hampton roads economic forecast 2016management federal government real estate, rentals, &...
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2012 REGIONAL FORECAST
Hampton Roads Economic Forecast
Hampton Roads Planning District Commission James Clary Senior Economist January 21, 2016
2016
Employment Since the Great Recession
-8%
-6%
-4%
-2%
0%
2%
4%
Perc
ent J
ob L
oss R
elat
ive
to P
eak
Months Since Peak Employment
U.S. Virginia Hampton Roads
Source: Bureau of Labor Statistics, HRPDC
Hampton Roads 2016 Regional Economic Forecast 2
Hampton Roads Projected Return to Peak Employment
-60
-50
-40
-30
-20
-10
0
Empl
oym
ent D
eclin
e fr
om P
eak
Jul-2
007
(Tho
usan
ds o
f Job
s)
Job Loss Average Job Growth Best Year of Job Growth (1997)
Source: Bureau of Labor Statistics, HRPDC
Dec 2016
Dec 2018
Hampton Roads 2016 Regional Economic Forecast 3
Hampton Roads Employment Change: Nov '07 - Nov '15
ConstructionRetail Trade
Local GovernmentInformation
Wholesale TradeManufacturing
Real Estate, Rentals, & LeasingTransportation & UtilitiesAdministrative & Support
Finance & InsuranceManagement
State GovernmentEducation Services
Scientific & Technical ServicesOther Services
Federal GovernmentLeisure & Hospitality
Healthcare & Social Assistance
Change in Employment
Source: Bureau of Labor Statistics, HRPDC
Hampton Roads 2016 Regional Economic Forecast 4
Hampton Roads Employment Change: Nov '14 - Nov '15
Retail TradeTransportation & Utilities
Local GovernmentOther ServicesManufacturing
Wholesale TradeInformation
Scientific & Technical ServicesState Government
ManagementFederal Government
Real Estate, Rentals, & LeasingHealthcare & Social Assistance
Education ServicesFinance & Insurance
ConstructionAdministrative & Support
Leisure & Hospitality
Change in Employment
Source: Bureau of Labor Statistics, HRPDC
Hampton Roads 2016 Regional Economic Forecast 5
Unemployment Rate in Nov 2015 MSAs with Population between 1-3 Million
4.8%
0%
1%
2%
3%
4%
5%
6%
7%
Une
mpl
oym
ent R
ate
by M
SA
MSAs Source: Bureau of Labor Statisics, HRPDC
Hampton Roads 2016 Regional Economic Forecast 6
U.S., Virginia, & Hampton Roads Unemployment Rate
(Seasonally Adjusted)
0%
2%
4%
6%
8%
10%
12%
Une
mpl
oym
ent R
ate
U.S. Hampton Roads Virginia
Source: Bureau of Labor Statistics, HRPDC
Hampton Roads 2016 Regional Economic Forecast 7
The Real Unemployment Rate
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Sour
ce o
f Une
mpl
oym
ent
U.S. Unemployment by Type
Part-Time for Economic Reasons (U6) Marginally Attached(U5) Discouraged Workers(U4) Official Rate: Jobless and Seeking Work(U3)
Source: Bureau of Labor Statistics, HRPDC
8
Hampton Roads Retail Sales (3 Month Moving Average)
$1.2
$1.6
$2.0
Billi
ons o
f Dol
lars
(S
easo
nally
Adj
uste
d)
-12.6% +19.4%
+4.3%
Source: Virginia Department of Taxation, HRPDC
Hampton Roads 2016 Regional Economic Forecast 9
Automobile Sales
0
20
40
60
80
100
120
0
2
4
6
8
10
12
14
16
18
20
HR Autom
obile Sales (Thousands) U.S
. Aut
omob
ile S
ales
(Mill
ions
)
United States
Hampton Roads
Sources: Bureau of Economic Analysis, Virginia Automobile Dealers Association, HRPDC
Hampton Roads 2016 Regional Economic Forecast 10
Home Price Index Growth in Hampton Roads, Virginia, and the U.S.
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Year
-ove
r-Ye
ar C
hang
e Hampton Roads Virginia U.S.
Source: Federal Housing Finance Agency, HRPDC
Hampton Roads 2016 Regional Economic Forecast 11
Gasoline Prices in Hampton Roads
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
Source: AAA Fuel Gauge Report, HRPDC
$1 price drop saves the average HR household $1,300 in one year $1 price drop adds $850 million to the regional economy
$3.55 Jun ‘14
$1.74 Jan ‘16
$3.92 Apr ‘12
Hampton Roads 2015 Regional Economic Forecast 12
DoD Budget- Deals Don’t Close Gap
Hampton Roads 2016 Regional Economic Forecast 13
National Defense Expenditures
$0
$100
$200
$300
$400
$500
$600
$700
$800
Billi
ons
of D
olla
rs
OCOBase Budget
Hampton Roads 2016 Regional Economic Forecast 14
The Year Ahead…
The Good: • Federal budget adds a
degree of certainty • Growing national economy • Consumer spending is
strong • Low energy prices • Interest rates continue to
remain low • Corporate investment and
office space leasing is up
The Bad: • Federal spending continues
to be tight • Loss of local Navy personnel • Region’s housing market
remains weak • Dollar is high
– Tourism impacts – Factory activity is down
• Slow growth outside of the U.S.
Hampton Roads 2016 Regional Economic Forecast 15
Crude Oil Price Forecast
$0
$20
$40
$60
$80
$100
$120
2012 2013 2014 2015 2016 2017 2018 2019 2020
U.S
. Dol
lars
Per
Bar
rel
World Bank
IMF
EIU
OECD
Hampton Roads 2016 Regional Economic Forecast
Sources: Knoema.com, HRPDC
16
Impact of Fed Rate Hike
• Mortgage Rates • Auto Loans • Credit Cards • Saving rates • Investment Market
Hampton Roads 2016 Regional Economic Forecast 17
Annualized Percent Change in U.S. Gross Domestic Product
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Annu
alize
d Pe
rcen
t Cha
nge
Consensus Forecast
Hampton Roads 2016 Regional Economic Forecast 18
HRPDC Forecast for 2016 2015 2016
(Year to Date) ForecastU.S.
Real GDP 2.6% 2.5%
Interest Rates
Short Government Rates 0.0% 0.7%Long Government Rates 2.1% 2.7%
Hampton Roads
Gross Product NA 1.3%
Civilian Employment 0.8% 0.8%
Unemployment Rate 4.8% 4.7%
Retail Sales 3.6% 4.1%
Auto and Truck Sales 5.2% 4.5%
Value of Single-Family Residential Building Permits 7.6% 2.3%
Hampton Roads 2016 Regional Economic Forecast 19
Discussion James Clary HRPDC Senior Economist [email protected]
Hampton Roads 2016 Regional Economic Forecast 20