Inland Empire Prosperity . . .
What’s It Beginning to Feel Like!
John Husing, Ph.D.
Economics & Politics, Inc.
Chief Economist, IEEP
After Losing 8.71 Million Jobs …
U.S. Jobs Long Slow Growth - Not Over-Heating
Petroleum Prices
Helps Families In Modest Income Areas
Value of the Dollar:
Helps Imports & Hurts Exports
Consumer Confidence, 2009-2015
Needed To Help Homes Sales
Confidence Helps Home Sales
Interest Rates Remain Benign
Encourages Home Sales
California Wage & Salary Employment: A Record Level
California Job Gains/Losses
2008-2010
-1,066,400
2011-2014
+1,301,708
2014 Up
+401,217
37.8% Up
Recovery
Great
Recession
Greg Devereaux
Chief Executive Officer San Bernardino County
Jay Orr
Chief Administrative Officer, Riverside County
2011-2014
Gained Back 139,767 of 142,933 lost or 98.8%
3,167 Jobs To Go
40,100
Very Rapid Job Growth: 2 Straight Years!
Inland Empire Growth was the 2nd Largest
Absolute Job Gain in California in 2014!
IE Job Growth Rate Ranked 3rd after the
Bay Area in 2014
IE Unemployment Rate:
Closing In on the National Level
7.3%
6.1%
Gold Mine Theory
Secondary Tier
Primary Tier
High-End & Office Based Jobs
Film & Commercials
Police & Fire
Engineering
Health Care
Legal & Accounting
Science & Information
Higher End Homes Draw
Well Educated Workers
UPLAND
$484,914
$465,778
Claremont
$568,700
Loma Linda
$357,037
$345,243
$427,095
$585,199 EASTVALE
$468,269
$459,000
CORONA
$429,667
$344,095
TEMECULA
$393,603
Migration of Educated Workers
Still Relatively Low Share of BA or Higher
Office Absorption Follows Higher-End Workers
High-End Jobs
Followed Workers
into the Area
Office Vacancy Rates Improving
But Still Very High
24.0%
15.8%
Office Space Ratio to Population
4.3 million people are Professionally Under-Served
More educated workers will cause more firms to migrate
Professionals, Mgmt., Utilities,
Information, Mining Slowly Coming Back
+4,100
Down
-5,600
Median Pay $55,308
-9,700
Films & Commercials
Economic Impact of Film Production
Film Projects
Health Care
Inland Empire Underserved
by Health Care Workers
36.5% More People Per
Health Care Worker in 2010
27.7% More People Per
Health Care Worker in 2014
Who Will Health Care Workers Serve?
27.3%
22.0%
Who Will Health Care Workers Serve?
Health Care Jobs: Continuous Growth
2013-2014 Growth of 4,000 Jobs
Physicians
Other
Ambulatory
Care
Hospitals
Residential
Care
1,200
1,500
0
1,300
4.4%
4.7%
0.0%
5.6%
Up
+24,100
Median Pay $57,443
+17,400
+6,700
Logistics Flow of Goods
Sophisticated Warehousing Operations
Port Container Volumes
Soaring Even With Labor Slowdown
Fulfillment
Warehousing
E-Commerce Growth Rates
Year Over Year by Quarter
Industrial Vacancy Rate
Recovering Everywhere!
2005/2006 2009Q3
Inland Empire 2.7%
12.8%
2014Q4
4.5%
San Diego
7.0%
12.0%
6.7%
Orange Co.
5.4%
6.5%
2.7%
L.A. Co.
2.1%
3.2%
1.9%
Industrial Construction
2014 IE Net Absorption: 16.1 million Sq. Ft.
Inland Empire Logistics Jobs
IE’s Major Competitive Advantage
Up
+20,100
+31,200
Median Pay $43,911
-11,100
Logistics Incredibly Important To
Inland Empire’s Economic Health
2012: 25% of New Jobs
2013: 19% of New Jobs
2014: 20% of New Jobs
Remember: Every Gold Mine Job Also
Funds Another Secondary Tier Job
PM 2.5: Diesel Pollution
Health Effects Institute
dgreenbaum@healtheffects.org
617-488-2331
EPA & CARB SPONSORED 2012-2015 SCIENTIFIC STUDY . . .
Truck Pollution Disappearing!
2007 Truck Engines: No Lifetime Cancer Risk
2007 Truck Engines: 90% End To NO2 & PM2.5 Emissions
2010 Engines: NO2 & PM2.5 “Substantially” Cut Further
Manufacturing:
Should Be A Major Growth Source
California Manufacturing Job Growth
Just 2.8% of U.S. Growth
Manufacturing Orders Rising
CA Is Not Loved By Executives & Entrepreneurs
Inland Empire Manufacturing Jobs
+5,100
Down
-33,200
Median Pay $49,138
-38,300
Future of Manufacturing Requires Logistics
No Where
Every Where
Construction: Finally Coming Back
Notices of Default At Low Levels
(1,066 in January 2014)
Negative Equity Has Dropped
4th Quarter 2009-2014
54.9% to 14.8%
Home Price Trends
2014,
71.0%
38.4% Above
Existing Home
-31.0%
Long Term Competitive
Price Advantage Still Exists
$373,000
$176,000
$183,000
Affordability to
Median Income Household
I. Empire: 47%-53%
LA/SD: 27%-73%
Orange: 21%-79%
Home Sales Volume Stagnant
Inland Empire’s In-migration From Coastal
Counties Has Stopped
-25,258 Left Area
-3,608 per year
Not Bringing Skills, Wealth, Income & Spending
Mortgage Credit Still Tight
Percentage of closed loans with an average FICO score
below 700 dropped:
• 32% in January 2014
• 30% percent in January 2015
Average FICO all loans was 731 up 5% from the 2014 average
The Future: Survey of 1,600 Millennials
Long Term Goals
• 66% want to live in the suburbs
• 24% want to live in rural areas
• 10% want to live in a city center
• Want to live in more space than they have now
• 81% want three or more bedrooms in their home
Why Low Volume
•Less Foreclosures
•Sellers Want or Need High Prices
•Buyer Credit Hurt By Past Foreclosures
•High FICO Scores
•FHA Lowered Conforming Mortgage Ceiling From $500,000 to $350,000
New Homes: $372,202
•Millennials Not Forming Families
•Fear
•Coming Help
• FHA Lowering PMI rate on conforming loans 1.35% to 0.85%
• Interest Rates Remaining Low
• FNMA & Freddie Mac Easing FICO & Down Payment Requirements
Construction Jobs: Finally Growing
Along Way From Healthy
+17,900
Median Pay $51,923
Still Down
-50,500
-68,400
Financial Sectors, Slow Comeback
+2,800
Still Down
-8,800
Median Pay $48,010
-11,600
Local Government
Retail Sales, Record Levels (Sort of)
Riv Co. up 8.0% above prior peak
SB Co. up 5.8% above prior peak
With 15.2% Inflation
-8.3% Less Purchasing
Power
Assessed Valuation Coming Back
(Riv Co. 2014: 7.7%; -6.3% below peak)
(SB Co. 2014: 6.2%; -2.2% below peak)
With 7.7% Inflation
-12.2% Less Purchasing Power
Local, State , Federal Job Base
Still Struggling!
+700
Down
-6,600
Median Pay $57,917
-7,300
Ontario International Airport Shrinking
This Needs A Solution!
Population & Job Base
Have More Than Doubled Since 1986
Educational Challenge For Adults &
Their Children
Time To Stop Talking & Do Something About This!
Education Sector: Innovation & Working Together
Chaffey College: Only federal grant in CA for manufacturing training
IEEP: Irvine Grant-Launch Initiative to move workers to Middle Class jobs
Governor’s Innovation Awards: Announcement Tomorrow
Cal State Grant 2nd Highest Ranked of 57 Applications by Staff
University of California, Riverside
Loma Linda University Health Systems
San Bernardino County Superintendent of Schools
Riverside County Superintendent of Schools
Coachella Valley, Palm Springs, and Desert Sands School Districts
Crafton Hills College; San Bernardino Valley College
Riverside Community College District; Riverside Community College
AVID
Inland Empire Economic Partnership
Coachella Valley Economic Partnership
Inland Valley Development Agency
Kelly Space and Technology
San Antonio Community Hospital; Redlands Community Hospital
Bank of America
Union Pacific Railroad
Imperial Irrigation District
California Steel Industries
Cardenas Market
County of San Bernardino
Assembly Member Brown; Mayor Montanez, Corona
Public & Private Education Growing As
Budgets Heal
Up
+6,400
+8,200
K-12 Median Pay
$41,557
Public Higher-Ed
$60,465
All Private Schools $49,930
-1,800
Gold Mine Theory
Secondary Tier
Primary Tier
Low Paying Job Growth
Retail, Consumer & Bus. Services, Hotel, Eat & Drink
Amusement, Agriculture, Employment Agency
Up
+21,600
+66,500
-44,900
Median Pay $28,475
2015 Forecast vs. 2014 Actual
Employment Forecast, 2015
Inland Empire, By Sector
2015 Forecast
2014 Actual
21,100
20,000
11,100
10,600
8,000
7,000
3,500
4,000
3,000
3,500
2,900 2,750
2,900
1,500
700
Low Paying
Logistics
Construction
Health Care
Education
High Paying
Manufacturing
700
Government
800
500
Fin., Ins., R. Est.
Where Will IE Be In Its Job History?
Unemployment falls 8.1% to 7.6%
3.9%
www.johnhusing.com