

Median Rent (Multi-Unit Buildings)

Long Beach LA-LB-Anaheim

Source: Zillow Research/ZTRAX; PolicyMap

Current Median Rents Multi-Unit Buildings $ 2yr % change Huntington Beach $2,235

• 22.8%

Carson $2,150 14.7% Lakewood $2,030 17.2% Whittier $1,830 3.2% Long Beach $1,800 10.8% Paramount $1,635 6.3% Bellflower $1,600 10.3% LA-Long Beach-Anaheim Metropolitan Area $2,360 6.2%

2019 Long Beach Regional Economic Forum #LBREF

Residential Construction & Vacancy

128 73

200 400 600 800 1,000 1,200

Residential Construction Permits

Single Unit Multi Unit

Source: Census Building Permits Survey; Valassis Lists

0.75%

0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1

Residential Vacancy Rates

Long Beach LA County CA

2019 Long Beach Regional Economic Forum #LBREF

Office Market

2018 4th Quarter Office Market Total Square Feet % Leased Available Square Feet Rent per square foot Downtown – Class A 1,436,314 84.6% 221,280 $3.03 Downtown – Class B 2,441,612 79.5% 501,519 $2.35 Downtown – Class C 223,2948 94.2% 12,930 $1.65 Downtown LB Totals 4,101,220 82.1% 735,729 $2.35 405/710 Corridor 984,438 95.0% 49,394 $2.20 Bixby Knolls/Signal Hill 742,617 86.4% 101,182 $1.94 East Long Beach/Seal Beach 912,824 89.3% 97,410 $2.35 Long Beach Airport Area 2,383,659 94.0% 143,311 $2.58 Suburban LB Totals 5,023,538 92.2% 391,297 $2.27

Source: Cushman & Wakefield Office Market Survey Q4 18 Snapshot

2019 Long Beach Regional Economic Forum #LBREF

Non-Residential Construction & Vacancy

$0 $100 $200 $300 $400 $500 $600 $700

Non-Residential Permit Values ($ millions)

Commercial Industrial Retail Office Hotel Alterations

$650m

Source: Construction Industry Research Board; Valassis Lists

5.60%

5.00% 6.00% 7.00% 8.00% 9.00% 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1

Business Vacancy Rates

Long Beach LA County CA

2019 Long Beach Regional Economic Forum #LBREF

Business Climate

2019 Long Beach Regional Economic Forum #LBREF

Taxable Sales

$1.19b $1.36b

$1.1 $1.2 $1.3 $1.4 $1.5 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1

Long Beach Taxable Sales ($ bil.)

Source: California Department of Tax and Fee Administration

$37.4b $38.5b

$37 $38 $39 $40 $41 $42 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1

LA County Taxable Sales ($ bil.)

2.7% Increase 14.3% Increase

2019 Long Beach Regional Economic Forum #LBREF

Downtown Retail Sales

Source: Downtown Long Beach Economic Profile

$590m

100 200 300 400 500 600 700 2012 2013 2014 2015 2016 2017 2018

Downtown LB Retail Sales ($mil.)

11.8% 16.6% 15.5% 14.8% 18.9%

21.0%

0% 5% 10% 15% 20% 25% 2013 2014 2015 2016 2017 2018

Annual Growth Rates

2019 Long Beach Regional Economic Forum #LBREF

Long Beach Small Business Survey

Source: Long Beach Small Business Monitor 2019 55% 31% 14% 40% 37% 23% 55% 29% 16% 50% 33% 17%

43% 34% 24%

0% 20% 40% 60%

Get Better? Remain the Same? Get Worse? “Will the economy for small business in the Long Beach region…”

2015 2016 2017 2018 2019

2019 Long Beach Regional Economic Forum #LBREF

Long Beach Small Business Survey

21% 29% 31% 29% 27% 33% 30%

28%

6% 7% 7% 8% 13% 6% 7%

11%

0% 10% 20% 30% 40% 50% 2012 2013 2014 2015 2016 2017 2018 2019

Increase Decrease

“Do you expect your hiring of new employees to increase, decrease, or be unchanged?”

Source: Long Beach Small Business Monitor 2019

2019 Long Beach Regional Economic Forum #LBREF

Long Beach Small Business Survey

31% 28% 41% 35% 31% 35% 35%

39%

20% 14% 18% 17% 17% 13% 12%

12%

0% 10% 20% 30% 40% 50% 2012 2013 2014 2015 2016 2017 2018 2019

Increase Decrease

“Do you expect spending on equipment & supplies to increase, decrease or be unchanged?”

Source: Long Beach Small Business Monitor 2019

2019 Long Beach Regional Economic Forum #LBREF

Port of Long Beach

100,000 200,000 300,000 400,000 500,000 600,000

Loaded TEUs

Inbound Outbound Total

Source: Port of Long Beach

• 2018 Record Volume:

5.6 million loaded TEUs

2019 Long Beach Regional Economic Forum #LBREF

Economic Impact

2019 Long Beach Regional Economic Forum #LBREF

What is Economic Impact Analysis?

Direct Induced

2019 Long Beach Regional Economic Forum #LBREF

Analysis Region

Los Angeles County Orange County

• Los Angeles and Orange Counties
• Population:

13.35 million

• Employment:

8.69 million

• Gross Regional Product:

$1.01 trillion

Source: IMPLAN; American Community Survey Public Use Microdata

2019 Long Beach Regional Economic Forum #LBREF

Economic Impact

• f Long Beach & Signal Hill Residents
• Population:

484,061

• Employed Residents:

238,827

• Regional Economic Impact:

$92.7 billion

• Direct Impact (GRP):

$53.3 billion

• Indirect & Induced Impact:

$39.4 billion

• Additional Jobs Supported:

217,995

Source: 2017 IMPLAN Model Year

2019 Long Beach Regional Economic Forum #LBREF

Economic Impact

• f Long Beach & Signal Hill Residents

Five Most Impactful Sectors

Source: 2017 IMPLAN Model Year

Sector Employment Economic Impact % of Long Beach’s Economic Impact Petroleum Refineries 1,256 $8.16 billion 8.8% Real Estate 14,797 $4.53 billion 4.9% Wholesale Trade 16,685 $4.07 billion 4.4% Aircraft Manufacturing 4,640 $3.80 billion 4.1% Hospitals 15,828 $2.89 billion 3.1%

2019 Long Beach Regional Economic Forum #LBREF

Economic Impact of Self-Employed

Long Beach & Signal Hill Residents

• Self-Employed Residents:

25,238

• Regional Economic Impact:

$6.2 billion

• Direct Impact (GRP):

$3.4 billion

• Indirect & Induced Impact:

$2.8 billion

• Additional Jobs Supported:

16,342

Source: 2017 IMPLAN Model Year

2019 Long Beach Regional Economic Forum #LBREF

Economic Impact of Self-Employed

Long Beach & Signal Hill Residents

Five Most Impactful Sectors

Source: 2017 IMPLAN Model Year

Sector Employment Economic Impact % of Long Beach’s Economic Impact Real Estate 2,543 $793.2 million 0.86% Construction of New Commercial Structures 2,935 $445.0 million 0.48% Wholesale Trade 927 $228.1 million 0.25% Insurance Carriers 430 $189.3 million 0.22% Management Consulting 1,443 $181.4 million 0.20%

Seiji Steimetz, Ph.D. Professor & Chair of Economics Cal State Long Beach Megan Anaya Economics Student Cal State Long Beach

Presented at the 2019 Long Beach Regional Economic Forum