Learn all about the economic outlook from Sage Policy Group, Inc.'s presentation for Citrin Cooperman's October 17 event, Economic Summit: Is Your Business Evolution Ready? Preparing Your Business for Tomorrow’s Economy.
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Is Your Business Evolution Ready? Preparing Your Business for Tomorrow’s Economy
1. By: Anirban Basu
Sage PolicyGroup, Inc.
On Behalfof
Economic Summit
Is Your Business Evolution Ready? Preparing Your Business for
Tomorrow’s Economy
October17th,2019
2. “There is always somechance of
recession in any year. But the evidence
suggests that expansions don't die of old
age.”
–JanetYellen
7. Estimated Growth in Output by Select Global Areas
2019Projected
Source: International MonetaryFund: World Economic Outlook, October 2019
0.9%
0.4%
0.2%
0.9%
6.1%
6.1%
5.9%
1.1%
1.8%
3.2%
3.9%
2.4%
1.7%
1.5%
1.2%
0.9%
2.2%
0.0%
0.5%
1.2%
1.2%
1.7%
-6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Brazil
Mexico
Latin America & the Caribbean
Middle East & Central Asia
India
China
Emerging & Developing Asia
Russia
Emerging & Developing Europe
Sub-Saharan Africa
Emerging Market & Developing Economies
United States
Australia
Canada
United Kingdom
Japan
Spain
Italy
Germany
France
Euro Area
Advanced Economies
Annual % Change
2019 Proj. Global Output Growth: +3.0%
2018 Growth (Estimate)
World: 3.6% Euro Area: 1.9%
United States: 2.9% Japan: 0.8%
8. “Inflation is the oneformof taxation
that can beimposed without
legislation.”
–Milton Friedman
14. National Nonfarm Employment
byIndustry Sector,September2018v.September2019
Source:U.S.BureauofLaborStatistics
1
15
90
99
117
119
147
156
349
437
617
0 100 200 300 400 500 600 700
Mining and Logging
Information
Other Services
Financial Activities
Manufacturing
Trade, Transportation, and Utilities
Government
Construction
Leisure and Hospitality
Professional and Business Services
Education and Health Services
Thousands, SA
All told 2,147K jobs gained
15. U.S. Labor ForceParticipation: Men Ages 25-34
2000–2019
Source:U.S.BureauofLaborStatistics,CurrentPopulationSurvey
88%
89%
90%
91%
92%
93%
94%
2000Q3
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
2017Q3
2018Q1
2018Q3
2019Q1
2019Q3
88.8%
“I wish we questioned the aid model as
much as we are questioning the
capitalism model. Sometimes the most
generous thing you can do is just say no.”
– Dambisa Moyo
18. -2,400
-400
1,200
1,200
1,600
2,500
3,000
6,500
8,900
17,500
-5,000 0 5,000 10,000 15,000 20,000
Trade, Transportation & Utilities
Manufacturing
Mining, Logging, and Construction
Financial Activities
Leisure & Hospitality
Government
Information
Other Services
Professional & Business Services
Education & Health Services
Boston NECTA Total:
+39.6K; +1.4%
MA Total (SA):
+43.6K; +1.2%
US Total (SA):
+2,119K; +1.4%
Boston-Cambridge-NashuaMA-NHNECTA NonfarmEmployment
byIndustrySectorGroups(NSA)
August2018v.August2019AbsoluteChange
Source:U.S.BureauofLaborStatistics
29. Architecture Billings Indexby U.S. Region
August2019
Source:TheAmericanInstituteofArchitects
47.2
51.2
49.1
48.2
46.4
45.0
50.0
55.0
U.S. West Northeast South Midwest
30. National Nonresidential Construction Spending by Subsector
August2014 v.August 2019
Source:U.S.CensusBureau
-25.6%
-13.3%
12.8%
14.6%
14.9%
16.7%
17.4%
20.1%
23.6%
28.1%
34.0%
34.4%
38.6%
65.0%
69.7%
98.7%
-40% -20% 0% 20% 40% 60% 80% 100%
Religious
Power
Health Care
Educational
Highway and Street
Public Safety
Sewage and Waste Disposal
Manufacturing
Commercial
Water Supply
Conservation and Development
Transportation
Communication
Amusement and Recreation
Office
Lodging
5-year % Change
Total Nonresidential
Construction:
+21.1%
31. Foreign Investmentin U.S. Commercial Real Estate
TopDestination Markets,2018
Source:RealCapitalAnalytics
$1.5
$1.6
$1.7
$1.9
$2.1
$4.3
$4.4
$5.2
$7.9
$16.6
$0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0
Phoenix
Philadelphia
San Diego
Miami/South Florida
Seattle
Chicago
San Francisco Bay
Washington
Los Angeles Basin
New York
2018 Deals ($Billions)
32. ForeignInvestmentinU.S. CommercialRealEstatePer 100,000Residents
TopDestination Markets,2018
Source:RealCapitalAnalytics
$26.2
$30.9
$31.7
$44.0
$45.1
$50.9
$54.3
$65.4
$81.7
$83.6
$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0
Philadelphia
Miami/South Florida
Phoenix
Los Angeles
Chicago
San Diego
Seattle
San Francisco
New York
Washington, D.C.
Investment ($M) Per 100,000 Residents
33. CoStarCommercialRepeatSalesIndex
August2000throughAugust2019
Source:Costar*Based on 1,274 repeat sale pairs in August 2019 and more than 215,000 repeat sales since 1996.
0
50
100
150
200
250
300
Aug-00
Feb-01
Aug-01
Feb-02
Aug-02
Feb-03
Aug-03
Feb-04
Aug-04
Feb-05
Aug-05
Feb-06
Aug-06
Feb-07
Aug-07
Feb-08
Aug-08
Feb-09
Aug-09
Feb-10
Aug-10
Feb-11
Aug-11
Feb-12
Aug-12
Feb-13
Aug-13
Feb-14
Aug-14
Feb-15
Aug-15
Feb-16
Aug-16
Feb-17
Aug-17
Feb-18
Aug-18
Feb-19
Aug-19
CCRI: U.S. Composite
34. “An economistis an expertwho will
know tomorrowwhy the things he
predictedyesterdaydidn't happen
today.”
–LaurenceJ. Peter
36. University ofMichigan Index of ConsumerSentiment
2005-2019
Source:UniversityofMichigan
50
60
70
80
90
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
October 2019 = 96.0
where 1996 = 100
37. NFIBIndex ofSmallBusiness Optimism:Good Timeto Expand
1986-2019
Source:NationalFederationofIndependentBusiness(NFIB)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
September 2019:
22%
% of respondents who think the next 3 months will be a good time to for small business to expand
40. Economists do it with
Models
• Much of the negativity
reflected in forecasts and in
financial market volatility
relates to things people
believe will happen;
• But important parts of the
U.S. economy continue to
perform well – e.g.
consumer, corporate
earnings, construction.
• What’s more, there is significant upside
risk. What if the following happens?
Trade deal with China;
Infrastructure spending plan with
revenue sources identified;
Elimination of tariffs on steel,
aluminum, etc. &
Fed stops tightening!!!!
• Hypothesis - 2019 will be decent year
for economy, but if we don’t check
some of these boxes, watch out for ’20!
Global Section: No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. Adam Smith
https://www.epi.org/publication/the-new-gilded-age-income-inequality-in-the-u-s-by-state-metropolitan-area-and-county/
Note: Data are for tax units. Authors' analysis of state-level tax data from Sommeiller (2006) extended to 2015 using state-level data from the Internal Revenue Service SOI Tax Stats (various years), and Piketty and Saez (2012)
U.S. Section: Inflation is the one form of taxation that can be imposed without legislation. Milton Friedman
https://www.federalreserve.gov/releases/g17/current/
Industrial Production & Capacity Utilization: https://fred.stlouisfed.org/graph/?g=mZsa
https://fred.stlouisfed.org/series/INDPRO
https://fred.stlouisfed.org/series/TCU
https://www.federalreserve.gov/releases/g17/current/
Industrial Production & Capacity Utilization: https://fred.stlouisfed.org/graph/?g=mZsa
https://fred.stlouisfed.org/series/TCU
https://fred.stlouisfed.org/series/INDPRO
https://www.bls.gov/jlt/
JTS00000000JOL
US Total Nonfarm (SA): CES0000000001
U.S. Unemployment Rate LNS14000000
LNS11300164Q
Series ID are in excel linked to chart
US Total Nonfarm (SA): CES0000000001
Series ID are in excel linked to chart
US Total Nonfarm (SA): CES0000000001
Series ID are in excel linked to chart
US Total Nonfarm (SA): CES0000000001
NOTE: Could we spruce up the table/change the table colors?
US Total Nonfarm (SA): CES0000000001
SMS01000000000000001
SMS02000000000000001
SMS04000000000000001
SMS05000000000000001
SMS06000000000000001
SMS08000000000000001
SMS09000000000000001
SMS10000000000000001
SMS11000000000000001
SMS12000000000000001
SMS13000000000000001
SMS15000000000000001
SMS16000000000000001
SMS17000000000000001
SMS18000000000000001
SMS19000000000000001
SMS20000000000000001
SMS21000000000000001
SMS22000000000000001
SMS23000000000000001
SMS24000000000000001
SMS25000000000000001
SMS26000000000000001
SMS27000000000000001
SMS28000000000000001
SMS29000000000000001
SMS30000000000000001
SMS31000000000000001
SMS32000000000000001
SMS33000000000000001
SMS34000000000000001
SMS35000000000000001
SMS36000000000000001
SMS37000000000000001
SMS38000000000000001
SMS39000000000000001
SMS40000000000000001
SMS41000000000000001
SMS42000000000000001
SMS44000000000000001
SMS45000000000000001
SMS46000000000000001
SMS47000000000000001
SMS48000000000000001
SMS49000000000000001
SMS50000000000000001
SMS51000000000000001
SMS53000000000000001
SMS54000000000000001
SMS55000000000000001
SMS56000000000000001
NOTE: Could we spruce up the table/change the table colors?
NOTE: Could we spruce up the table/change the table colors?
Please make sure all unemployment rates have the same number of decimals (ex. 8.0 rather than just 8)
http://www.bls.gov/lau/
Tables: Unemployment Rates for Large Metropolitan Areas
CIS1020000000000I
CUSR0000SA0L1E
https://fred.stlouisfed.org/series/PCEPILFE
BEA Table: Table 2.8.4. Price Indexes for Personal Consumption Expenditures by Major Type of Product, Monthly
This graph
https://fred.stlouisfed.org/graph/?g=p0oA
Real Estate/Construction Section: Most men love money and security more, and creation and construction less, as they get older. John Maynard Keynes
Most recent release: https://www.architectmagazine.com/practice/aia-billings-suffer-steep-decline-in-august_o
*Every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values.
http://new.aia.org/press-releases?query=
http://new.aia.org/resources/10046-the-architecture-billings-index
http://www.architectmagazine.com/
Most recent release: https://www.architectmagazine.com/practice/aia-billings-suffer-steep-decline-in-august_o
*Every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values.
http://new.aia.org/press-releases?query=
http://new.aia.org/resources/10046-the-architecture-billings-index
http://www.architectmagazine.com/
**WILL BE REVISED NEXT MONTH/USE EXCEL DOWNLOAD TO GET PAST FIGURES?
*MUST START AT AUGUST 2007
https://www.conference-board.org/data/bcicountry.cfm?cid=1
https://www.conference-board.org/ea/TCB_BE_Portfolio.xls
**February 2018: This month’s release incorporates annual benchmark revisions to the composite economic indexes. The benchmark usually takes place in January but was postponed due to the government shutdown. These regular benchmark revisions bring the indexes up-to-date with revisions in the source data. The revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are incorporated when the benchmark revision is made, and the entire histories of the indexes are recomputed. As a result, the revised indexes and their month-over-month changes will no longer be directly comparable to those issued prior to the benchmark revision. For more information, please visit our website at http://www.conference-board.org/data/bci.cfm or contact indicators@conference-board.org.
**August 2007-May 2017 % changes are based on data released when the base was 2010=100. June 2017-Present % changes are based on data released when the base was 2016=100.
NOTE (CHANGE TO BASE YEAR): ”This month’s release incorporates annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. Also, with this benchmark revision, the base year of the composite indexes was changed to 2016 = 100 from 2010 = 100. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision. For more information, please visit our website at http://www.conference-board.org/data/bci.cfm or contact us at indicators@conference-board.org.”
http://www.sca.isr.umich.edu/
https://www.nfib.com/surveys/small-business-economic-trends/
https://www.nfib.com/assets/SBET-August-2019.pdf
Couldn’t find September full release
*Change the month in the URL to the current month
https://tradingeconomics.com/united-states/nfib-business-optimism-index