Economic Outlook. Connecticut Economic Resource Center, Inc.

Transcription

1 Economic Outlook Alissa DeJonge Vice President of Research January 2018 Connecticut Economic Resource Center, Inc. Private, nonprofit organization; founded in 1992 CERC drives economic development in Connecticut by providing research based data, planning and implementation strategies to foster business formation, recruitment and growth Funded by utility and telecommunication companies, state contracts, and fee based services Provide research, municipal, business, real estate, and marketing services CERC2017 1

2 Presentation Outline Global Trends National Trends Connecticut Effects Global Trends Strengthening Economic Activity as a Whole 2

3 Percentage of World GDP (GDP in Current U.S Dollars) 30.0% 25.0% 27.6% 24.3% 20.0% 15.0% 14.9% 10.0% 5.0% 4.8% 10.0% 5.9% 0.0% Source: World Development Indicators Database, World Bank, Feb, World Output Estimates World U.S Euro Area Canada Japan U.K Emerging Market Source: World Economic Outlook, October China Low income 3

4 National Trends Tax Reform Effects 2016 U.S GDP Components Government Spending 17% Net Exports of Goods and Services 3% Business Investment 15% Personal Consumption Expenditures 65% Source: World Development Indicators Database, World Bank, Feb,

5 U.S Industry Trends Affects How Businesses Anticipate Consumer Demand, Profitability and Competitiveness Property & Casualty Insurance: Adapt Traditional insurance models need to adapt to: Fewer insurable workers due to robotic automation of industrial processes Sharing economy will shift insurance policies more toward commercial Fewer home owners, more renters 5

6 Retail: The Experience Physical stores: Experiences that make the customer feel relaxed and comfortable lead to increases in sales and a clear differentiation from the online experience. Online Stores: In addition to offering faster delivery times, online businesses have formed partnerships with stores for pick-up and return options. 25% of U.S. Malls to Close by 2022 Source: Credit Suisse 6

7 Warehousing Rapid delivery Smaller packages Variety of goods VS. Large number of same goods on pallets Financial Services New trends: User friendly online interface Fewer/no local bankers International expansion Longer-term goals: Enhancing cyber security Responding to breaches in a transparent and customer friendly way 7

8 Manufacturing: Automation A fundamental economic transition Automation and robotic technology becomes more widespread for manufacturing businesses Will cause disruption or displacement of jobs but will also will create approximately 15 million new jobs in the U.S. over the next ten years Construction Slow Growth ADVANTAGES OFFSET BY CHALLENGES Technology advancements: Drones, self driving vehicles, visualization Software and hardware Increased costs in raw materials and labor 8

9 Healthcare The cost of health care and medical procedures continues to grow Major focus of the industry is figuring out ways to reduce costs without compromising quality of care Connecticut Why Millennials Aren t Buying Homes? 9

10 Housing is less affordable for millennials Student debt makes it hard to take on a mortgage loan 10

11 Millennials are spending more on renting... Millennials are more likely to live with their parents 11

12 Connecticut Modest Economic Growth Yet Needs a Boost Top 10 CT Industries Finance, Insurance, Real Estate, Rental and Leasing Percentage of 2016 GDP 27.5% Professional and Business Services Manufacturing Government Educational Services, Health Care and Social Assistance 12.1% 10.9% 10.5% 10.1% Wholesale Trade Retail Trade Information 5.5% 5.1% 6.5% Construction Arts, Entertainment, Recreation,Accommodation and Food Services 3.2% 3.2% Source: Source: U.S. Bureau of Economic Analysis, Nov

13 CT Employment Change Financial Activities Education And Health Services Professional & Business Services Other Services. Construction, Natural Resources & Mining Manufacturing Trade, Transportation, Utilities Leisure And Hospitality Government Information 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 0.5% 1.0% 1.5% 2.0% Source: CT Department of Labor CT Median Household Income $73,000 $72,000 $71,000 $70,000 $69,000 $68,000 $67,000 $66,000 $65, Median Household Income 13

14 CT Per Capita Income $40,500 $40,000 $39,500 $39,000 $38,500 $38,000 $37,500 $37,000 $36,500 $36,000 $35,500 $35, Per capita income CT Resident Population In Thousands 3620 Resident Population in CT Resident Population in CT Source: Federal Reserve Economic Data 14

15 CT Population by Race 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 Two or more races Some other race alone Native Hawaiian and Other Pacific Islander alone Asian alone American Indian and Alaska Native alone Black or African American alone White alone 500, CT Native V.S Foreign Born 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Native Foreign Born 15

16 Components of Population Change Pre and Post recession 50,000 40,000 30,000 20,000 10, ,000 Births Deaths Net International Migration Net Domestic Migration 20,000 30, Average Average Source: Connecticut s Population and Migration Trends: A Multi-Data Source Dive, CT Office of Policy and Management, 2016 CT Population by Age Below and over 7% 7% 7% 7% 7% 7% 7% 28% 28% 29% 29% 30% 30% 31% 33% 33% 33% 32% 32% 31% 31% 32% 32% 32% 31% 31% 31% 31% Source: U.S Census Bureau

17 CT Housing Permit ,500 5,500 4,500 3,500 2,500 1, , Unit 2 4 Unit 5 + Units Demolitions Net Total Source: U.S Census Bureau Housing Unit Vacancy Rates 100% 8% 9% 90% 80% 70% 60% 50% 40% 92% 91% 30% 20% 10% 0% Occupied Vacant 17

18 Budget Situation Continues to Plague the State Uncertainties in state fiscal policies tend to reduce confidence among businesses and consumers Connecticut residents believe that overall business conditions in the state are worsening and will be about the same six months from now Q3 InformCT Consumer Confidence Survey Conclusions Amid Numerous Uncertainties, the Outlook for the Economy in 2018 has Positive Signs Projections for global and national economic growth are positive Estimate for Connecticut s economic performance in 2018 is modest Overall industry trends affecting the competitiveness of businesses all over the nation and globe will also affect how companies do business in the state Any substantial changes in population or employment will affect Connecticut s economy 18

19 Thank You Alissa DeJonge Vice President of Research CERC