Ted Abernathy's 2012 NC NAIOP State Conference Presentation

1. The State of the
Economic Recovery
2012 NAIOP State Conference
Ted Abernathy
tabernathy@southern.org

2. Trends Changing Our
World
Complexity Demographic Shifts
Technology (Speed) Intensifying Competition
Urbanization Natural Resources
Global Interdependence The Omni Customer
Corporate Integration Changing Institutions
Radical Decentralization The Role of Talent
Specialization Community Resilience

3. “Everyone
has a plan
‘till they
get hit in
the mouth” Mike Tyson

4. The Last Decade Was….Not Good
30% 27%
Employment
22%
25%
20%
20%
15%
10%
5%
0%
-1%
-5%
1970-1980 1980-1990 1990-2000 2000-2010
Source: Peter Linneman, NAI Global

5. The Last Decade Was….Not Good
70% 61% Real HH
60% 47% Income
50%
40%
27%
30%
20%
10%
0%
-10% -3%
-20%
1970-1980 1980-1990 1990-2000 2000-2010
Source: Peter Linneman, NAI Global

6. The Last Decade Was….Not Good
45% 40% 40%
Real GDP
40% 34%
35%
30%
25%
20% 17%
15%
10%
5%
0%
1970-1980 1980-1990 1990-2000 2000-2010
Source: Peter Linneman, NAI Global

7. USA Total Nonfarm Payroll
140,000
In thousands
120,000
100,000
80,000
60,000
40,000
20,000
0
1961 1064 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008
Source: BLS, Jan 2012

8. Unemployment Summary
January 2011
 National Unemployment Rate By
Education
Unemployment rate 13.8%
14%
in January, 8.3%,
12%
down from 9.4% in 10% 8.7%
December 2010 8%
7.7%
 For Whites (7.4%), 6%
4.1%
Blacks (13.6%), 4%
2%
Hispanics (10.5%)
0%
Less than HS Grad Some BA Plus
HS College
Source: BLS Jan 2012

9. Employment Monthly Net
Change 2000- Jan 2012
600
In thousands
400
200
0
-200
-400
-600
-800 2012
2000 2008
Source: BLS Nov 2011

10. US % Employment Change
December 2010-December 2011
3.0% 2.6%
2.5% 2.0%
2.0% 1.6% 1.9%
1.5% 1.2% 1.2%
1.0% 0.8%
0.5% 0.2%
0.0%
-0.5%
-0.6%
-1.0%
Al
Co
M
Tr
Fi
Le
Go
Pr
Ed
an
an
lE
ad
of
is
ns
/H
ve
u
ur
ci
/B
e/
m
ea
tru
rn
fa
al
e/
Tr
us
pl
l th
m
ct
ct
Ho
oy
Se
an
en
ur
Se
io
Se
m
sp
s/
rv
in
t
n
rv
Ut
en
ic
rv
g
i ta
ice
es
il
ic
t
lit
es
s
y
Employees on nonfarm payrolls by state and
selected industry sector, seasonally adjusted Source: BLS, Jan, 2012

11. Total % Manufacturing Employment
Change December 2010-December 2011
2.00% 1.78% The American South
1.80% 1.60% States and Territories
1.50% represent 34.3% of all
1.60%
1.40% US Manufacturing
employment in Dec
1.20%
2011
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
United States American South Non-Southern
States
Employees on nonfarm payrolls by state and
selected industry sector, seasonally adjusted Source: BLS, Jan, 2012

12. Projected USA Job Growth
2012
3% 2.1% 2.3% 2.2%
2.0%
2%
2% 1.1%
1% 0.6%
1%
0%
-1% -0.3%
-1%
-0.9%
-2%
-2%
Construction
Manufact
Trade
Finance/Ins
Prof/Tech
Education/Health
Leisure/Hospitality
Government
Source: Moody’s Analytics, Jan 2012

13. The Stock Market

14. (NATIONAL)

15. The United States in the
Global Economy

16. Trends Changing Our
World
Complexity Demographic Shifts
Technology (Speed) Intensifying Competition
Urbanization Natural Resources
Global Interdependence The Omni Customer
Corporate Integration Changing Institutions
Radical Decentralization The Role of Talent
Specialization Community Resilience

18. Top % GDP Growers in 2012
1) Macau
2) Mongolia
3) Libya
4) Iraq
5) Angola
6) Niger
7) China
8) Ethiopia
9) Rwanda
10) Laos
Source: The Economist, The
World in 2012

19. Global Unemployment Rates
12%
10.7%
9.8%
10%
8.3%
8% 7.6%
6.6%
6% 5.5%
5.2%
4.6%
4.1%
4%
2%
0%
US Japan China Canada Euro Area Australia India Brazil Russia
Source: Economist March 10, 2012

20. Projected GDP Growth 2012
9% 8.2%
6.9%
7%
5%
3.1% 3.3% 3.2%
3% 2.1% 1.7% 2.0%
1%
-1%
-0.6%
-3%
-5%
US Japan China Canada Euro Area Australia India Brazil Russia
Source: Economist March 10, 2012

21. Projected Consumer Prices
2012
9% 8.1%
7% 5.4% 5.7%
5% 3.8%
2.1% 2.1% 2.0% 2.8%
3%
1%
-1% -0.3%
-3%
-5%
US Japan China Canada Euro Area Australia India Brazil Russia
Source: Economist March 10, 2012

22. Impact of the “Great Recession”
Difference in Real GDP/Person 2007-2012
60% 51%
50%
40% 34%
30%
20% 14%
10%
10% 4%
0%
-10% -5% -3% -3% -1%
-20%
United United France Japan Germany Russia Brazil India China
Kingdom States
Source: The Economist, The World in 2012

23. U.S. Exports 2009-2011
$200,000
$180,000 44% Increase
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
2009- 2009- 2009- 2010- 2010- 2011- 2011- Dec
Jan June Nov April Sept Feb July
Exports
Source: BLS Sept 2011

24. NC Exports as a % of GMP-
2010
14% 13.5%
12.0%
12%
10.7%
10%
7.5% 8.1% 8.1% 7.5%
8%
5.7% 5.6%
6%
4.6%
4% 3.4%
2.6%
2% 1.5%
0%
Asheville
Burlington
Charlotte
Durham
Fayetteville
Goldsboro
Greensboro
Greenville
Hickory
Raleigh
Rocky Mount
Wilmington
Winston Salem
Source: US Metro Economies. HIS Insight, Jan 2012

25. Trends Changing Our
World
Complexity Demographic Shifts
Technology (Speed) Intensifying Competition
Urbanization Natural Resources
Global Interdependence The Omni Customer
Corporate Integration Changing Institutions
Radical Decentralization The Role of Talent
Specialization Community Resilience

26. North Carolina in a Global
Economy

27. Southern States 5-Year
Employment Changes
500,000 451,100
Total -1,478,000 lost jobs
300,000
57,000 23,000
100,000
-43,000 -3,600
-100,000 -21,200 -45,900 -59,800 -85,100 -83,700
-114,000 -134,800 -127,200
-300,000 -222,500
-307,000
-500,000
-700,000
-762,300
-900,000
AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV
Source: U.S. BLS, Dec, Measured Nov 2006- Nov 2011

28. Southern States 5-Year
Employment Changes
6%
4.4%
4% 3.0%
1.5%
2%
0%
-0.5%
-2%
-1.8% -2.5% -2.3% -2.2%
-4% -3.8%
-4.4% -4.6%
-6% -4.9%
-5.7% -5.4%
-8% -7.5%
-10% -9.5%
-12%
AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV
Source: U.S. BLS, Dec, Measured Nov 2006- Nov 2011

29. Southern States 1-Year
Employment Changes
250,000
Total +578,300 gained jobs 205,100
200,000
150,000
114,600
100,000
47,400 41,700
50,000 31,800 31,200 35,600
24,700 18,900
6,900 7,700 17,800 10,100
2,700
0
-3,900
-14,000
-50,000
AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV
Source: U.S. BLS, Dec, Measured Dec 2010- Dec 2011

30. Southern States 1-Year
Employment Projections 2012
3%
2.2%
2.0% 2.0%
2% 1.7% 1.8%
1.5% 1.5% 1.4% 1.4%
1.2% 1.2% 1.1%
0.8% 1.0%
1%
0.6%
0%
-0.1%
-1%
AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV
Source: Moody’s Analysis and USA Today Jan 11,2012

32. % Employment Change Last 10
Years 2000-2010
13% 10.6%
7.4%
8%
2.0%
2.3%
3% 1.0%
-2%
-7% -5.9%
-7.0%
-12%
Advantage West Charlotte Eastern Northeast Southeast Piedmont Triad Research
Triangle
Source: NCESC

33. % Employment Growth Last 12
Months Dec 2010- Dec 2011
3%
2.0%
2%
1.4%
2%
1.0%
1%
0.4% 0.5% 0.5%
0.4%
1%
0%
Advantage West Charlotte Eastern Northeast Southeast Piedmont Triad Research
Triangle
Source: NCESC

34. % Unemployment By Region
2000- December 2011
14%
12%
10%
8%
6%
4%
2%
0%
00
01
06
02
03
04
05
07
08
09
10
nt
rre
20
20
20
20
20
20
20
20
20
20
20
Cu
Advantage West Charlotte Eastern
Northeast Southeast Piedmont Triad
Research Triangle
Source: NCESC

35. Regional Comparisons

37. Educational Attainment-%
BA plus
50%
41%
40%
32% 31%
26% 27% 30%
30% 27%
24% 24% 24%
23%
20%
10%
0%
Piedmont Triad
Birmingham
Charlotte
Greenville/Spartan
Jacksonville
Louisville
Memphis
Nashville
VA Beach
Raleigh/Durham
Richmond
Source: US Census, 2009, PTP Research

38. Research Activity
$2,000
In $millions $1,667
$1,500
$1,000
$405
$500
$255 $186 $149 $264
$197 $160
$23 $51 $51
$0
Piedmont Triad
Birmingham
Charlotte
Greenville/Spartan
Jacksonville
Louisville
Memphis
Nashville
VA Beach
Raleigh/Durham
Richmond
Source: NSF, PTP Research

39. Metropolitan GDP Per Capita
2010
$80,000 $70,260
$70,000
$58,607
$60,000
$45,935 $45,386 $45,446
$50,000 $42,619 $42,833
$40,070
$40,861
$44,011
$42,722
$41,990
$38,943
$40,000 $36,331
$33,206
$30,000
$20,000
$10,000
$0
Greensboro/HP
Winston Salem
Birmingham
Charlotte
Greenville
Spartanburg
Jacksonville
Knoxville
Louisville
Memphis
Nashville
VA Beach
Raleigh
Durham
Richmond
Source: BEA, December 2011 Chained 2005 dollars

40. Source: BEA, December 2011
Metropolitan GDP Changes
1.6%
Richmond
6.6%
Durham
5.2%
Raleigh
0.4%
VA Beach
4.6%
Nashville
1.9%
Memphis
3.6%
Louisville
2010
4.2%
Knoxville
2.1%
Jacksonville
3.7%
Spartanburg
3.9% Greenville
2.6%
Charlotte
0.8%
Birmingham
2.4%
Winston Salem
3.9%
Greensboro/HP
8%
7%
6%
5%
4%
3%
2%
1%
0%

41. Source: NCESC
Accom/Food
PTP/RTRP/Charlotte Job
Arts/Enter
Health
Shifts 1990-2010
Education
Prof/Tech
Finance/Ins
Charlotte
Information
Trans/Ware
RTRP
Trade
Manufact
PTP
Construction
Utilities
Government
170%
120%
70%
20%
-30%
-80%

42. Trends Changing Our
World
Complexity Demographic Shifts
Technology (Speed) Intensifying Competition
Urbanization Natural Resources
Global Interdependence The Omni Customer
Corporate Integration Changing Institutions
Radical Decentralization The Role of Talent
Specialization Community Resilience

43. Demographics

44. Growth- Demographics
Between
2010-2020 3 out
of every 4 new
workers in the
USA will be
Latino

45. USA Annual Population
Growth
1.2%
0.97% 0.96% 0.95%
1.0% 0.88%
0.83%
0.8% 0.73%
0.6%
0.4%
0.2%
0.0%
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Source: Brookings Jan 20, 2012

46. Growth
Last decade US
population grew at the
lowest rate since the
great depression

47. Annual Population Growth
3%
3%
2%
2%
1%
1%
0%
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
USA NC SC VA GA
Source: Brookings Jan 20, 2012

48. Annual Population %
Change Rates 2001-2010
5.0%
Raleigh
4.0%
Charlotte
3.0%
2.0%
1.0%
USA
0.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Greensboro Winston-Salem Raleigh Durham
Greenville Spartanburg Charlotte National
Source: U.S. Bureau Intercensal Population Estimates, SYNEVA Economics, Nov 2011

49. 2000-2010 Population Growth
500,000
427,590
411,283
400,000
300,000 278,145
222,846
200,000 161,294
136,127 121,591
107,562 110,896 95,313
75,809
100,000
0
Greensboro&WS
Birmingham
Charlotte
Greenville/Spar
Jacksonville
Louisville
Memphis
Nashville
VA Beach
Raleigh/Dur
Richmond
Source: Proximity, 2012

50. Source: Proximity, 2012
2000-2010 Percentage
15%
Richmond
18%
Population Growth
Durham
42%
Raleigh
6%
VA Beach
21%
Nashville
9%
Memphis
10%
Louisville
20%
Jacksonville
12%
Spartanburg
14%
Greenville
32%
Charlotte
7%
Birmingham
13%
Winston salem
12%
50% Greensboro
40%
30%
20%
10%
0%

51. Growth- Demographics

54. Southern States
5-Year State House Price Index Changes
10% 3.2% 3.3% 3.9%
0%
-0.1% -0.9%
-2.4%
-5.9%
-10% -9.0% -7.8% -10.3%
-10.3% -11.0% -13.6%
-20%
-23.0%
-30% -25.7%
-40%
-44.2%
-50%
AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV
Seasonally Adjusted, purchase only 2011 3Q
Source: Federal Housing Finance Agency, Dec 2011

55. Housing Prices Peak to 3 rd
Qrt. 2011
10%
0%
-10%
-14.8% -14.2% -13.9% -15.3% -14.4%
-20% -16.6%-18.8%
-20.3% -21.5%
-25.8% -25.9%
-30% -29.0%
-40%
-41.7%
-50%
100 Metro
Greensboro/HP
Birmingham
Charlotte
Greenville
Jacksonville
Knoxville
Louisville
Memphis
Nashville
VA Beach
Raleigh
Richmond
Average
Source: Brookings Metro Monitor, Third Quarter 2011

56. Housing Prices
Trough to 3rd Qrt. 2011 Recovery
3%
2%
1.2%
1% 0.4% 0.8% 0.7%
0.6%
0.0% 0.2% 0.0% 0.0% 0.1%
0.0% 0.0% 0.0%
0%
-1%
-2%
-3%
100 Metro
Greensboro/HP
Birmingham
Charlotte
Greenville
Jacksonville
Knoxville
Louisville
Memphis
Nashville
VA Beach
Raleigh
Richmond
Average
Source: Brookings Metro Monitor, Third Quarter 2011

57. Home Prices Forecast 2012
0%
-1%
-2%
-3% -2.8% -3.1% -2.8%
-3.2%
-4% -3.8%
-4.3% -4.4%
-5% -4.5%
-5.3% -5.3%
-6%
-6.1%
-7%
-8% -7.5%
Greensboro
Birmingham
Charlotte
Greenville
Jacksonville
Knoxville
Louisville
Memphis
Nashville
VA Beach
Raleigh
Richmond
Source: Housing Predictor, December 27, 2011

58. Rankings and
Branding

59. Branding- Ranking, Desirable Places for
Doing Business
Number of Listings in 14 Top Rankings
 Milken Institute: Best Performing 8- Austin, Denver, Seattle
Cities
 Brookings: Metro Monitor
7- Raleigh
 CIO: Top 10 Cities for Technology 6- Boston, Charlotte, Dallas, Oklahoma City,
jobs San Antonio
 Forbes: The Best Cities for Jobs 5- Houston, Lincoln, New York, Pittsburg, Salt
 Gigaom: Top 10 Cities with the Best Lake City
Broadband
 Fast Company: Fast Cities of 2011 4- Albuquerque, Anchorage, Baltimore,
 Newgeography: America’s Biggest Bismarck, Bloomington, Boulder, College
Brain Magnets Station, Colorado Springs, Columbia.
 Forbes: Best Places for Businesses Durham, El Paso, Fargo, Huntsville, Little
and Careers Rock, McAllen, Omaha, San Diego
 Relocate America: Top 10 Recovery
Cities 3- Ames, Augusta, Baton Rouge, Bethesda,
 Newgeography: Best 25 Cities for job Buffalo, Charleston, Corpus Christi, Council
Growth Bluffs, Des Moines, Fayetteville,
 Forbes: America’s Most Innovative Fayetteville, Fort Collins, Fort Worth,
Cities Hartford, Honolulu, Iowa City, Jacksonville
 CNNMoney: Best Places to Live NC, Kansas City, Kennewick, Killeen,
 Forbes: Most Wired Cities Lafayette, Las cruces, Lawton, Lexington,
 Area Development: Select Regional Logan, Louisville, Morgantown, Nashville,
Surveys Philadelphia, Provo, Ogden, Sioux Falls, St
Louis, St Joseph, Springfield, VA Beach,
Yakima
Source: Area Development Summer 2011

60. What Is the New
Normal?
“The future is not some place we are going
to, but one we are creating.”
John Schaar

61. 40 Years Ago Alvin Toffler Had a
Few Thoughts
“Is the dizzying
disorientation
brought on by the
premature arrival of
the future, a product
of the greatly
accelerated rate of
change in society.”

62. Elephants and Donkeys and the
Tea Party (and Occupy)
Oh My!

63. “The latent causes of faction
are thus sown in the nature of
man… A zeal for different
opinions concerning religion,
concerning government, and
many other points.”
James Madison, Federalist #10

64. The American Dream
“life should be better and richer
and fuller for everyone, with
opportunity for each according
to ability or achievement,
regardless of social class or
circumstances of birth.”
American Dream, James Truslow Adams, 1931

65. Vision For America
 Take 10 seconds and think about America
in 2050

67. Newsweek Magazine

69. Rising Above the Gathering
Storm, Revisited
 “When I compare our high
schools to what I see when I am
traveling abroad, I’m terrified for
our workforce of tomorrow.”
(Bill Gates)
Source: Members of the Committee, Prepared
for the National Academy of Science, 2010

72. “Whether you believe you can do
a thing or not, you are right.”
Henry Ford

73. Southern Growth’s
40th Anniversary
 Follow us on
FaceBook, Twitter,
LinkedIn, and at
Southern.org
 Join as an Associate
Member
 Starting in January
Commentaries

74. Southern Growth Policies
Board
 Created by Southern Governors in 1971
 Help communities understand the changing
context of competitiveness
 Always looking for members and projects
www.southern.org
Public policy is about making choices, Southern Growth informs choice