Washington DC Regional Economic Analysis April 2014

The Democratic Business Council
of Northern Virginia
April 18, 2014
The Washington Metropolitan Region
Its Economic Outlook and
Future Challenges
Stephen S. Fuller, Ph.D.
Dwight Schar Faculty Chair and University Professor
Director, Center for Regional Analysis
George Mason University

0
5
10
15
20
25
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
1982-Q3
1991-Q1
2001-Q4
2009-Q2
Quarters After Trough
%ChangeinGDP*
Recession Recovery Patterns of GDP
Past Four Recessions
Sources: Bureau of Economic Analysis, GMU Center for Regional Analysis
*in 1992 or 2009 Chained Dollars

Contributions to Post Recession Recoveries
Average Growth After 18 Quarters
Source: Bureau of Economic Analysis
4.8
3.2 3.1
2.4
3.0
2.2 2.1
1.5
0.6
0.3 0.3 0.2
0.3
0.8 0.6
0.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1982-Q3 1991-Q1 2001-Q4 2009-Q2
Recession
GDP Personal Consumption Residential Investment ExportsAvg % Chg

Decreasing Role of Residential Investment
% of GDP 18 Quarters Post-Recession
Source: Bureau of Economic Analysis
3.4%
5.0%
3.5%
4.0%
5.2%
5.7%
2.7%
3.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
PercentofGDP
Quarters After Start of Recession
1982-Q3
1991-Q1
2001-Q4
2009-Q2

U.S. Leading Index
Month-Over-Year Percent Change
-25
-20
-15
-10
-5
0
5
10
15
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
2006 2007 2008 2009 2010 2011 2012 2013
Source: The Conference Board, GMU Center for Regional Analysis

30
35
40
45
50
55
60
65
Mfg
N-Mfg
ISM Manufacturing and
Non-Manufacturing Indices
Source: Institute for Supply Management

0
20
40
60
80
100
120
140
Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
100
Consumer Confidence
Source: The Conference Board, GMU Center for Regional Analysis
Expectations
Current Situation

-
1
2
3
4
5
6
7
8
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
30-Yr
10-Yr Treas
Fed
Interest Rates
2001 - 2019
Forecast > > > >
Source: IHS Global Insight April 8, 2014

200
250
300
350
400
450
500
550
600
2000
2500
3000
3500
4000
4500
5000
5500
6000
Existing (Left Axis)
New (Right Axis)
U.S. New and Existing Home Sales
(000s) (000s)
Source: National Association of Home Builders (New), National Association of Realtors (Existing)

Residential Construction
and Resales Forecasts
(millions of Units)
Year Housing Starts Existing House Sales
2005 2.073 7.076
2011 0.612 4.278
2012 0.783 4.661
2013 0.929 5.073
2014 1.045 5.039
2015 1.389 5.662
2016 1.582 5.658
2017 1.603 5.428
2018 1.602 5.384
Source: IHS Global Insight “US Executive Summary” April 8, 2014

-10
-8
-6
-4
-2
0
2
4
6
2007 2008 2009 2010 2011 2012 2013 2014 2015
U.S. Gross Domestic Product
Quarterly Change: 2007 – 2015
%
Forecast > >
Source: Bureau of Economic Analysis, Global Insight April 8, 2014

The Washington Economy:
Impacts of the Recession
and the Sequester

-4
-2
0
2
4
6
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
%
Source: IHS Global Insight, GMU Center for Regional Analysis
U.S. GDP and Washington Area GRP
2001 – 2013 – 2018
Washington
U.S.

Recession Impacts
• GRP declined 0.8% in 2008
• The region’s lost 178,100 jobs
Sequester+ Impacts
• Federal procurement $s down by 14.5%
• There are 21,200 fewer federal jobs
• Federal payroll is down 4.8%
or by $2 billion

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
Jul
Oct
Jan
Apr
Jul
Oct
Jan
(000s)
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Mar-14 Total: 364.4
Annual Data Annual Month over Year
2008 2009 2010 2011 2012 2013

WMSA Payroll Job Change: Private Sector
The Great Recession and Recovery
-4
-7
-10
-12
-10
-8
-48
-34
-23
0
-23
-60 -40 -20 0
Transp. & Util.
Wlse Trade
Manufacturing
Information
Financial
Other Services
Construction
Leisure & Hosp.
Retail Trade
Educ & Health Svcs
Prof. & Bus. Svcs
(000s)
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
1
0
0
0
7
10
15
50
22
48
32
0 20 40 60
Total -178 Total 185
Aug 2008-Feb 2010 Feb 2010-Mar 2014

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
Jul
Oct
Jan
Apr
Jul
Oct
Jan
(000s) Annual Data Annual Month over Year
2008 2009 2010 2011 2012 2013
Mar-14 Total: 696.1Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
Prof & Bus
Svcs
Prof, Sci &
Tech Svcs
Management
Admin & Waste
Mgt
Aug-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
WMSA Payroll Job Change from Aug-2008
Professional & Business Services
As measured in January of each year(000s)

-10
0
10
20
30
40
50
60
70
Health &
Educ Svcs
Educ. Svcs
Health Svcs
Ambulatory
Health Svcs
Hospitals
Aug-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Education & Health Services

-40
-30
-20
-10
0
10
20
30
Leisure &
Hospitality
Food &
Drinking
Places
Accommodation
Arts & Rec
Aug-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Leisure & Hospitality

-30
-25
-20
-15
-10
-5
0
5
10
Retail
Department
Stores
Transportation
& Utilities
Wholesale
Trade
Aug-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Trade, Transportation & Utilities
As measured in January of each year
(000s)

-45
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
Other Services
Manufacturing
Information
Svcs
Construction
Aug-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Construction, Mfg, Info & Other Services

-12
-10
-8
-6
-4
-2
0
Financial
Activities
Finance &
Insurance
Credit &
Related
Real Estate &
Leasing
Aug-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Financial Activities

Washington Metropolitan Area Job Change
by Wage Category between 2008 to 2013
(60) (40) (20) 0 20 40 60 80
Lower Wage
Mid-Wage
Higher-Wage
Thousands
2008-2009 2010-2013
Sources: EMSI 2013.3 & GMU Center for Regional Analysis

The Washington Economy:
2013 Performance

15 Largest Job Markets
Job Change: 2012 – 2013
0
20
40
60
80
100
120
140
(000s)
Washington + 30,300

15 Largest Job Markets
Job Change: Mar 2013 – Mar 2014
-20
0
20
40
60
80
100
120
140
(000s)
Washington +5,500

Annual Job Change
Washington MSA, 2002-2014
-80
-60
-40
-20
0
20
40
60
80
100
2002
2005
2008
(000s)
Annual Data Annual Month over Year
2010 2011 2012 2013

Job Change by Sector
Mar 2013 – Mar 2014
Washington MSA
0
0
-3
-3
2
1
1
9
6
8
8
-11
-12
(20.0) (10.0) - 10.0 20.0 30.0
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 = 5,500

Feb 2014 – Mar 2014
Washington MSA
0
-1
0
0
0
0
0
7
1
4
1
-1
5
(20.0) (10.0) - 10.0 20.0 30.0
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 = +15,700

Annual Job Change
District of Columbia, 2002-2014
-40
-30
-20
-10
0
10
20
30
40
50
60
2002
2005
2008(000s) Annual Data Annual Month over Year
2010 2011 2012 2013

Mar 2013 – Mar 2014
District of Columbia
0
0
0
0
0
-1
0
1
2
1
7
-6
1
(20.0) (10.0) - 10.0 20.0 30.0
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 3,700

Feb 2014 – Mar 2014
District of Columbia
0
0
0
0
0
-1
0
2
0
0
1
0
1
(20.0) (10.0) - 10.0 20.0 30.0
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 3,000

Annual Job Change
Suburban Maryland, 2002-2014
-40
-30
-20
-10
0
10
20
30
40
50
60
2002
2005
2010 2011 2012 2013

Mar 2013 – Mar 2014
Suburban Maryland
2
0
-1
-1
0
0
-3
6
2
6
2
-1
-4
(20.0) (10.0) - 10.0 20.0 30.0
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 7,400

Feb 2014 – Mar 2014
Suburban Maryland
0
0
0
0
0
0
-1
2
1
2
0
0
2
(20.0) (10.0) - 10.0 20.0 30.0
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 5,100

Annual Job Change
Northern Virginia, 2002-2014
-30
-20
-10
0
10
20
30
40
50
60
2002
2005
2010 2011 2012 2013

Mar 2013 – Mar 2014
Northern Virginia
-1
0
-1
-1
1
1
3
0
2
6
1
-4
-6
(20.0) (10.0) - 10.0 20.0 30.0
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 800

Feb 2014 – Mar 2014
Northern Virginia
0
0
0
0
0
1
1
3
0
1
0
0
3
(20.0) (10.0) - 10.0 20.0 30.0
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 6,700

0
2
4
6
8
10
12
8.1 – DC
6.7 – U.S.
5.2 – SMD
5.1 – MSA
4.2 - NVA
Unemployment Rates in the WMSA
By Sub-State Area, 2007-2014
Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US – Seasonally Adjusted)

Economic Outlook for the
Washington Metropolitan Area

Washington Metropolitan Area
Gross Regional Product, 2013-2018
(in billions of 2005$s)
Region 2013 Share 2018 Share % Change
Metro $391.2 100.0 $458.8 100.0 17.3
District 92.7 23.7 104.5 22.8 12.7
SubMD 110.3 28.2 129.5 28.2 17.4
NoVA 187.1 47.8 223.5 48.7 19.4
__________________________________________
Source: IHS Global Insight, GMU Center for Regional Analysis
The Washington metropolitan area includes Jefferson County, WV and is included in the total GRP values.

Principal Sources of Job and GRP
Growth in the Washington Area, 2013-2018
(in thousands)
Growth Job % of Total Average Value
Sectors Change Job Change Added per Job*
Prof. & Bus. Ser. 144.5 48.8 $158,211
Construction 51.9 17.5 $91,482
Education/Health 35.2 11.9 $59,938
Hospitality Services 27.1 9.1 $43,036
State and Local 19.6 6.6 $60,099
Retail Trade 13.6 4.6 $60,981
Sub-Total 291.9 98.5 $93,347
Overall Total 296.4 100.0 $135,544
Sources: IHS Global Insight; GMU Center for Regional Analysis * in 2005$s

Job and GRP Gains and Losses for
the Washington Area’s Other Sectors, 2013-2018
(in thousands)
Job % of Total Average Value
Change Job Change Added per Job
Federal Gov’t - 22.8 - 7.7 $141,894
Other Services 2.1 0.7 $102,734
Financial Services - 1.3 - 0.4 $591,253
Information Services 6.3 2.1 $549,993
Manufacturing 1.5 0.5 $103,723
Transportation 9.3 3.1 $133,796
Wholesale Trade 7.3 2.5 $193,924
Sub-Totals 4.5 1.5 $220,696
Overall Total 296.4 100.0 $135,544
Sources: IHS Global Insight; GMU Center for Regional Analysis

-2
-1
0
1
2
3
4
5
6
7
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
%
Source: GMU Center for Regional Analysis
Economic Outlook (GRP), 2001-2018
Washington Area and Sub-State Areas
(Annual % Change)
DC
SM
MSA
NV

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Questions
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Washington DC Regional Economic Analysis April 2014

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