ahead of the curve 2015-2017s&p500 stock prices index data trends 0 400 800 1200 1600 2000 2400...

Post on 12-Oct-2020

2 Views

Category:

Documents

0 Downloads

Preview:

Click to see full reader

TRANSCRIPT

Warren County Office of Economic Development

Ahead of the Curve 2015-2017

ITR Economics itreconomics.com Brian L Beaulieu

ITR Economics provides the best economic intelligence to reduce

risk and drive practical and profitable business decisions.

Duration Forecast Result Accuracy

US GDP 15 $16.098 Trillion $16.317 Trillion 98.7%

US Ind. Prod. 13 101.5 (12MMA) 104.1 97.4%

EU Ind. Prod. 14 100.6 (12MMA) 101.5 99.1%

Canada Ind Prod 9 350.1 (12MMA) C$357.1 98.0%

China Ind Prod 21 564.9 (12MMA) 563.6 99.8%

US Housing 12 955 Ths. Units 1.0 mils. Units 94.7%

US Retail Sales 16 $2.751 Trillion $2.808 Trillion 98.0%

US Employment 13 144.9 Million 146.3 Million 99.0%

2014 Forecast Results 2

*Denotes year-end estimate based on most recent data available

3

Real Gross Domestic Product

3MMA

10

12

14

16

18

20

10

12

14

16

18

20

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

June 2013 Sept 2013

Sept 2013

GDPCON 3MMA

4

US, Ohio & the Midwest Annual GSP Growth Rate

2009 Dollars

-8

-6

-4

-2

0

2

4

6

8

'98 '00 '02 '04 '06 '08 '10 '12 '14 '16

U.S. Ohio Midwest

WC OH USA

High School 92.0% 88.5% 86.0%

BS/BA 37.9% 25.2% 28.8%

Income: $72.5 $48.3 $53.0

Poverty rate 6.3% 15.8% 15.4%

5

Unemployment Rates

2

3

4

5

6

7

8

9

10

11

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

U.S. Ohio

Feb 2015

OH 5.1%

US 5.5%

Cincinnati 4.1%

Dayton 6.1%

Raw

May-13 1.4

Jun-13 1.5

Jul-13 1.5

Aug-13 1.4

Sep-13 1.5

Oct-13 1.3

Nov-13 1.3

Dec-13 1.6

Jan-14 1.6

Feb-14 1.5

Mar-14 1.7

Apr-14 1.6

May-14 1.7

Jun-14 1.7

Jul-14 1.7

Aug-14 1.6

Sep-14 1.7

Oct-14 1.5

Nov-14 1.5

Dec-14 1.9

Jan-15 1.7

Feb-15 1.7

Mar-15 1.9

Apr-15 1.7

3MMT

4.4

4.4

4.4

4.2

4.1

4.2

4.5

4.7

4.8

4.8

5.0

5.0

5.1

5.0

5.0

4.8

4.7

4.9

5.1

5.3

5.3

5.3

12MMT

18.0

18.2

18.4

18.6

18.8

19.0

19.2

19.4

19.7

19.8

20.0

20.2

20.3

12/12

26.7%

25.5%

25.2%

22.4%

20.0%

18.3%

15.4%

12.7%

3/12

15.9%

13.6%

13.6%

14.3%

14.6%

16.7%

13.3%

12.8%

10.4%

10.4%

6

Data Preparation

7

Ohio Construction Industry Employment

Thousands of People

2.3% 4.4%

195.2

160

210

260

310

360

-24

-16

-8

0

8

'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

MMA R-O-C

3/12

12/12

3MMA 12MMA

8

World GDP, Trillions of US $, Current Prices

Percent of 2013 World GDP

Source: IMF

73.982 Trillion US$

OHIO / IRAN

#21 ranking

Annual Average Data Trends

US to Europe Industrial Production 9

9

60

80

100

120

140

40

60

80

100

120

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Europe US

US

Europe

10

Interest Rates for Long-Term Government Bonds

2.4%

0.3% 0.5%

1.3%

0.3% 0.3%

0.5% 0.2%

11.7%

0.8%

1.3%

0.4% 0.3%

3.2%

1.7% 1.2%

0.4%

1.6% 1.9%

0%

5%

10%

15%

Latest yield

0.0%

11

Ohio to Warren County Population

Millions of Persons

0.01

0.10

1.00

1.00

10.00

100.00

Warren County Ohio

Population, Ohio

Population, Warren County

WC 4.1% Population Growth

OH 0.5% (2010-2014)

12

Ohio to Warren County Number of Proprietors

Thousands of Proprietors

1

10

100

10

100

1,000

10,000

Warren County Ohio

No. of Proprietors, Ohio

No. of Proprietors, Warren County

13

Ohio to Warren County Total Full-Time

and Part-Time Employment

Millions of Jobs

0.00

0.02

0.03

0.05

0.06

0.08

0.09

0.11

0.12

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Warren County Ohio

Total Jobs, Ohio

Total Jobs, Warren County

14

US Industrial Production to ITR Leading Indicator™

USIP – 12/12 Indicator - Monthly

-15

-10

-5

0

5

10

15

-15

-10

-5

0

5

10

15

'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Indicator US IP

Indicator - Monthly

US IP - 12/12

Reported in ITR Trends Report – ITR Advisor

15

US Leading Indicator

Source: The Conference Board

6.2%

-25

-20

-15

-10

-5

0

5

10

15

-25

-20

-15

-10

-5

0

5

10

15

'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

1/12

2010 = 100

16

Purchasing Managers Index

1/12 Rate-of-Change

Source: Institute for Supply Management

-5.3

-50

-25

0

25

50

75

-50

-25

0

25

50

75

'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

1/12

Non-Manufacturing Purchasing Managers Index 17

57.3

45

50

55

60

45

50

55

60

'10 '11 '12 '13 '14 '15 '16

MMA R-O-C

3MMA 12MMA

17

Above 50 Indicates expansion

Institute for Supply Management

18

S&P500 Stock Prices Index

Data Trends

0

400

800

1200

1600

2000

2400

0

400

800

1200

1600

2000

2400

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Raw

12MMA

Source: Wall Street Journal

19

Nondefense Capital Goods New Orders w/o Aircraft

Billions of Dollars

1.3% 4.8%

$851.0

500

750

1000

1250

1500

-60

-40

-20

0

20

'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

MMT R-O-C

3/12

12/12

3MMT

12MMT

20

-21

-14

-7

0

7

14

21

-45

-30

-15

0

15

30

45

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Indicator Company A

Company A

Indicator - 1/12

Executive Vantage Point (EVP) for Companies

20

Generating the Quantitative Forecast

21

ITR Long Term Business Cycle Theory News and Market Observations

Leading Economic Indicators Internal Trends

22

Crude Oil Futures Prices to

Natural Gas Future Prices

Raw Data

0

3

6

9

12

15

-5

25

55

85

115

145

'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Gas Oil

Oil

Natural Gas

23

US Consumption of Crude Oil & Petroleum Products

to Real Gross Domestic Product

Data Trends

Sources: EIA, BEA

6

10

14

18

0.4

0.5

0.6

0.7

1985 1990 1995 2000 2005 2010 2015 2020

GDP Trils C2009$

Oil Bils Barrels

Oil Consumption - Raw Data

GDP - 3MMA

24

US Total Renewable Energy Consumption

Quadrillion Btu

Source: EIA

9.6

3

4

5

6

7

8

9

10

3

4

5

6

7

8

9

10

25

Crude Oil Futures Prices to JP Morgan Global PMI

12/12 Rates-of-Change

-60

-30

0

30

60

90

-60

-30

0

30

60

90

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Global PMI Oil Prices

Oil Prices

Global PMI

The JP Morgan Global PMI 12/12 has a 10

month lead time to the Crude Oil Futures

Prices 12/12 through business cycle highs

and lows.

Correlation: 0.42

26

Crude Oil Futures Prices to Cushing Hub Inventories

12/12 Rates-of-Change

-60

-30

0

30

60

90

-60

-30

0

30

60

90

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Inventories Oil Prices

Oil Prices

Inventories Correlation: 0.61

27

Employment – Private Sector

Annual Data Trend

85

90

95

100

105

110

115

120

85

90

95

100

105

110

115

120

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Employment Mils of Jobs

Private Sector Employment Growth

Job Openings

Involuntary Part Time Employment

Quit Rate – Rising

19.4% B 2.4% B

-9.2% D 11.0%

28

Ohio to Warren County Total Full-Time

and Part-Time Employment

12/12 Rates-of-Change

1.2%

3.7%

-9

-6

-3

0

3

6

9

-6

-4

-2

0

2

4

6

1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

Warren County Ohio

Ohio

Warren County

29

Ohio to Warren County Wage & Salary Jobs

Millions of Jobs

0.00

0.01

0.03

0.04

0.06

0.07

0.09

0.10

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Warren County Ohio

Wage & Salary Jobs, Ohio

Wage & Salary Jobs, Warren County

30

Ohio to Warren County Wage & Salary Jobs

12/12 Rates-of-Change

1.1%

4.2%

-12

-8

-4

0

4

8

12

-6

-4

-2

0

2

4

6

1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

Warren County Ohio

Ohio

Warren County

31

Consumer Price Index

Rates-of-Change

0.0%

1.4%

-3

0

3

5

8

10

-3

0

3

5

8

10

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

1/12

12/12

32

FOMC Member Interest Rate Projections

Source: Federal Reserve

Fed Open Market Committee

0

1

2

3

4

5

6

0

2

4

6

8

10

12

14

16

1982 1986 1990 1994 1998 2002 2006 2010 2014

%

Yield on 10 Year Treasury Note Source: Factset

Corporate AAA Bond Yields Inverted for Prices

Raw Data

34

34

0

3

6

9

12

15

18

0

3

6

9

12

15

18

Raw

Source: Federal Reserve Board

35

Real Personal Income Less Transfer Receipts

Average per Person Age 18 to 65

12MMA Data Trend

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

Sources: Federal Reserve Bank of St. Louis

U.S. Bureau of Labor Statistics

36

Ohio to Warren County Personal Income

Billions of Dollars

$0.1

$1.0

$10.0

$10

$100

$1,000

Warren County Ohio

Personal Income, Ohio

Personal Income, Warren County

37

Ohio to Warren County per Capita Income

Thousands of Dollars

$1

$10

$100

$1

$10

$100

Warren County Ohio

Income per Capita, Ohio

Income per Capita, Warren County

38

Ohio to Warren County Wages & Salaries

Billions of Dollars

$0.0

$0.3

$3.0

$30.0

$3.0

$30.0

$300.0

$3,000.0

Warren County Ohio

Wages & Salaries, Ohio

Wages & Salaries, Warren County

Source: Reuters/University of Michigan 39

Consumer Expectations and Retail Sales

Index of Expectations

1.2

1.6

2.1

2.5

2.9

45

61

78

94

110

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Sales Expectations

Expectations - Actual

Retail Sales - 12MMT

40

Total Retail Sales (deflated)

Trillions of Dollars

6.6%

4.6%

$2.83

1.65

2.15

2.65

3.15

3.65

4.15

4.65

-18

-14

-9

-5

0

5

9

'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

MMT R-O-C

3/12 12/12

3MMT

12MMT

41

Housing Starts

Millions of Units

Mar ‘13

May ‘11

Dec ‘09

8.2%

9.5%

1.013

0.2

1.0

1.9

2.7

3.5

4.4

5.2

-80

-60

-40

-20

0

20

40

'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

MMT R-O-C

3/12

12/12

3MMT 12MMT

42

Remodeling Market Index

3MMA

Source: National Association of Home Builders

62.9 Northeast 66.3 West

56.3 South 59.0 Midwest

15

30

45

60

75

15

30

45

60

75

'02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Northeast

Midwest

South

West

43

US to Ohio Building Permits

12/12 Rates-of-Change

-50

-25

0

25

50

-50

-25

0

25

50

'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 U.S. Ohio

44

Ohio Housing Unit Building Permits

Thousands of Units

-0.2% -2.8%

20.2

5

35

65

95

125

155

-105

-70

-35

0

35

70

'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

MMT R-O-C

3/12

12/12

3MMT 12MMT

45

US to Warren County

Median Home Sales Price

Annual Data Trends

Source: Zillow.com

$207.2

$187.8

150

170

190

210

230

150

170

190

210

230

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Warren County US

US Median Price

Warren County Median Price

46

Ohio to Warren County

Median Home Sales Price

Annual Data Trends

Source: Zillow.com

$127.8

$187.8

100

120

140

160

180

200

220

100

120

140

160

180

200

220

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

Warren County Ohio

Ohio Median Price

Warren County Median Price

47

Ohio Housing Price Index

Year over Year % Change

120

135

150

165

180

195

120

135

150

165

180

195

Raw

48

US Industrial Production to

Non-Residential Construction

Data Trends

50

150

250

350

450

35

65

95

125

155

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Construction Index

Index

Construction

Private Chemical +61.9% and accelerating

Warehouse +53.2% and accelerating

Private Manufacturing +19.7% and accelerating

49

US Industrial Production to Gross Domestic Product

Year-over-year, Quarter to Quarter (3/12)

-6.8%

-2.9%

-5.8%

-15.1%

4.0%

-16

-12

-8

-4

0

4

8

12

-16

-12

-8

-4

0

4

8

12

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

GDP US IP

GDP

US IP

0

20

40

60

80

100

120

140

0

20

40

60

80

100

120

140

1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

120.6%

50

Total U.S. Public Debt

(% of GDP)

The Long View…

Age Group US China India Ger Mex Braz Japan Can

65 & older 19.6 17.2 8.9 27.9 11.5 12.2 32.2 24.8

40-64 29.0 37.9 28.9 32.9 29.7 32.7 32.8 30.8

20-39 25.4 24.0 31.0 21.5 28.9 29.1 19.5 23.7

less than 20 25.9 21.0 31.4 17.6 29.9 25.9 15.6 20.6

Estimated Percent of Total Population in 2030

52

Share of Population Age 65 and Over

U.S. Dependence on Foreign Oil Declining Net imports as a share of domestic consumption

Source: Energy Information Administration 53

60.4% 59.9% 58.2% 57.0% 51.5% 49.2%

44.7% 40.0%

32.9% 26.9%

0%

10%

20%

30%

40%

50%

60%

70%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1. Near –Sourcing 2. Technology 3. Capital vs. Labor 4. Energy 5. Consumer base

45% increase in Robotics N.O. in 2014 in this industry alone

56

Look for More Opportunities in These Sectors

► Energy Distribution ► Housing

► Water

Distribution/Conservation ► Printed Electronics

► Infrastructure ► Robotics

► Vocational Education ► Security

► Health Care ► 3-D Printing

► Food ► Natural Resources (Harvesting/Conserving)

► Mexico ► Entertainment

The next Great Depression is coming.

Are you ready?

Order your copy today

from Barnes & Noble.

Available in e-book and print format.

58

ITR Management Objectives™

Preparing for the Rise Ahead

1. Budget for the rise…do you have enough….

2. Invest in customer market research to reduce price sensitivity

3. Make sure your training and retention programs are top notch

4. Marketing and advertising spending increasingly effective

5. Drive efficiencies with technology

6. Hire sales people and leaders

7. Lock in costs toward the end of 2015

8. Expand credit offerings to garner market share

9. What are you going to do to avoid 2019?

Source: Census Bureau

Income by Household % in 1967 % in 2013

Less than $35,000 39.3% 34.4%

$35,000 to $200,000 59.8% 60.8%

Over $200,000 0.9% 4.8%

Household Distribution by Income Level

Source:

Census Bureau

39.3% 34.4%

59.8% 60.8%

0.9% 4.8%

0

10

20

30

40

50

60

70 Percentage

$ 0 - 35k

$ 35k - 200k

$ 200k +

60

8 Must Watch Items

ITR Leading Indicator

Housing Starts

Bond Market

US Leading Indicator

Purchasing Managers Index

Retail Sales

Employment

Nondefense Capital Goods New Orders

Available from ITR via ITR Trends Report,

the ITR Advisor, or on the web

One Month Complimentary

Subscription

SUBJECT: “Warren County is Great!”

( Inc lude your Company Name and Emai l Address )

Contact Us Today!

One Month

Complimentary

Subscription

ITR@ITReconomics.com

top related