Round 9.0 Cooperative Forecast Results and Methods

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1 Round 9.0 Cooperative Forecast Results and Methods By Robert Ruiz, Research Manager and Pamela Zorich, Planner Coordinator

2 Montgomery County, Round 9.0 Cooperative Forecast Participation Round Round Round Round Update Round Round Round 5 - January 1994 Round May 1994 Round Round Round Round 6a 1998 Round Round Round Round Never Adopted Round 6.4A 2004 Round Round 7.0a 2006 Round Round Round 7.2A 2009 Round Round 8.0a 2011 Round Round Round Round

3 Montgomery County, Round 9.0 Cooperative Forecast Participation Maryland: Montgomery County Bowie Charles County College Park Frederick Frederick County Gaithersburg Greenbelt Prince George's County Rockville Takoma Park Virginia: Alexandria Arlington County Fairfax Fairfax County Falls Church Loudoun County Manassas Manassas Park Prince William County District of Columbia

4 Montgomery County, Round 9.0 Cooperative Forecasting Process Regional Econometric Model Projections Employment Population Households Local Forecasts Employment Population Households Reconciliation Regional Forecast Jurisdictional Small Area (TAZ) Source: MWCOG, ROUND 9.0 COOPERATIVE FORECASTS OF FUTURE GROWTH, March 9, 2016.

5 MONTGOMERY COUNTY Population and Household Cooperative Forecasts Round 9.0

6 Population and Household Forecasts Montgomery County, Round 9.0 1,500,000 Population 1,300,000 1,100, , ,000 Households 500, , * Source: MNCPPC, Montgomery County Planning Department, Research & Special Projects Division. Draft Round 9.0 forecasts are subject to change.

7 Regional Comparison, Round 9.0 Cooperative Forecast (MWCOG Draft) Population Fairfax County 1, % Montgomery County 1, % Prince George's County % District of Columbia % Prince William County % Loudoun County % Frederick County Arlington County % 39.6% Charles County % City of Alexandria City of Frederick City of Rockville City Gaithersburg % 32.2% 35.6% 32.4% 2015 Population Absolute Increase City of Manassas % City of Fairfax % City of Manassas Park % City of Falls Church % ,000 1,200 1,400 1,600 (Thousands) Source: MWCOG, ROUND 9.0 COOPERATIVE FORECASTS OF FUTURE GROWTH, March 9, Draft Round 9.0 forecasts are subject to change.

8 Regional Comparison, Round 9.0 Cooperative Forecast (MWCOG Draft) Households Fairfax County % Montgomery County Prince George's County District of Columbia Prince William County Loudoun County Arlington County Frederick County City of Alexandria Charles County City of Frederick City of Rockville City Gaithersburg City of Manassas City of Fairfax % % % % % % % % % 47.6% 60.9% % % 2015 Households Absolute Increase % City of Falls Church % City of Manassas Park % (Thousands) Source: MWCOG, ROUND 9.0 COOPERATIVE FORECASTS OF FUTURE GROWTH, March 9, Draft Round 9.0 forecasts are subject to change.

9 Population Forecast Methodology AGE COHORT-COMPONENT MODEL County Cohort Component Model Projections to 2025 Females NUMBER FEMALES AGE FEMALES SURV RATES AGE SURVIVORS MIGRATION POPULATION INTERVALS (t) IN INTERVALS (t) 2025 RATES 2025 Add BIRTHS , % 35, , , % 32, , , % 33, , , % 32, , , % 30, , , % 41, , , % 42, , , % 38, , , % 37, , , % 36, , , % 36, , , % 35, , , % 34, , , % 31, , , % 26, , , % 20, , , % 13, , , % 12, , TOTALS 551, ,027 Steps in Age Cohort- Component Model: Age cohorts by sex Apply survival rates Age survivors by 5 years Add births Apply migration rates Forecasts age by sex for next 5 years Repeat for 5-year increments until 2045

10 Natural Increase, Largest Component of Montgomery s Population Growth Source: Population Estimates Program, U.S. Census

11 Historical Birth Trends in Montgomery County SOURCE: Vital Statistics Admin, MD Dept. of Health & Mental Hygiene

12 Changing Mix of Residents More Dramatic than Growth MONTGOMERY COUNTY POPULATION MIGRATION TRENDS Source: U.S. Census Bureau Population Estimates Program,

13 Montgomery: Magnet for Foreign Born Foreign born percent of population 342,900 33% 32% % 22% 23% 19% 12% 5% 7% 10% 15% 14% 8% 16% 12% 6% 9% 13% 13% 11% Montgomery County Maryland Washington Region United States Source: U.S. Census, 2010 & 2014 American Community Survey, 1 year estimate

14 Changing Mix of Residents More Dramatic than Growth

15 Thumbprint of the Baby Boomers % of Population Baby Boomers Drive Rise in Age % 25% 20% 15% 10% 5% 0% Percent of Population by Age Group 7% 7% 6% % 19% 19% 19% 19% 19% 18% 15% 14% 24% 28% 24% 11% 14% < Age Group Source: U.S. Census, 2000 Decennial Census; 2014 American Community Survey; draft. 18% Draft Round 9.0 forecasts are subject to change.

16 Household Forecast Methodology HEADSHIP RATES by HOUSEHOLDER AGE Households: Households are calculated by applying a headship rate to the household population by age. The headship rate is the percent of persons in an age group that are householders. The household forecast uses average headship rates from 2005 to 2014 from the U.S. Census Bureau s American Community Survey. Average Headship Rate Headship Age rate 15 to 24 years to 34 years to 44 years to 54 years to 64 years to 74 years and over 0.644

17 Employment Forecast

18 At-Place Employment Employment Forecasts in Context, Montgomery County 1,000, , , , , , , , , , , , , , ,500 A 2010 to 2045 gain of 188,000 jobs or 38% for Round , , Round 5.2 (1994) Round 6.1 (1999) Round 7.0 (2005) Round 8.0 (2009) Round 8.4 (2014) Round 9.0 (2016)

19 Transportation Planning Board Area, Employment (in thousands) Employment Forecasts in Context, COG TPB Region 6, , , , , , , , , , , , , , , , , , , , , Round 8.4 Round 9.0

20 Round 9.0 Employment Forecasts by Jurisdiction Employment District of Columbia Fairfax County Montgomery County Prince George's County Arlington County Loudoun County Prince William County Frederick County City of Alexandria City of Rockville City of Frederick Charles County City Gaithersburg City of Manassas % % % % % % 26.8% 44.3% % 33.3% 75.6% % % 2015 Employment Absolute Increase % City of Fairfax % City of Falls Church % City of Manassas Park % ,000 1,200 Source: MWCOG, ROUND 9.0 COOPERATIVE FORECASTS OF FUTURE GROWTH, March 9, (Thousands)

21 Methodology, Montgomery County Step 1: Calculate an employment base for 2010 Quarterly Census of Employment and Wages (QCEW) at-place employment data from the US Bureau of Labor Statistics (BLS) and the Maryland Department of Labor, Licensing, and Regulation s (DLLR) are used for a portion of the 2010 base. These jobs are covered by Unemployment Insurance (UI).

22 Methodology, Montgomery County Step 1: Calculate an employment base for 2010 Visualization of process to attain total employment:

23 Methodology, Montgomery County Step 1: Calculate an employment base for 2010 Wage and salary jobs not covered by unemployment insurance: a) Factor of applied to covered employment to get total wage and salary jobs (covered + not covered employment). b) factor is unique to Montgomery County and was developed by MWCOG using BLS Current Employment Statistics (CES) and Quarterly Census of Employment and Wages (QCEW) data. c) This category of workers includes persons employed by religious institutions, for example. The Self-Employed: a) Factor of 1.06 applied to calculate the number of self-employed persons b) 1.06 factor is unique to Montgomery County and was developed by MWCOG using the Census Bureau s American Community Survey (ACS) Public Use Microdata Sample (PUMS) files.

24 Methodology, Montgomery County Step 1: Calculate an employment base for 2010 The non-civilian military employment : a) Among sources, includes Department of Defense s (DOD) Base Structure Report: A Summary of the Real Property Inventory reports that tabulates military personnel by base.

25 Methodology, Montgomery County Step 2: Forecast Wage and Salary Jobs Covered by UI The forecast of future wage and salary jobs covered by unemployment insurance (UI) is calculated using shift-share analysis a) What is shift-share method: i. The shift-share method assumes that a local employment industry s growth is affected by its own local industry trends, as well as by that industry s historical and expected regional or national dynamics. ii. The shift-share method includes a shift-term that account[s] for [the] differences between local and reference region growth rates that cause an industry s employment to shift into or out of a region (Klosterman, Community Analysis and Planning Techniques, 1990).

26 Methodology, Montgomery County Step 2: Forecast Wage and Salary Jobs Covered by UI b) What assumptions and inputs were used in the shift-share analysis i. Key assumption is that in the thirty-five year forecast horizon we will have cyclical booms and busts, but that none of these will be as exceptionally prolonged and as deep as the 2007 to 2009 recession. ii. Inputs include employment estimates change by industry at the Montgomery County-level and Transportation Planning Board (TPB) regional-level from 1991 to i. More recent employment data by industry that included the lead up to, and actual, 2007 to 2009 great recession were not used since this recession was assessed to be an anomaly. ii. Inputs also include TPB regional industry forecasts from IHS Global Insight

27 Annual Average Wage and Salary Employment (UI Covered) Methodology, Montgomery County 480,000 Step 2: Forecast Wage and Salary Jobs Covered by UI 464, , , , , , , ,107 Wage and Salary Employment trends are improving: - Avg. Annual Job Growth 91 to 96: 4,325 jobs - Avg. Annual Job Growth 09 to 14: 2,408 jobs Historical growth: - Avg. Annual Job Growth 83 to 87: 22,600 jobs 360, ,000 Recession, 3Q1990 to 1Q1991, 8 months Recession, 1Q2001 to 4Q2001, 8 months Recession, 4Q2007 to 2Q2009, 18 months Payroll Employment (Yearly Avg.) Source: Maryland Department of Labor, Licensing & Regulation. Tabulated by MNCPPC, Montgomery County Planning Department, Research & Special Projects Division.

28 Methodology, Montgomery County Step 2: Forecast Wage and Salary Jobs Covered by UI c) Wage and salary jobs covered by unemployment outputs:

29 Methodology, Montgomery County Step 2: Forecast Wage and Salary Jobs Covered by UI c) Wage and salary jobs covered by unemployment outputs: Employment Change by Sector , Montgomery County Professional and Bus. Services Natural Resources and Mining Information State Government + Local Educational & Health Services Leisure & Hospitality Other Services Financial Activities Trade, Transportation, and Manufacturing Federal Government -5, ,000 1,400 16,400 14,300 20,400 33,300 29,600 35,400-20, ,000 40,000 60,000 61,000 Employment Change by Sector , COG / TPB Planning Area Professional & Business Services Construction, Natural Resources, Information State & Local Government Educational & Health Services Leisure & Hospitality Other Services Financial Activities Transp., Trade, & Utilities Manufacturing-3,488 Federal Government -43,796 91,927 49,022 80,582 82,153 50,178 14,467 8,395 5, , , , , , ,000

30 Methodology, Montgomery County Step 3: Calculate Non UI, Self-Employed, and Military for Future Years Visualization of process to attain total employment:

31 Methodology, Montgomery County Step 4: Reconciliation with MWCOG s Econometric Model Source: MWCOG Department of Community Planning & Services, Round 8.3 Cooperative Forecasts: Process and Review presentation, January 17, 2014.

32 At-Place Employment Share of the MWCOG Econometric Model Methodology, Montgomery County Step 4: Reconciliation with MWCOG s Econometric Model Draft and submitted forecast 800, , , , , , , , , , ,500 Montgomery County s share of Econometric Model 20.0% 19.0% 18.0% 17.0% 16.0% 16.5% 16.5% 15.0% 16.0% 16.1% 16.4% 16.4% 16.4% 16.4% 14.0% 13.0% 12.0% 11.0% 0 2,010 2,015 2, % Round 9.0 Draft Round 9.0

33 Allocation

34 Forecast Allocation of Households, Population, and Employment Allocation of Households, Population, and Employment are done at the Transportation Analysis Zone (TAZ) level. Planning performs allocations for 321 TAZs Rockville and Gaithersburg perform their own allocations

35 Forecast Allocation of Households, Population, and Employment Key Assumptions and Elements Considered Households and Population: Assumptions are made on the percent of housing units that are occupied and vacant. Likewise, assumptions are made on the average number of persons per occupied units. All new households are allocated to new housing Employment: Assumptions are made on the percent of office, retail, and industrial space that is occupied and vacant. Not all office jobs allocated to new construction. Some jobs also allocated to existing vacant space. The self-employed are distributed among residential TAZs

36 Q & A

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