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					   Back to the Future

                 On Behalf of
Greater Susquehanna Valley Chamber of Commerce


             By: Anirban Basu
            Sage Policy Group, Inc.

              September 9, 2010
The Big Chill
       Historic and Projected World Output Growth
       2004 through 2011*




Source: International Monetary Fund


                                      *2010-2011 data are projections
      Estimated Growth in Output by Select Global Areas, 2009




Source: International Monetary Fund
      Estimated Growth in Output by Select Global Areas, 2010 Projected




Source: International Monetary Fund
     Top 12 Stock Exchanges
     2008 Growth
    Rank                 Exchange              Index        2008 %
                                                            Change
        3        London SE             FTSE 100                  -31.3%
        1        NYSE Group            DJI A                     -33.8%
       12        Swiss Exchange        Swiss Market              -34.2%
        9        TSX Group             S&P TSX Composite         -35.4%
        2        Nasdaq                NASDAQ Composite          -39.6%
        8        Bolsa De Medrid       Madrid General            -40.0%
        6        Frankfurt SE          DAX                       -40.2%
        4        Tokyo SE              Nikkei 225                -41.5%
        5        Euronext              CAC 40                    -42.6%
       11        Hong Kong Exchanges   Hang Seng Index           -47.9%
       10        Borsa Italiana        MIBTel                    -48.5%
        7        Shanghai SE           Shanghai Composite        -65.4%
Source: Yahoo! Finance
       Top 12 Stock Exchanges
       2009-2010 Growth
                                                                             2009 %     18-month %
Rank            Exchange           Index          Jan-09    Dec-09 Jun-10
                                                                             Change       Change
 11    Hong Kong Exchanges   Hang Seng Index        14448    21873   20129      51.4%        39.3%
  2    Nasdaq                NASDAQ Composite        1579     2269    2109      43.7%        33.6%
  6    Frankfurt SE          DAX                     4587     5957    5966      29.9%        30.1%
  7    Shanghai SE           Shanghai Composite      1849     3277    2398      77.2%        29.7%
  9    TSX Group             S&P TSX Composite       8952    11746   11294      31.2%        26.2%
  1    NYSE Group            DJI A                   8227    10428    9774      26.8%        18.8%
  3    London SE             FTSE 100                4434     5413    4917      22.1%        10.9%
 12    Swiss Exchange        Swiss Market            5529     6546    6128      18.4%        10.8%
  5    Euronext              CAC 40                  3241     3936    3443      21.5%         6.2%
  4    Tokyo SE              Nikkei 225              9043    10546    9383      16.6%         3.8%
 10    Borsa Italiana        FTSE MIB               19460    23248   19312      19.5%        -0.8%
  8    Bolsa De Medrid       Madrid General           980     1242     961      26.7%        -2.0%


Source: Yahoo! Finance
Ferris Bueller’s Day Off
          Recession Watch
          as of May 2009




Source: Moody’s Economy
Gross Domestic Product
1990Q1 through 2010Q2

                                       2008Q3: -0.5%




 Source: Bureau of Economic Analysis
     Recession Watch
     as of April 2010




Source: Moody’s Economy
            Net Change in U.S. Jobs, BLS
            January 2001 through August 2010

                                                                                 8/10:
                                                                                -54k




                                     Between August 2009 and August 2010, the
                                         nation gained 229 thousand jobs.




Source: Bureau of Labor Statistics
         National Nonfarm Employment
         by Industry Sector Groups
         December 2007 v. August 2010



                                     All told 7,640K
                                     Jobs Lost




Source: Bureau of Labor Statistics
           National Nonfarm Employment
           by Industry Sector Groups
           August 2009 v. August 2010




                                         All told 229K Jobs
                                         Gained




Source: Bureau of Labor Statistics
           Professional and Business Services Employment
           by Subsector
            August 2009 v. August 2010




                                                 All told 343K Jobs
                                                 Gained




Source: Bureau of Labor Statistics
      Pennsylvania Nonfarm Employment
      by Industry Sector Groups (SA)
      July 2009 v. July 2010
      Absolute Change




                                        PA Total:
                                        +18.6K: +0.3%
                                        US Total:
                                        +71K; +0.1%




Source: Bureau of Labor Statistics
      Philadelphia MSA Nonfarm Employment
      by Industry Sector Groups (NSA)
      July 2009 v. July 2010
      Absolute Change
                                     Philadelphia Total:
                                     -18.9K; -0.7%
                                     PA Total:
                                     +18.6K: +0.3%
                                     US Total:
                                     +71K; +0.1%




Source: Bureau of Labor Statistics
      Harrisburg-Carlisle MSA Nonfarm Employment
      by Industry Sector Groups (NSA)
      July 2009 v. July 2010
      Absolute Change




                                                   Harrisburg Total :
                                                   -2.3K; -0.7%
                                                   PA Total:
                                                   +18.6K: +0.3%
                                                   US Total:
                                                   +71K; +0.1%




Source: Bureau of Labor Statistics
   Unemployment Rates, Largest 20 Metros(NSA)
   July 2010
Rank MSA                                     UR    Rank MSA                                 UR
     Washington-Arlington-Alexandria, DC-
 1   VA-MD-WV                                6.3   11 St. Louis, MO-IL                      10.1
     Minneapolis-St. Paul-Bloomington, MN-
 2   WI                                      6.8   12 Atlanta-Sandy Springs-Marietta, GA 10.2

   3     Baltimore-Towson, MD                8.2   13 Chicago-Joliet-Naperville, IL-IN-WI   10.5
                                                      San Diego-Carlsbad-San Marcos,
   4     Boston-Cambridge-Quincy, MA-NH      8.4   14 CA                                    10.8
                                                      San Francisco-Oakland-Fremont,
   5     Dallas-Fort Worth-Arlington, TX     8.5   14 CA                                    10.8
                                                      Miami-Fort Lauderdale-Pompano
   6     Seattle-Tacoma-Bellevue, WA         8.6   16 Beach, FL                             12.1
                                                      Tampa-St. Petersburg-Clearwater,
   7     Houston-Sugar Land-Baytown, TX      8.8   17 FL                                    12.3
         New York-Northern New Jersey-Long            Los Angeles-Long Beach-Santa
   8     Island, NY-NJ-PA                    9.1   18 Ana, CA                               12.5
                                                      Riverside-San Bernardino-Ontario,
   8     Phoenix-Mesa-Glendale, AZ           9.1   19 CA                                    15.1
         Philadelphia-Camden-Wilmington,
 10      PA-NJ-DE-MD                         9.7   20 Detroit-Warren-Livonia, MI            15.2
Source: Bureau of Labor Statistics
            Unemployment Rates, U.S. States (SA)
            July 2010
    Rank      State                  Rate   Rank    State          Rate   Rank    State                 Rate

       1     NORTH DAKOTA             3.6    18    ALASKA           7.7     34   NEW JERSEY              9.7
       2     SOUTH DAKOTA             4.4    19    WISCONSIN        7.8     36   DISTRICT OF COLUMBIA    9.8
       3     NEBRASKA                 4.7    20    COLORADO         8.0     36   NORTH CAROLINA          9.8
       4     NEW HAMPSHIRE            5.8    21    MAINE            8.1     36   TENNESSEE               9.8
       5     VERMONT                  6.0    22    NEW MEXICO       8.2     39   GEORGIA                 9.9
       6     HAWAII                   6.3    22    NEW YORK         8.2     39   KENTUCKY                9.9
       7     KANSAS                   6.5    22    TEXAS            8.2     41   INDIANA                 10.2
       8     WYOMING                  6.7    25    DELAWARE         8.4     42   ILLINOIS                10.3
       9     IOWA                     6.8    26    WEST VIRGINIA    8.6     42   OHIO                    10.3
       9     MINNESOTA                6.8    27    IDAHO            8.8     44   OREGON                  10.6
      11     OKLAHOMA                 6.9    28    CONNECTICUT      8.9     45   MISSISSIPPI             10.8
      12     VIRGINIA                 7.0    28    WASHINGTON       8.9     45   SOUTH CAROLINA          10.8
      13     MARYLAND                 7.1    30    MASSACHUSETTS    9.0     47   FLORIDA                 11.5
      14     LOUISIANA                7.2    31    MISSOURI         9.2     48   RHODE ISLAND            11.9
      14     UTAH                     7.2    32    PENNSYLVANIA     9.3     49   CALIFORNIA              12.3
      16     MONTANA                  7.3    33    ARIZONA          9.6     50   MICHIGAN                13.1
      17     ARKANSAS                 7.4    34    ALABAMA          9.7     51   NEVADA                  14.3


Source: Bureau of Labor Statistics


             •U.S. Unemployment Rate: July 10’ =9.5%
  Pennsylvania MSA Unemployment Rates
  July 2010

                                      UE                                       UE
Rank            Metropolitan Area            Rank      Metropolitan Area
                                     Rate                                     Rate
   1       State College, PA           7.0    8     York-Hanover, PA            9.5
                                                    Philadelphia-Camden-
   2       Lebanon, PA                 7.7    10    Wilmington, PA-NJ-DE-MD     9.7
   3       Altoona, PA                 8.1    11    Erie, PA                    9.9
   3       Lancaster, PA               8.1    11    Reading, PA                 9.9
                                                    Allentown-Bethlehem-
   5       Harrisburg-Carlisle, PA     8.4    13    Easton, PA-NJ              10.1
   6       Pittsburgh, PA              8.5    14    Johnstown, PA              10.4
           New York-Northern New
           Jersey-Long Island, NY-                  Scranton--Wilkes-Barre,
   7       NJ-PA                       9.1    14    PA                         10.4
                                                    Youngstown-Warren-
   8       Williamsport, PA            9.5    16    Boardman, OH-PA            11.0

Source: Bureau of Labor Statistics
    Susquehanna Valley Tri-County* Unemployment Rate
    January 2001- July 2010




  Source: Bureau of Labor Statistics


*Includes Northumberland, Snyder, and Union Counties
    Susquehanna Valley Tri-County* Net Employment Change
    January 2001- July 2010




  Source: Bureau of Labor Statistics


*Includes Northumberland, Snyder, and Union Counties
Trading Places
  15-Year & 30-Year Fixed Mortgage Rates
  January 1995 through August 2010




Source: Freddie Mac
U.S. New Home Sales
January 1999 through July 2010




   Source: Economy.com, Census Bureau
     U.S. Housing Starts
     January 1999 through July 2010




Source: Economy.com
     US Modular Home Shipments
     2004Q1-2010Q1

                                                       2010Q1: 2,557 homes shipped
                                                       % Change from 2009Q4: -29.6%
                                                       % Change from 2009Q1: +5.3%




Source: NMHC/Hallahan Associates/ U.S. Census Bureau
     PA Modular Home Shipments
     2004Q1-2010Q1

                                                       2010Q1: 182 homes shipped
                                                       % Change from 2009Q4: -40.9%
                                                       % Change from 2009Q1: +7.1%




Source: NMHC/Hallahan Associates/ U.S. Census Bureau
       Current Hot Metro Housing Markets (150)
       Annual Existing Single-Family Home Price Appreciation
       2009Q2 v. 2010Q2




Source: National Association of Realtors



  U.S.: +1.5% in 2010Q2
       Mortgage Banker’s Association Mortgage Applications
       Purchase Index
       January 2007 – August 23, 2010

                      January 2006 – August 2010      Last 4 Months




Source: Economy.com
  Nonresidential Construction Put-in-Place
  June 2006 through July 2010


                                             Oct. 2008: $719.0 billion
                                             Jul. 2010: $554.6 billion
                                                          -22.8%




Source: U.S. Census Bureau
National Nonresidential Construction Spending by Subsector
July 2010 v. July2009




 Source: U.S. Census Bureau
Warning Sign
Marcellus Shale Formation in Pennsylvania




Source: Marcellus Shale Coalition


 Marcellus Shale is located at a depth if 5,000 to 8,000 feet and is believed to hold
 trillions of cubic feet of natural gas. Advances in new technology and rising natural gas
 prices have attracted new interest in the previously untapped formation.
Pennsylvania DCED’s View on the Potential of Marcellus Shale
   •Potential for significant economic benefit and community growth:
       •It will take local effort to get the most and best economic return:
            •Form and become an active part of a natural gas task force;
                  •Organize the business community;
            •Work cooperatively with gas company officials;
            •Be serious about tracking data;
       •The potential will not last forever as estimates show that Marcellus
       Shale play will last 20, 30 or 40 years:
            •Address gas activity in a local comprehensive plan;
                  •Use land use targeting tools;
                  •Provide help for affordable housing;
            •Develop a long-term asset strategy;
            •Invest in the post-Marcellus economy.


 Source: Pennsylvania Department of Community & Economic Development
Emerald Ash Borer and its Impact on Hardwood Industry
                Pennsylvania Employment in Various Impacted Industries
               Industry                                2001 Employment      2009 Employment
  Logging                                                           1,089                     586
  Wood product                                                     28,234                  20,267
  manufacturing
  Lumber and wood                                                   6,272                   4,998
  merchant wholesalers

  •Emerald Ash Borer, native to China and eastern Asia was first detected in North America in July 2002
  in Michigan and summer of 2007 in Pennsylvania;
  •The beetle poses a serious threat to Pennsylvania’s nation-leading hardwoods industry, which
  contributes nearly $25 billion to the economy;
  •As of July 2010, the beetles have been found in 15 Pennsylvania counties;
  •While the beetle focuses on ash trees, because of the difficulty in distinguishing between species of
  hardwood, all hardwood firewood and wood chips are considered quarantined.

 Source: BLS, Pennsylvania Department of Agriculture
  Map of Counties Quarantined for Emerald Ash Borer




     Source: Pennsylvania Department of Agriculture
The quarantine is designed to help slow the spread of the beetle. Pennsylvania 's quarantine restricts the movement of
ash nursery stock, green lumber and any other ash material, including logs, stumps, roots and branches, and all
wood chips from the quarantined area. Due to the difficulty in distinguishing between species of hardwood firewood,
all hardwood firewood - including ash, oak, maple and hickory - are considered quarantined.
Die Hard
   Conference Board Consumer Expectations Index
   October 2001 through August 2010




Source: Conference Board
U.S. Retail & Food Services Sales
January 2001 through July 2010




      Source: Dismal.com
      U.S. Chain Store Sales Growth by Type of Store
      August 2009 v. August 2010




Source: Economy.com
   Overview of where the $787 billion is going




Source: Recovery.gov
       U.S. Federal Budget Deficit
       1995-2011*




Source: Congressional Budget Office



                                      *2010-2011 data are projections
Projected State Budget Shortfalls for FY 2011
As Percentage of FY 2010 Budget
    Rank                  State                  %       Rank              State    %      Rank              State        %

      1        Nevada                            56.6%   18     Pennsylvania       16.3%    35    Montana                9.3%
      2        New Jersey                        37.4%    19    Utah               15.6%    36    California             9.1%
      3        Illinois                          36.1%    20    New York           15.5%    36    Kansas                 9.1%
      4        Arizona                           35.3%    21    Maryland           15.0%    38    Kentucky               9.1%
      5        Maine                             32.1%    22    Mississippi        14.6%    39    South Dakota           9.0%
      6        Vermont                           31.1%    23    Washington         13.9%    40    Michigan               8.8%
      7        North Carolina                    30.5%    24    Rhode Island       13.2%    41    Massachusetts          8.5%
      8        Connecticut                       29.2%    25    Hawaii             12.9%    42    Alabama                8.2%
      9        Oregon                            29.0%    26    Texas              12.8%    42    Virginia               8.2%
      10       Minnesota                         26.4%    27    Oklahoma           12.4%    44    Wyoming                8.0%
      11       Wisconsin                         25.3%    28    Delaware           11.7%    45    New Mexico             6.0%
      12       Georgia                           24.3%    29    Ohio               11.6%    46    West Virginia          3.5%
      13       New Hampshire                     23.4%    30    Louisiana          11.1%    47    Idaho                  3.3%
      14       South Carolina                    22.6%    31    Tennessee          10.0%    48    District of Columbia   1.7%

      15       Florida                           22.2%    32    Indiana             9.9%

      16       Colorado                          21.2%    33    Nebraska            9.7%

      17       Iowa                              18.6%    34    Missouri            9.3%

Source: Center on Budget and Policy Priorities

•Alaska, Arkansas, and North Dakota are not anticipated to experience short falls in FY 2011.
•Combined gaps of $260 billion for 2011 and 2012. The numbers suggest that when all is said
and done, states will have to deal with total budget shortfalls of some $260 billion for 2011
and 2012 combined.
 Return to Oz
 Stimulus, stimulus, stimulus;          Global economy on the mend
                                          for now;

 We’ve seen the worst of it from a      Construction/real estate
  broader economic perspective;           poised for further downturn;

 Too soon to tell if inflation
  domestically or globally will be       This year represents a year of
  problematic (for now, deflation the     moderate improvement; &
  bigger issue);
                                         2011????
 Other big issues – pensions, aid to
  local government, unemployment
  insurance;
Thank You
 You can always reach me at
  abasu@sagepolicy.com
 If you appreciate this type of information
  and would like regular updates, please see
  our newsletter service at www.spgtrend.com
 Also, if you need us in a hurry, we are at
  410.522.7243 (410.522.SAGE)
 Please contact us when you require
  economic research & policy analysis.

				
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