the washington dc regional economy

8/1/12

GMU Center for Regional Analysis 1

Regional Economics Workshop

August 1, 2012

The Washington DC Regional Economy

Current Conditions and Outlook

Lisa A. Sturtevant, Ph.D.

Assistant Research Professor, School of Public Policy Deputy Director, Center for Regional Analysis

George Mason University

The Washington Area’s Current Economic Performance

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US GDP and Washington GRP

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9

10 19

70

1975

1980

1985

1990

1995

2000

2005

2010

Annual % Change

Washington GRP

US GDP

Source: Bureau of Economic Analysis, GMU Center for Regional Analysis

15 Largest Metro Areas 2010 GRP

1,281

736

532 425 385 374 347 326 314 272 258 231 200 198 191

0

200

400

600

800

1000

1200

1400 $Billions


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15 Largest Metro Areas GRP Percent Change 2007-10

-6 -4 -2 0 2 4 6 8

10 12 %


-100

-50

0

50

100

150

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

(000s)

Annual Job Change – MOTYC Washington MSA

Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

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15 Largest Job Markets Job Change: Jun 2011 – Jun 2012

-20

0

20

40

60

80

100

120 (000s)

Washington + 36,100


Job Change by Sector Jun 2011 – Jun 2012

Washington MSA

3 -1

0 -2

6 0

5 7

-3 6

13 -4

7

-20 -10 0 10 20 30

Transp. & Util. Wlse Trade

Manufacturing Information

Financial Other Services

Construction Leisure & Hosp.

Retail Trade State & Local Govt

Educ & Health Svcs Federal Govt.

Prof. & Bus. Svcs (000s) Total = 36,100


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Professional & Business Services Washington MSA

-20 -15 -10

-5 0 5

10 15 20 25 30

2002

2005

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

(000s) Annual Data Annual Month over Year 2008 2009 2010 2011 2012

Tot 2011 = 688,700 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Federal Government Washington MSA

-20 -15 -10

-5 0 5

10 15 20 25 30

2002

2005

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

(000s) Annual Data Annual Month over Year 2008 2009 2010 2011 2012

Tot 2011 = 383,600 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

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0

2

4

6

8

10

12

14

9.0 – DC 8.2 – U.S. 5.8 – SMD 5.3 – MSA 4.2 - NVA

Unemployment Rate


%

The Changing Role of the Federal Government

in the Washington Area

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0

20

40

60

80

100

120

140

160

180 19

85

1986

19

87

1988

19

89

1990

19

91

1992

19

93

1994

19

95

1996

19

97

1998

19

99

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

2010

Total Procurement

Federal Spending – Washington MSA Total & Procurement $ Billions

Source: Census Consolidated Federal Funds Report

0

10

20

30

40

50

60

70

80

90

Federal Procurement Washington MSA

$ Billions

< 80-90 = $92 B > > | < 91-00 = $208 B > | < 01–10 = $562 B > |

Total = $862 Billion

Source: Census Consolidated Federal Funds Report

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150

200

250

300

350

400 19

50

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

Federal Employment Washington MSA

(000s) Eisenhower Kennedy – Johnson

Nixon - Ford

Carter Reagan Bush 1 Clinton Bush 2

- 22

+ 80

+ 36 + 18 - 6 + 4

- 42 + 22

Obama

+30

Source: BLS, GMU Center for Regional Analysis

2010 Structure of the Greater Washington Economy

Local Serving Activities 34.8%

Non-Local Business 12.0 %

Total Federal 39.8%

Procurement 19.1%

Assn 1.8%

Int’l 3.5%

Oth

er 1

.5%

Other Federal 10.7 %

Health/Ed.

4.5%

Fed Wages & Salaries 10.0%

Source: GMU Center for Regional Analysis

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Near-Term Economic Outlook for the Washington Metropolitan Area

Growth Projections for Federal Spending and GRP: 2011- 2015

(in billions of 2010 dollars, annual % change)

Year Federal $s WMSA GRP 2010 $169.0 $425.0 2011 2.0% 2.6% 2012 1.0% 2.7% 2013 0.0% 2.9% 2014 1.0% 3.3% 2015 1.5% 3.2% 2015 $178.5 $491.2 Change ’10-15 5.6% 15.6%

Source: GMU Center for Regional Analysis, assumes Federal cuts associated with sequestration do not go into effect

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-4

-2

0

2

4

6

8 20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

20

16

%

Source: Global Insight, GMU Center for Regional Analysis

GDP/GRP 2000 - 2016

Washington

U.S.

Employment Change by Sub-state Region (000s)

2008 2009 2010 2011 2012 2013 2014 2015

D.C. 10.1 -2.2 9.5 11.2 11.8 12.5 14.0 13.0

Sub. MD -3.3 -25.1 -5.9 4.0 6.2 8.5 9.0 9.5

No. VA 6.1 -23.0 8.7 17.4 18.0 21.0 22.0 20.5

REGION 12.9 -50.3 11.3 32.6 36.0 42.0 45.0 43.0

Average Annual Change 1990-2010 = 36,000 Source: BLS, GMU Center for Regional Analysis, 2009-2015 based on 2012 Benchmark data from BLS, Revised 5/1/2012 NOTE: 2011 Total is the sum of subregions and does not agree with the Mar 13, 2012 published MSA total. Assumes Federal cuts associated with sequestration do not go into effect

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Area Total $s DoD $s % Total $s %US DoD United States $3,276.4 $557.0 17.0 100.0 District of Columbia 61.9 8.7 14.0 1.6 Maryland 96.3 18.7 19.4 3.4 Virginia 136.1 58.1 42.7 10.4 Total Area $294.3 $85.5 29.0 15.4

Source: Consolidated Federal Funds Report, 2010

Total Federal and DoD Spending in DC, Maryland and Virginia, 2010

(in billions of dollars)

The Employment Impact the of Budget Control

Act of 2011 on the Maryland-DC-Virginia Region

State Job Losses* Job Losses* Total Job* DoD Cuts Non-DoD Cuts Losses

Maryland 39,395 75,400 114,795 District of Columbia 15,169 112,238 127,407 Virginia 136,191 71,380 207,571 Totals 190,755 259,018 449,773 % U.S. job losses 17.5 24.7 21.0 *direct, indirect and induced job losses resulting from BCA-mandated federal spending reductions in FY 2013; of the direct job losses totaling 161,161, an estimated 65,189 workers would be federal employees (40.4%) and 95,972 (59.5%) workers would be contractors, suppliers and vendors. Source: “The Economic Impact of the Budget Control Act of 2011 on DOD and Non-DOD Agencies,” Stephen S. Fuller, July 17, 2012.

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The Economic Impact of the BCA of 2011

Total and Direct Gross State Product FY 2013

(in billions of 2013 dollars)

Source: GMU Center for Regional Analysis

State Direct GSP Loss

Total GSP Loss

District of Columbia $7.443 $12.814 Maryland 6.811 11.546 Virginia 12.579 20.876

George Mason University Center for Regional Analysis

cra.gmu.edu

the washington dc regional economy

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