the state of the san diego economyifmasandiego.org/.../2015/02/ifma-presentation_rev2.pdfthe...

The Fermanian Business & Economic Institute – business & economics in action © FBEI 2010

The State of the San Diego Economy

Randy M. Ataide, JDFermanian Business & Economic Institute

Point Loma Nazarene University

International Facilities Management AssociationSan Diego Marriott Mission Valley

January 12, 2011

Key Topics

Overall Economic Backdrop

California’s Current Economic Status

2011 San Diego Regional Outlook

Questions



Economic Backdrop


-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

2007 2008 2009 2010e 2011f

U.S. Real GDP Builds Momentum4th quarter, percent change over prior year


0.0

1.0

2.0

3.0

4.0

5.0

2007 2008 2009 2010e 2011f

Consumer Prices Still Subdued4th quarter, percent change over prior year


0.0

1.0

2.0

3.0

4.0

5.0

6.0

2006 2007 2008 2009 2010 2011f

10-year Treasury Note

Fed Funds Target

Interest Rates to RiseQuarter-end, percent


California’s Current Economic Status


California Recovers with NationNonfarm employment, percent

change over prior year

-8

-6

-4

-2

0

2

4

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CA

US

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


California Suffers High UnemploymentPercent of labor force, monthly

CA

US


Job Performance across SectorsNovember 2010, percent change over prior year

-8 -6 -4 -2 0 2 4 6

Construction

Information

Trade, Trans, Utils

Government

Financial Services

Manufacturing

Leisure and Hospitality

Educ and Health Care

Prof. and Bus Serv.

Mining


California Home Sales See Volatile RecoveryResales, thousands of single-family units

300

350

400

450

500

550

600

650

2003 2004 2005 2006 2007 2008 2009 2010e 2011f


California Home Prices RecoverMedian price, percent change over prior year

-40

-30

-20

-10

0

10

20

2005 2006 2007 2008 2009 2010e 2011f


California Manufacturing Industries Posting Gains

Employment, percent change over prior year (November 2010)

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Petroleum Products

Food

Metal Products

Machinery

Electronics


California Projected Budget ShortfallsBillions of dollars, fiscal year

-6

-22.4 -21 -20 -19.4

-19

-30

-25

-20

-15

-10

-5

0

2011-12 2012-13 2013-14 2014-15 2015-16

Includes $6 billion carry over deficit from 2010-11

Source: Legislative Analyst


California to Add More Jobs in 2011December average, change over prior year, thousands

63

-535

-836

82

200

-1000

-800

-600

-400

-200

0

200

400

2007 2008 2009 2010e 2011f


PositivesConsumer ElectronicsExportsCleantechTourismTechnology Innovation, design

NegativesState and Local

GovernmentCommercial Real

EstateRegulationsWater

2011 California Outlook


2011 San Diego Outlook


-80

-60

-40

-20

0

20

2007 2008 2009 2010e 2011f

San Diego to See More Jobs in 2011December, change from previous year, thousands


Energy Efficiency

Military Construction Sets the Standard

Natural Ventilation and Heating

New Lighting Systems

Silver Level or Higher of LEED

0 5 10

Apartment

Industrial

Office

Retail


Commercial Real Estate ProspectsSan Diego, Scale 0 to 10

Abysmal Fair Excellent


StrengthsLittle New SupplyConsumer

Spending risesRetail Profits

ImproveLocation Matters

WeaknessesE-CommerceTenant “Poaching”Fringe Retail

Strips, Older Malls, Empty Box Power Centers

Retail


StrengthsMinimal New

SpaceJob Gains in

Professional ServicesHealth Care

Expands

WeaknessesCompanies Cut

CostsOutsourcing JobsGovernment

Demand Drops

Office


StrengthsInventory

RebuildingForeign TradeNo New SupplyTechnology Firms

WeaknessesMaturing 5-year

leasesE-Commerce and

Point-to-Point Shipping

Industrial


StrengthsSharp Drop in

BuildingJob GrowthMilitary Demand“Uncoupling”

WeaknessesHome Ownership

More Attractive“Shadow” Housing

Inventory

Apartments


Questions


Recommendations to Firms

Do not Depend on Government Stimulus or Strong

U.S. Recovery

Renegotiation Opportunities

Use Social Media in Marketing

Lock in Long-term Interest Rates

Hedge Against Inflation, Exchange Rates, and Credit

Risks

Keep Tenants Happy


The Fermanian Business & Economic Instituteat

Point Loma Nazarene University

Educational, Business & Economic Resourcesfor the San Diego Region

www.pointloma.edu/fbeiResearch & White PapersBusiness Plan WritingStrategic Retreats

Economic Consulting Public SpeakingInternships

MBA Program at Mission Valley Campus

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