The STATE of POTOMAC

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The STATE of POTOMAC Powered By Docstoc
					Lead Virginia
The Economies of Northern Virginia and the Commonwealth
John C. McClain, AICP Senior Fellow and Deputy Director Center for Regional Analysis, School of Public Policy George Mason University July 22, 2005

The National Economy

U.S. Gross Domestic Product
% 8 7 6 5 4 3 2 1 0 -1 -2 4.5% 3.7% 0.8% 1.9% 3.0% 4.4%

3.8%

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

1999

2000

2001

2002

2003 2004 2005

Productivity
%
5 4 3 2 1 0 -1
80 19 85 19 90 19 95 19 01 20 04 20
4.9 4.5 4.0

23-yr Avg. = 2.1

Q1 05 = 2.9

Housing Trends: New & Existing Home Sales
(000s)

(000s)

8000 7500 7000 6500 6000 5500 5000

1400 1300 1200 1100 1000 900 800 700

M

M

-0 ay 'M 1

-0 ay 'M 2

-0 ay 'M 3

ay 04

ay 05

Consumer Confidence
200
Peak – Jul 2000

150

100
Expectations

100

50

n Ju

n Ju

1 -0 un 'J

2 -0 un 'J

3 -0 un 'J

4 -0

5 -0

Annual Rate of Change in Jobs - US
Thru Jun 2005
THOUSANDS

5000 4000 3000 2000 1000 0 -1000 -2000 -3000
nJu 99 nJu 00 nJu 01
Bottom – 2.03 M Feb 02 Feb +2.36 M (Highest Rate since Sep 2000)

nJu 02

nJu 03

nJu 04

nJu 05

The Virginia Economy

%

GDP/GSP Trends

7 6 5

Virginia
4 3 2 1 0
19 97 19 98 19 99 20 20 20 20 20 00 01 02 03 04

U.S.

04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19 94 19 93 19 2 9 19 91 19 90 19 89 19 88 19 87 19 86 19 85 19 84 19 83 19 82 19 81 19 80 19

86,900

Virginia Annual Job Change: 1980 - 2004

0

- 22

Average = 61,000/Year

- 67

150

100

50

0

- 14

-50

-100

Year

Virginia and Selected States Job Change May 04 – May 05
Thousands

250 200 150 100 51 50 0 -50 22 19 74 64

237

120

33

-25

Not Seasonally Adjusted

VA

N Y

M A

A G

PA

C A

TX

IL

M I

Virginia and Selected States Job Change May 04 – May 05
Percent

2.5 2 1.5 1 0.5 0 -0.5 -1 -0.6 1.4 0.9 1.1 0.7 0.5 1.6 1.3 0.6

Not Seasonally Adjusted

VA

N Y

M A

A G

PA

C A

TX

IL

M I

Virginia and Selected States Ranked by Unemployment Rate
Percentage

May 2005

9 8 7 6 5 4 3 2 1 0

6.9 4.8 3.6 4.5 5.0 4.7 5.0 5.3 5.6
U.S. 4.9%

Not Seasonally Adjusted

VA

N Y

M A

A G

PA

C A

TX

IL

M I

1999 - 2004 Job Change By Sector - Virginia
(Ranked by Size of Sector)
Prof & Bus Svc St & Loc Govt Retail Ed & Hlth Services Manufacturing Leisure & Hosp Construction Financial Federal Other Svcs Transp & Util Wlse Trade Information

(000s)

Total = 172,000

-80

-60

-40

-20

0

20

40

60

80

May 04 – May 05 Job Change By Sector - Virginia
(Ranked by Size of Sector)
Prof & Bus Svc St & Loc Govt Retail Ed & Hlth Services Manufacturing Leisure & Hosp Construction Financial Federal Other Svcs Transp & Util Wlse Trade Information

(000s)

Total = 51,000

-10

-5

0

5

10

15

20

The Importance of Federal Spending to the Virginia Economy

Total Federal Spending in Virginia
Billions Current $

90 80 70 60 50 40 30 20 10 0

02-03 Change = +7.9B$, 9.6%

Average Annual Increase = 6.5% Total into VA Economy = $768 Bil.

19 19 19 19 19 19 19 19 19 19 20 20 20 20 90 91 92 93 94 95 96 97 98 99 00 01 02 03

Federal Spending by Type Virginia
Billions Current $

40 30 20 10
All Other

0
03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19 94 19 93 19 92 19 91 19 90 19

Total Federal Spending in Virginia by Area
Billions Current $

40
No. Virginia

30
Rest of State

20
Hampton Rds

10 0
03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19 94 19 93 19 92 19 91 19 90 19

Federal Procurement in Virginia
Billions Current $

40 30 20 10 0
19 90 19 92 19 94 19 96 19 98 20 00

Hampton Rest of State

20 02

The Northern Virginia Economy

Northern Virginia Jurisdictions
Arlington Alexandria Fairfax Prince William Loudoun Stafford Spotsylvania Fauquier Clarke Warren 2004 Population 186,100 128,200 1,003,200 336,600 239,200 114,800 111,900 63,300 13,900 34,400

Washington Metro Annual Job Change: 1980 - 2005
120 100
79,900*
Average = 53,400/Year

80 60 40 20 0 -20 -40 -60
*Annual average based on first 5 months
05 20 4 0 20 3 0 20 2 0 20 1 0 20 0 0 20 9 9 19 8 9 19 7 9 19 6 9 19 5 9 19 4 9 19 3 9 19 2 9 19 1 9 19 0 9 19 9 8 19 8 8 19 7 8 19 6 8 19 5 8 19 4 8 19 3 8 19 2 8 19 1 8 19 0 8 19

Year

Metro Comparisons Job Change Last Five Years
15 Largest Metro Areas
WASHINGTON
Miam i Phoenix

287 191 150 144 103 88 86 42 36 36 32 -22 -72 -88 -103 -109 -50 Thousands 50 150 250

No. Virginia
Los Angeles New York Houston Philadelphia Minneapolis Atlanta Dallas Seattle Boston SF-Oakland Detroit Chicago

-150

15 Largest Job Markets Job Change May 2004 – May 2005

Washington +79,100

VA NO tle at Se x ni oe is ol Ph ap ne d in n M la ak -O SF it tro De a nt la At n to us Ho i m ia M on st Bo s lla hia Da lp de ila Ph

No. Virginia + 49,100

Thousands

o ag s ic le Ch ge An s rk Yo Lo w Ne

150

100

-50 50 0

15 Largest Job Markets Ranked by Unemployment Rate
March 2005
%

9 8 7 6 5 4 3 2 1 0

U.S. 5.4%

3.6 2.4

o Ph

M ix

it ro et D go ca hi C on st ou H s la a al hi D lp de ila es Ph gel An s Lo tle at nd Se la ak -O SF a nt la At on st Bo rk Yo ew N i m ia lis po
Data not seasonally adjusted

M

a ne in

en

Share of Washington Area Jobs: 1970-2005
50%

No. Virginia
45% 40% 35% 30% 25% 20%

Sub MD District
19 70 19 75 19 80 19 85 19 90 19 95 20 00 20 05

Year

Northern Virginia’s Share of Virginia Jobs: 1990-2005
60% 55%
50.0% 54.0% 46.0% 46.0% Total P&BS

50% 45% 40% 35% 30% 25% 20%

34.8% 32.4% 29.2% 29.7%

19 90

19 95

20 00

20 05

Year

1999 - 2004 Job Change By Sector Northern Virginia
(Ranked by Size of Sector)
Prof & Bus Svc St & Loc Govt Retail Ed & Hlth Services Manufacturing Leisure & Hosp Construction Financial Federal Other Svcs Transp & Util Wlse Trade Information

(000s)

Total = 144,200

-80

-60

-40

-20

0

20

40

60

80

May 04 – May 05 Job Change By Sector – No VA
(000s)
(Ranked by Size of Sector)
Prof & Bus Svc Federal Educ & Hlth Svc St & Loc Gov Retail Trade Leisure & Hosp Const Other Svc Financial Information Mfg Wlse Trade Transp & Util

Total = 49,100
13.1

2.5 5.0 2.9 7.0 6.1 4.9 3.0 2.2 -0.9 0.2 1.0 2.1

-5

0

5

10

15

The Importance of Federal Spending to the Northern Virginia Economy

Total Federal Spending Washington Metro Area
120 100 80 60 40 20 0
83 19 86 19 89 19 92 19 95 19 98 19 01 20 04 20

$ Billions

2004 = $107.4 B

Federal Spending by Type 1983 - 2003
50 40 30
Wages & Salaries
Billions Current $

20
All Other

10 0

03 20 01 20 99 19 97 19 95 19 93 19 91 19 89 19 87 19 85 19 83 19

Annual Change in Federal Procurement Spending Washington Metro Area $ Billions
8 7 6 5 4 3 2 1 0
19 80 19 83 19 86 19 89 19 92 19 95 19 98 20 01 20 04

2004 = + $7.8B 6.1

2003-2004 Federal Procurement Spending by Sub-state Area
($$ in Billions)
$ Billions

30 25 20 15 10 5 0
11.1 12.9 9.0 10.7 22.2

26.4

03 04

D.C.
+ 16.3%

Suburban Maryland +19.1%

Northern Virginia +19.1%

Federal Procurement and Jobs ( $1 billion = 7,000 jobs)
• In FY 2004, Federal Procurement in Northern Virginia was $26.4 Billion which translates into 185,000 jobs

• Growth from FY 2003 to FY 2004 was $4.24 Billion = growth of 30,000 jobs

The Outlook for 2005+

%

GDP/GSP/GRP Outlook

7 6 5 4 3 2

No. Virginia
Virginia

U.S.
1 0
20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09

Job Change in Virginia And Northern Virginia
Virginia Northern Virginia

Annual Average 94-04 2003 2004 2005 2006 2007

58,000

33,400

2,700 86,900 97,000 85,000 75,000

12,800 53,500 52,000 48,000 44,000

Wild Cards / Threats to Northern Virginia Economy
• National Economic Slowdown • Terrorism • Transportation Infrastructure • Workforce • Housing Affordability • BRAC

What is Happening in the Housing Market?
• Nationally – Low mortgage interest rates • Job growth creates demand • Housing supply constrained by collective planning and zoning policies of the local governments

Housing Price Index Virginia
4th Quarter Each Year

200 180 160 140 120 100 80 60 40 20 0

1995 Q1=100
1997-2004 = 77.8%

1990-1997 =+11.8%

Source: Office of Federal Housing Enterprise Oversight, GMU Center for Regional Analysis

77 19

80 19

83 19

86 19

89 19

92 19

95 19

98 19

01 20

04 20

Housing Price Index Annual % Change Virginia
4th Quarter Each Year

1995 Q1=100

25
27-Yr Average (compound rate) = 5.89%

20 15 10 5 0

77 19

80 19

83 19

86 19

89 19

92 19

95 19

98 19

01 20

04 20

-5

Source: Federal Office of Housing Enterprise Oversight, GMU Center for Regional Analysis

Average Sales Price Existing Houses Northern Virginia
$$ Thousands

500 400
+11.9% +13.9% +13.4%

+21.3%

+ 125% Since ‘98 468 +17.6%

398

328

300 208 200 100 0

+3.8%

+5.1%

216

227

254

288

Source: MRIS, GMU Center for Regional Analysis

98 19

99 19

00 20

01 20

2005 = Jan-Jun

02 20

03 20

04 20

05 20

Percent

% of Houses Sold by Price Range 1999 vs. 2004 All Units Northern Virginia
68.2 59.6

75

50

36.6
25

1999 2004

21.3 10.5 3.8

0 < $200K $200K - $500K > $500K
Source: MRIS, GMU Center for Regional Analysis

Days

Average Days on Market Existing Houses Washington MSA & No Virginia
102

120 100 80 60 40 20 0 1998

27
1999 2000 2001 2002 2003 2004 2005

Source: MRIS, GMU Center for Regional Analysis

2005 Base Realignment and Closure Commission Recommendations
• Job Losses in Arlington, Alexandria and Fairfax: leased space/DOD Security Regs • Potential Employee Relocations • Redevelopment • Longer-term…decentralization?

www.cra-gmu.org


				
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