Download US - IFMA San Diego Chapter

A Look at the Economy in San Diego
IFMA San Diego
January 13, 2010
Lynn Reaser, Ph.D.
Chief Economist, Point Loma Nazarene University
U.S Outlook
2
Real GDP Growth Forecast in 2010
Percent change, Q4/Q4
5
3.8
4
3
2.4
2.5
2
1
0
-0.1
-1
-2
-1.9
-3
2006
2007
2008
2009e
2010f
“V”-shaped Recovery
GDP, billions of chained 2005 dollars
13800
Actual
Forecast
13600
13400
13200
13000
12800
12600
12400
Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10
Weaker-than-normal Rebound
Real GDP, % change
14
Trough to 6 qtrs later
12
10
8
6
4
2
0
-2
-4
Peak-to-trough
-6
57-58
73-75
81-82
07-10
Job Growth to Slowly Resume
Change in nonfarm employment, in thousands
6
Jobless Rate to Edge Lower by Year-end 2010
Percent
12.0
Actual
10.0
8.0
6.0
4.0
2.0
0.0
Forecast
Profits to Rebound
After-tax profits, percent annual changes
15
10
5
0
-5
-10
-15
2006
2007
2008
2009e
2010f
Inflation Subdued
Consumer prices, percent change, Q4/Q4
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2006
2007
2008
2009e
2010f
Interest Rates to Slowly Rise
Quarter-end, percent
6.0
5.0
4.0
10-year
Treasury note
3.0
2.0
1.0
0.0
Fed Funds Target
U.S. Forecast Summary
• Recession over
• Financial markets settle
• “V” shaped recovery, but less robust than
normal
• Moderate inflation
• Gradual rise in interest rates
ME WORRY?
Debt Shifts to the Public Sector
Q3 2009, % change from prior quarter, annualized
25
20
15
10
5
0
-5
Households
Business
State & Local Govt. Federal
13
California’s Prospects
14
California Bottoming Out with Nation
Nonfarm employment, percent change over prior years
US
15
California Outperforms in Goods, Underperforms in
Services and Government Jobs
Percent change, Nov 2009 over prior year
U.S.
Goods
Private Services
Gov’t
16
17
California’s Problems
• Dysfunctional government
• Fiscal pressures
• Infrastructure and schools
• Regulatory burden
• Expensive housing
• Water usage
18
California’s Strengths
• Entrepreneurial talent
• Technology frontrunner
• Environmental leader
• International edge
• Draw of our climate
19
San Diego
20
San Diego’s Jobs Decline Widespread
Percent change December 2009 over prior year
Total
21
San Diego’s Jobless Rate Rises
Monthly, percent
22
Home Sales and Prices Recover
Percent change, November 2009 over prior year
Prices
Sales
23
San Diego Home Price Trend Converges to the Nation’s
S&P/Case Shiller Home Price Index, Jan. 2000=100
San Diego
U. S.
24
San Diego Housing Permits to Rise
Thousands of units
25
Commercial Real Estate
• Distress across the board
• Gap closing between lease and sublease rents
• Market trough end of 2010
• Owners better capitalized than in early 1990s
26
Outlook for San Diego
Risks/Constraints
• Rising commercial real
estate vacancies
• Credit still tight
• Fiscal problems for state and
local governments
27
Positive Forces
•
•
•
•
•
•
•
Housing market improves
International trade
Technology
Alternative energy
Naval construction
Tourism
Health care and biotech
San Diego Jobs to Return
28
Implications for Facilities
Managers
29
Fastest Salary Growth Expected in
2010
30
Takeaways for Property Managers
•
•
•
•
•
Keep your tenants happy
Earn a raise in 2010
Take care of your employees
Re-examine your personal finances
Character counts