CENTER FOR BUSINESS AND POLICY RESEARCH. Fall California & Metro UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

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1 CENTER FOR BUSINESS AND POLICY RESEARCH Fall 2016 California & Metro UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

2 CENTER FOR BUSINESS AND POLICY RESEARCH Del Norte Siskiyou Modoc Humboldt Trinity Shasta Lassen Tehama Plumas Mendocino Glenn Butte Sierra Nevada Lake Colusa Sutter Yuba Placer Sonoma San Francisco Marin San Mateo Napa Yolo Solano Contra Costa Alameda Santa Clara Sacramento San Joaquin El Dorado Amador Stanislaus Calaveras Merced Alpine Tuolumne Mariposa Madera Mono Santa Cruz San Benito Fresno Inyo Monterey Kings Tulare California & Metro Forecast is published by the Center for Business and Policy Research University of the Pacific Eberhardt School of Business San Luis Obispo Kern San Bernardino Santa Barbara Web Stockton Sacramento Pacific.edu/CBPR Ventura Los Angeles Staff Dr. Jeffrey A. Michael, Director Dr. Thomas Pogue, Associate Director Nahila Ahsan, Research Analyst Jesse Neumann, Economic Research Analyst Neriah Howard, Student Researcher Anjul Shingal, Student Researcher Sydney Stanfill, Student Researcher Santa Barbara Ventura Santa Barbara Los Angeles Orange San Diego Riverside Imperial UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

3 California & Metro Fall 2016 October 4, 2016 Published quarterly by the Center for Business and Policy Research at the University of the Pacific Eberhardt School of Business. Copyright 2016 Center for Business and Policy Research. All rights reserved. This forecast was prepared based upon assumptions reflecting the Center s judgments as of the date it bears. Actual results could vary materially from the forecast. Neither the Center for Business and Policy Research nor The Regents of the University of the Pacific shall be held responsible as a consequence of any such variance. Unless approved by the Center for Business and Policy Research, the publication or distribution of this forecast and the preparation, publication, or distribution of any excerpts from this forecast are prohibited.

4 Contents California Highlights... 5 Forecast Summary California Forecast Tables California Forecast Charts Fresno MSA Merced MSA Modesto MSA Oakland MSA Sacramento MSA San Francisco MSA San Jose MSA Stockton MSA

5 FORECAST HIGHLIGHTS Highlights of the Fall 2016 California Forecast California is forecast to experience relatively steady growth in real gross state product, averaging 2.5% growth through The California unemployment rate has reached its low point in this cycle and is projected to stabilize between 5.5% and 6% over the next four years. Nonfarm payroll jobs continue to grow at a solid 2.6% statewide after exceeding 3% in the previous three years. Nonfarm payroll growth is projected to drop below 2% in 2017 and settle towards a consistent 1% growth rate in 2018 and beyond. Health Services has become the largest employment sector in the state and is projected to add an additional 50,000 positions over the next 12 months, slightly less than the 65,000 jobs added in the past 12 months. Professional Scientific & Technical Services is a high-paying sector that has fueled the recovery. Growth in this sector will slow to about 25,000 jobs over the next year compared to over 50,000 in some recent years as Silicon Valley growth cools. Growing tourism and a gradual shift in consumer spending from retail to restaurants has fueled rapid growth in the Leisure & Hospitality sector. However, this sector s growth is slowing to 30,000 new jobs over the next 12 months and will cool further to 15,000 new jobs each year as the higher minimum wages lead to slower hiring. State and local government employment will be one of the slowest growing sectors, projected at 1% or less job growth over the next several years as state and local governments grapple with slower revenue growth and rising pension costs. State and local government payrolls in California have still not recovered to their pre-recession level. About 35,000 new Construction jobs are anticipated in each of the next three years, just below a 4% annual growth rate. Despite this expected growth, there will still be fewer Construction jobs in 2020 than before the recession. Single-family housing starts are growing slowly and are projected to just eke over 50,000 units in We project a much more substantial increase to 77,000 units in 2017 as the state s growing housing shortage finally spurs interest in new homes. Multi-family housing starts have surpassed pre-recession levels, but growth has stalled in recent months and 2016 is on track to be similar to the 45,000 multifamily units produced in We expect multi-family growth to resume in 2017 and exceed 60,000 units by Center for Business and Policy Research 5

6 FORECAST SUMMARY California Outlook The California economy is maintaining steady growth as the election is about five weeks away. The unemployment rate is about 5.5% and is not projected to drop any further in this cycle. We project the unemployment rate will slowly drift upwards towards 6% over the next few years as labor force growth picks up to match or slightly exceed projected employment growth. California has continued to add jobs at an over 2% pace throughout 2016, but we expect job growth will slowly recede to a 1% pace over the next two years. Solid job growth is fueling increased demand for housing across California. Both rents and home prices are growing at about a 10% pace in most areas of California, including inland markets such as Sacramento, which is somewhat faster than we had projected. Construction of new homes and apartments continues to recover from the recession but has grown more slowly than we have forecast. This weak growth in housing supply is contributing to rising housing costs, and over the next few years is likely to lead to somewhat slower economic growth in California over the long-run. In the near-term, we expect this continued strong demand for housing will drive a significant increase in construction activity in 2017 and New housing starts are now projected to come in under 100,000 units for 2016, but we expect new housing starts to exceed 125,000 units in 2017 and surpass 150,000 units in 2019 and Even this much higher level of production will not cause housing prices to decline in a state that is projected to add nearly 400,000 new residents per year. While the state s economy has not yielded too many changes of late, the economic policy environment has been full of surprises. This past spring the state of California increased the state minimum wage to $15 by 2022, nearly doubling in less than eight years (the minimum wage was $8 per hour until July 2014, and is currently at $10). A few months later, the Republican nomination for President went to someone who centers their economic policy on protectionism and openly threatens trade wars with the primary trading partners of the U.S. In addition to the Presidential election, California s ballot includes 17 statewide voter initiatives, several of which could have important economic consequences, and a number Table 1. California Annual Forecast Summary Real Gross State Product (% change) Non-Farm Payroll Employment (% change) Unemployment Rate (%) Housing Starts (thousands) California & Metro Forecast Fall 2016

7 FORECAST SUMMARY of local tax measures, often for transportation. While there are scores of important state and local elections, the next few paragraphs briefly discuss the Presidential election and a few of the voter initiatives with potentially significant economic consequences in the near to medium term. PRESIDENTIAL ELECTION A Hillary Clinton presidency is expected to continue the incremental advance of economic policies endorsed by President Obama. She has proposed raising the national minimum wage, increased spending on infrastructure and early childhood education, and free public college tuition. To raise revenue to support this new spending, she proposes to increase income taxes by limiting itemized deductions, higher tax rates on those with incomes over $5 million annually, and increase estate taxes. Clinton s economic policy would invest in areas that would have substantial long-run benefits for the U.S. economy, but tax increases could reduce growth in the near term. It is uncertain how much of this agenda would be implemented, and a Clinton election is unlikely to have major impact on the economic forecast. If Donald Trump is elected, the near term economic effects are highly uncertain. If he were to follow through on promises to impose tariffs on certain imported goods, threaten leaving the World Trade Organization, and restrict immigration, a Trump presidency would have negative effects on both the U.S. and global economy. However, other parts of Donald Trump s proposals could stimulate the U.S. economy in the near-term and he is likely to want to do what he can to give the economy an immediate boost so that voters can feel the effect of his election. For example, he proposes a large tax cut, an even larger investment in infrastructure than Clinton, increased military spending without any offsetting proposals to significantly reduce government spending in other areas. If Congress were to go along with these elements of the plan, the economy would receive a near-term jolt from increased deficit spending while the federal debt would grow substantially over time. While stimulative in the short-run, the increase to the deficit will create long-run problems for the U.S. economy, especially considering that the current deficit is already very high by historic standards. Overall, the near-term economic effects of a Trump presidency are highly uncertain between the effects of global instability and domestic stimulus. However, the long-term economic effects of his approach are seen as negative in the view of most economists. While polls show slightly more voters trust Donald Trump over Hillary Clinton to manage the economy, no modern Presidential candidate has received less support from professional economists than Trump. Leading Republican economists who have consistently served as advisors to Republican Presidents, such as Martin Feldstein and Greg Mankiw, have publicly denounced Trump s economic platform. Trump placed third behind Clinton and Libertarian Gary Johnson in a poll of the National Association of Business Economists. The Economist magazine lists his potential election as one of the top threats to the global economy. Trump certainly did not win over economists during the first Presidential debate when he criticized highly-respected Fed Chair Janet Yellen for playing politics with interest rates, raising concerns that he could try to reduce the independence of the Federal Reserve. SELECTED CALIFORNIA PROPOSITIONS As mentioned previously, there are 17 propositions on the California ballot. The four highlighted below are likely to have the largest economic effects over the next few years. The discussion of potential economic effects should not be interpreted as taking a position in favor or opposition of any of these Propositions. Some Propositions not on this list, including one requiring a public vote on large Center for Business and Policy Research 7

8 FORECAST SUMMARY revenue bonds, continuing a hospital fee, and an increase to the cigarette tax could also affect billions of dollars of economic activity over time, but we do not believe they will have as large economic impacts in the near term. Prop 51: $9 billion School Bond The Governor opposes this bond and like many opponents would like to see a new system for allocating school construction funds that prioritize lower-income communities and puts most of the cost of new schools on new development. The current and historic system of allocating bond funds requires matching local funds and thus is thought to favor districts with new development or that pass local parcel taxes to generate the local cost share. There are many local school tax measures on the November ballot, in large part motivated by Proposition 51. With funds from the 2006 school bond mostly exhausted, development fees could double. Fees could increase by $4 to $6 per square foot in most areas, or $10,000 on a 2,000 square foot house if Proposition 51 fails. At this point, Proposition 51 appears to be leading in the polls. However, if it fails, we will likely revise down our projected increase in housing starts for Prop 55: 12 year Extension of Income Tax Increase on High Earners In 2012, California voters approved a tax increase on incomes over $250,000 per year and a small sales tax increase that would begin phasing out in This proposition would allow the sales tax increase to expire, but would extend the tax rate increase on high-earners through the year Since 2012, California has the highest income tax rates in the nation on households with over a million dollars in annual income, and this proposition would make that temporary measure effectively permanent. Since the 2012 increase is authorized for a few more years, failure would not have immediate economic effects but would put tax policy at the center of the 2018 election for a Governor to replace Jerry Brown. While the tax increase did not cause an out-migration of high-earners from California as some opponents predicted, any expected economic response to a marginal tax rate increase would only be expected over time. A long-term extension of state income taxes that top out at 13.3%, about double the top rate in most states, could further solidify California s reputation for a poor business climate and perpetuates the problem of highlyvolatile tax revenue strongly impacted by investment income. The tax increase has been credited with stabilizing the state budget and restoring education funding that had slipped behind most other states, while targeting the tax increase on high earners who have seen the largest income gains. Prop 61: Drug Prices This is the most expensive campaign, highlighting its economic significance to the pharmaceutical industry. With drug price increases by the pharmaceutical industry receiving a lot of negative press, an initiative promising to limit drug costs even if it only applies to certain government programs is expected to be politically popular. While the direct effect of the proposal is to lower drug prices for certain state programs by linking them to the low negotiated rates of the Veterans Administration (VA), there could be variety of unintended consequences that are typical of efforts to adjust prices through laws and policy. For example, the industry could refuse to supply certain drugs at the mandated price and negotiated prices with the VA could change since it would now be setting prices by proxy for other programs. With billions of spending every year on prescription drugs in the balance, Prop 61 would have significant economic effects if passed. 8 California & Metro Forecast Fall 2016

9 FORECAST SUMMARY Prop 64. Marijuana Legalization The implications of Proposition 64 are far reaching, encompassing criminal justice, health, economics and more. Economically, Proposition 64 would have significant effects, creating a new multibillion industry and unleashing a large amount of investment in new enterprises. Since illegal marijuana is already a multi-billion dollar business, it might seem the economic effects would be small. However, the legalization would likely lead to some increase in demand and more importantly would result in substantial new investment as enterprises positioned themselves to take advantage of a new and restructured industry. Marijuana production could shift from rural areas where the advantage is the ability to hide from enforcement authorities, to moderate cost urban areas in inland California with better access to markets. However, Proposition 64 allows local governments to regulate or even ban marijuana related businesses, so the structure of the economic change in California will critically depend on the reaction of local governments. Some of the largest job gains are likely to occur in processing of marijuana related products, and these new manufacturing jobs would have to be located in California since products could not be transported across state lines. Legalization will not eliminate the illegal industry in California, as the state is expected to remain a major exporter of marijuana to other states where it remains illegal. Disclosure: CBPR has been studying the economic impact of this potential new industry for an investment firm supporting legalization, and will release the results of that study in the next few weeks. THE REGIONAL OUTLOOK The long predicted Bay Area slow down is occurring slower than expected. The San Jose and San Francisco areas continue to lead the state s employment growth, although it has cooled from an over 4% annual pace to a still vibrant 3.5% growth in 2016, about a full percentage point more than we predicted a year ago. This slow-down should continue as venture capital investment is declining, and extreme housing costs will deter the migration of talent to the area, causing some residents and companies to question their longrun future in the region. Despite these challenges, the dynamic Bay Area economy should continue to grow jobs faster than the California average and attract significant investment and people to its dynamic entrepreneurial culture and unique quality of life. We expect a gradual slowdown to 2.3% job growth in 2017, followed by a gradual path to 1% job growth in 2019 and beyond as unemployment stabilizes just over 3%. The Fresno area continues to see steady growth with the unemployment rate stabilizing just under 10%, a high number by any national comparison, but relatively good for this agriculture centered economy where double-digit unemployment is a historical norm. The outward force of the Bay Area economy will result in the Stockton MSA continuing to have the fastest economic growth of inland regions as it is closest to the Bay Area. Employment growth is on track for a 3.7% gain in 2016 and is projected to remain above 3% in San Joaquin County for 2017, the fastest of all Northern California metro areas. In particular, the southern tier of San Joaquin County (Tracy, Manteca, Lathrop) is being fueled by rapid job growth in transportation and distribution, rising incomes for Bay Area commuters, increasing demand for housing that is restarting long-dormant new construction. The data show Modesto and Merced are also growing employment at an over 3% rate for 2016, but we feel this preliminary employment data for 2016 may be slightly overstating growth in the other North San Joaquin Valley counties at the moment and therefore have decreased our 2017 job growth forecast to below 2% growth to compensate. Center for Business and Policy Research 9

10 FORECAST SUMMARY As the long-anticipated Golden One Center opens in downtown Sacramento, the private sector in the capital region is showing signs of life while employment growth in its foundational public sector slows. However, public sector salaries are rising again in Sacramento even as slow state employment growth results in overall job growth in the Sacramento area lagging behind most inland regions. While the slowest to recover, we are still optimistic about the future of the Sacramento economy, and expect that it will retain more stable growth as some surrounding economies slow-down in the coming years and private sector employment opportunities in the Sacramento area continue to expand. Table 2. Central Valley Metro Forecast Summary Metro Area Non-farm Payroll Employment (% change) Unemployment Rate (%) Sacramento Stockton Modesto Merced Fresno California NOTE: Sacramento MSA includes Sacramento, El Dorado, Placer, and Yolo Counties. Stockton, Merced, Fresno and Modesto MSAs correspond to San Joaquin, Merced, Fresno and Stanislaus Counties. Table 3. Bay Area Metro Forecast Summary Metro Area Non-farm Payroll Employment (% change) Unemployment Rate (%) San Francisco San Jose Oakland California NOTE: San Francisco MSA includes San Francisco and San Mateo counties. Oakland MSA includes Contra Costa and Alameda Counties. San Jose MSA includes Santa Clara and San Benito Counties. 10 California & Metro Forecast Fall 2016

11 CALIFORNIA TABLES Table 1. Annual Summary Personal Income and Gross State Product Personal Income (Bil. $) Calif. (%Ch) Gross State Product (Bil. $) Calif. (%Ch) Real GSP (Bil. 2009$) Calif. (%Ch) Employment and Labor Force (Household Survey % Change) Employment Labor Force CA Unemployment Rate (%) Nonfarm Employment (Payroll Survey % Change) Total nonfarm California Mining Construction Manufacturing Nondurable Goods Durable Goods Trans. Warehs. & Utility Wholesale Trade Retail Trade Financial Activities Prof. and Business Services Edu & Health Services Leisure & Hospitality Information Federal Gov't State & Local Gov't Other Indicators Population (thous) (%Ch) Housing Starts Tot. Private (Annual Rate, Ths.) Housing Starts Single Family Housing Starts Multi-Family New Passenger Car & Truck Registrations Retail Sales (Billions $) Center for Business and Policy Research 11

12 CALIFORNIA TABLES Table 2. Quarterly Summary 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income and Gross State Product Personal Income (Annual Rate, Bil. $) Calif. (%Ch) Gross State Product (Bil. $) Calif. (%Ch) Real GSP (Bil. 2009$) Calif. (%Ch) Employment and Labor Force (Household Survey % Change) Employment Labor Force CA Unemployment Rate (%) Nonfarm Employment (Payroll Survey % Change) Total nonfarm California Mining Construction Manufacturing Nondurable Goods Durable Goods Trans. Warehs. & Utility Wholesale Trade Retail Trade Financial Activities Prof. and Business Services Edu & Health Services Leisure & Hospitality Information Federal Gov't State & Local Gov't Other Indicators Population (thous) (%Ch) Housing Starts Tot. Private (Annual Rate, Ths.) Housing Starts Single Family Housing Starts Multi-Family New Passenger Car & Truck Registrations Retail Sales (Billions $) California & Metro Forecast Fall 2016

13 CALIFORNIA TABLES Table 2. Quarterly Summary 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income and Gross State Product Personal Income (Bil. $) Calif. (%Ch) Gross State Product (Bil. $) Calif. (%Ch) Real GSP (Bil. 2009$) Calif. (%Ch) Employment and Labor Force (Household Survey % Change) Employment Labor Force CA Unemployment Rate (%) Nonfarm Employment (Payroll Survey % Change) Total nonfarm California Mining Construction Manufacturing Nondurable Goods Durable Goods Trans. Warehs. & Utility Wholesale Trade Retail Trade Financial Activities Prof. and Business Services Edu & Health Services Leisure & Hospitality Information Federal Gov't State & Local Gov't Other Indicators Population (thous) (%Ch) Housing Starts Tot. Private (Annual Rate, Ths.) Housing Starts Single Family Housing Starts Multi-Family New Passenger Car & Truck Registrations Retail Sales (Billions $) Center for Business and Policy Research 13

14 CALIFORNIA TABLES Table 3. Employment Quarterly 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 California Payroll Employment (Thousands) Total Nonfarm Manufacturing Durable Goods Wood Products Computer & Electronics Transportation Equipment Nondurables Foods Non-Manufacturing Mining Construction Transportation, Warehouse & Util Wholesale Trade Retail Trade Information Prof. & Bus. Services Admin. & Support Prof. Sci. & Tech Mgmt. of Co Financial Activities Real Estate & Rent Finance & Insurance Education & Health Service Education Services Health Services Leisure & Hospitality Other Services Government Federal Gov't State & Local Gov't California & Metro Forecast Fall 2016

15 CALIFORNIA TABLES Table 3. Employment Quarterly 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 California Payroll Employment (Thousands) Total Nonfarm Manufacturing Durable Goods Wood Products Computer & Electronics Transportation Equipment Nondurables Foods Non-Manufacturing Mining Construction Transportation, Warehouse & Util Wholesale Trade Retail Trade Information Prof. & Bus. Services Admin. & Support Prof. Sci. & Tech Mgmt. of Co Financial Activities Real Estate & Rent Finance & Insurance Education & Health Service Education Services Health Services Leisure & Hospitality Other Services Government Federal Gov't State & Local Gov't Center for Business and Policy Research 15

16 CALIFORNIA TABLES Table 4. Employment Annual California Payroll Employment (Thousands) Total Nonfarm Manufacturing Durable Goods Wood Products Computer & Electronics Transportation Equipment Nondurables Foods Non-Manufacturing Mining Construction Trans., Warehouse & Util Wholesale Trade Retail Trade Information Prof. & Bus. Services Admin. & Support Prof. Sci. & Tech Mgmt. of Co Financial Activities Real Estate & Rent Finance & Insurance Education & Health Service Education Services Health Services Leisure & Hospitality Other Services Government Federal Gov't State & Local Gov't California & Metro Forecast Fall 2016

17 CALIFORNIA CHARTS California Personal Income (percent change from one year ago) 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 10% California Real Gross State Product (percent change from one year ago) 8% 6% 4% 2% 0% -2% -4% -6% -8% 14% California Unemployment Rates (percent) 12% 10% 8% 6% 4% 2% 0% Center for Business and Policy Research 17

18 CALIFORNIA CHARTS 17,500 California Total Nonfarm Employment (Thousands) 17,000 16,500 16,000 15,500 15,000 14,500 14,000 13,500 13, ,100 California Construction Employment (Thouands) 1, ,700 California Manufacturing Employment (Thousands) 1,600 1,500 1,400 1,300 1,200 1,100 1, California & Metro Forecast Fall 2016

19 CALIFORNIA CHARTS 700 California Trade, Transportation, and Utilities Employment (Thousands) ,000 California Financial Activities Employment (Thouands) ,900 California Education and Health Services Employment (Thousands) 2,700 2,500 2,300 2,100 1,900 1,700 1,500 1, Center for Business and Policy Research 19

20 CALIFORNIA CHARTS 2,900 California Education and Health Services Employment (Thousands) 2,700 2,500 2,300 2,100 1,900 1,700 1,500 1, California Information Employment (Thousands) ,400 California State and Local Government Employment (Thousands) 2,300 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1, California & Metro Forecast Fall 2016

21 CALIFORNIA CHARTS 300 California Federal Government Employment (Thousands) California Housing Starts (Thousands) ,500 California New Passenger & Light Truck Registrations (Thousands) 2,300 2,100 1,900 1,700 1,500 1,300 1, Center for Business and Policy Research 21

22 METROS

23 Fresno MSA Total nonfarm employment is expected to grow by 2.9% between 2015 and Nonfarm employment in the first and second quarters of 2017 is expected to have a 3.1% and 1.8% increase followed by 1.8% and 1.5% growth in the third and fourth quarters, respectively. The leading sectors for employment growth for 2017 are predicted to be the Construction and Mining and the Professional and Business Services sectors with 7.8% and 4.8% increases, respectively. Employment is expected to increase in all sectors with the exception of the Information (-2.6%), Manufacturing (-1.4%), Federal Government (-1.1%) and Other Services (-0.2%) sectors. SHORT TERM OUTLOOK Real personal income in Fresno is expected to grow 2.7% between 2016 and 2017 or $31.6 billion and also 3% between 2017 and 2018 to $32.6 billion. The Fresno MSA s population is expected to reach approximately 998,063 in 2017 and will grow approximately 1.2% to 1.3% each year, reaching approximately 1,036,424 in An increase in the labor force between 2016 and 2017 of 2% is also expected. The labor force is projected to decrease in growth reaching 1.1% in The unemployment rate in 2017 is expected to decrease to 9.8% from 10.2% in Unemployment is estimated to return to 10.2% in % Fresno Real Personal Income (percent change from one year ago) 360 Fresno Payroll Employment (Thousands) 8% 340 7% 6% 320 5% 300 4% 3% 280 2% 260 1% 0% -1% -2% % Fresno Unemployment Rates (percent) 200 Fresno Employment Mix Relative to California, 2015 (California = 100) 18% 16% 14% % % 80 8% 60 6% 40 4% 20 2% 0% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 23

24 METRO SUMMARY - FRESNO Quarterly Outlook for Fresno September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 24 California & Metro Forecast Fall 2016

25 METRO SUMMARY - FRESNO Quarterly Outlook for Fresno September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 25

26 METRO SUMMARY - FRESNO Annual Outlook for Fresno September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 26 California & Metro Forecast Fall 2016

27 METRO SUMMARY - FRESNO Merced MSA SHORT TERM OUTLOOK Total nonfarm employment is expected to grow 1.8% between 2016 and 2017 with the most growth seen in the first quarter of 2017 with 2.6% growth. The expected leading sectors for employment growth in 2016 are in the Financial Activities (9.6%), Federal Government (7.2%), and State & Local Government (5.7%) sectors. The only sector forecasted to experience declining rates in 2016 is Professional & Business Services (3.7%). The Manufacturing, Information, and Other Services sectors are expected to see declining rates in Real personal income in the Merced MSA is expected to increase to $8 billion in 2016, a 3% increase from 2015 s real personal income of $7.7 billion. An increase in real personal income is expected to continue each year until it reaches $9 billion in The population in Merced is expected to reach approximately 275,400 in The labor force is expected to grow 0.4% between 2015 and The unemployment rate for the Merced MSA is forecasted to be 10.6% in 2016, down from 11.4% in Unemployment will decline each year, reaching 9.4% in In addition, housing starts will grow each year with an expected 917 in 2017 and an estimated 1,151 by % Merced Real Personal Income (percent change from one year ago) 75 Merced Payroll Employment (Thousands) 70 10% 65 5% % 50-5% 45-10% 40 Merced Unemployment Rates (percent) Merced Employment Mix Relative to California, 2015 (California = 100) 20% % 16% 14% % % 80 8% 60 6% 40 4% 20 2% 0% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 27

28 METRO SUMMARY - MERCED Quarterly Outlook for Merced September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 28 California & Metro Forecast Fall 2016

29 METRO SUMMARY - MERCED Quarterly Outlook for Merced September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 29

30 METRO SUMMARY - MERCED Annual Outlook for Merced September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 30 California & Metro Forecast Fall 2016

31 Modesto MSA SHORT TERM OUTLOOK Total nonfarm employment is expected to grow 3.3% between 2016 and 2017 with the highest growth rate seen in fourth quarter at 4.6%. Job growth in the third quarter of 2016 is estimated at 3.2% growth and 2.7% growth in the fourth quarter. The leading sectors for employment growth between 2015 and 2016 are in the Leisure & Hospitality (6%); Construction and Mining (5.7%); and Trade, Transportation, and Utilities (4.1%) sectors. Meanwhile, a decline is expected in the Information (-3.2%) sector. Between 2016 and 2017 declining rates are expected in the Information (-4.7%), Manufacturing (-2.1%), and Other Services (-0.9%) sectors. Real personal income is expected to increase 3.5% in 2016 to $17.3 billion, up from $16.7 billion the previous year. Real personal income is expected to grow approximately between 2.5% and 3.1% between 2017 and The average annual wage is estimated to be $50,600 in 2016 and will continue to grow each year reaching $58,900 in The population in the Modesto MSA is expected to reach 545,700 in 2016 and will grow each year reaching 571,200 in Modesto s labor force is expected to grow at a rate of 1.3% for 2016, up from declines in the previous three years. Unemployment is estimated to decline to 8.6% in 2016 from 9.5% in 2015 but will rise between 2018 and 2020, reaching approximately 9.6% in Housing starts are expected to see increases each year between 2016 and % Modesto Real Personal Income (percent change from one year ago) 190 Modesto Payroll Employment (Thousands) 180 8% 170 6% 160 4% 150 2% 140 0% -2% % -6% % Modesto Unemployment Rates (percent) 200 Modesto Employment Mix Relative to California, 2015 (California = 100) % % % % 80 9% 60 7% % 3% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 31

32 METRO SUMMARY - MODESTO Quarterly Outlook for Modesto September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 32 California & Metro Forecast Fall 2016

33 METRO SUMMARY - MODESTO Quarterly Outlook for Modesto September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 33

34 METRO SUMMARY - MODESTO Annual Outlook for Modesto September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 34 California & Metro Forecast Fall 2016

35 Oakland MSA SHORT TERM OUTLOOK Nonfarm employment in the Oakland MSA is expected to increase 2.5% between 2015 and 2016 and 1.8% between 2016 and The expected leading sectors for employment growth in 2017 are the Construction and Mining and Professional & Business Services sectors with 4.0% and 3.9% growth, respectively. Meanwhile, declines are expected in the Information (-2.1%), Federal Government (-0.5%), and Other Services (-0.4%). These sectors, with the exception of the Information sector, are expected to continue to experience declines or no growth through Real personal income for 2017 is expected to increase to $148.3 billion, a 2.8% increase from Real personal income is expected to grow over 3% each year through The Oakland MSA population is expected grow to 2,847,682 in 2017, a growth of 1.3% between 2016 and 2017; the population is expected to reach approximately 2,956,500 by Unemployment in Oakland is expected to decrease to 4.4% in 2016, down from 4.9% in The labor force is expected to growth 1.2% between 2015 and Housing starts reach 8,962 in 2017 and 11,411 in % Oakland Real Personal Income (Percent change from one year ago) Oakland Payroll Employment (Thousands) 10% % % % % % -2% -4% -6% -8% Oakland Unemployment Rates (percent) Oakland Employment Mix Relative to California, 2015 (California = 100) 12% % % % % 40 2% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. 0% Center for Business and Policy Research 35

36 METRO SUMMARY - OAKLAND Quarterly Outlook for Oakland September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 36 California & Metro Forecast Fall 2016

37 METRO SUMMARY - OAKLAND Quarterly Outlook for Oakland September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 37

38 METRO SUMMARY - OAKLAND Annual Outlook for Oakland September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 38 California & Metro Forecast Fall 2016

39 Sacramento MSA SHORT TERM OUTLOOK Total nonfarm employment in the Sacramento MSA is expected to increase 2.4% between 2015 and 2016 and will grow each year between % through This percent change is lower than the previous few years where growth was between 2% and 3% between 2012 and The leading sectors for employment growth in 2016 are Construction (9.3%), Education & Health Services (3.7%), and Federal Government (2.9%), while a decline of -2.1% is expected in the Information sector. The Federal Government sector is expected to experience declines between 2018 and Real personal income is forecasted to grow to $93.3 billion in 2016, an increase of 2.8% from the previous year, and progressive growth is expected in each quarter of Real personal income will grow approximately between 2.9% and 3.5% in the following years through The population of the Sacramento MSA is expected to be 2,307,936 in 2016, an increase of 1.3% from The labor force is calculated to also experience a 1.2% increase in 2016 and will grow between 1.4% and 1.5% in the following years through The unemployment rate is expected to be at approximately 5.4% in 2016 and will stay between 5.6% and 6% in the following years through % Sacramento Real Personal Income (percent change from one year ago) 1000 Sacramento Payroll Employment (Thousands) 8% 950 6% 900 4% 850 2% 800 0% 750-2% -4% 700 Sacramento Unemployment Rate (percent) Sacramento Employment Mix Relative to California, 2015 (California = 100) 14% % % % 80 6% % 2% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 39

40 METRO SUMMARY - SACRAMENTO Quarterly Outlook for Sacramento September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (09$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (09$) Average Annual Wage (Ths) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 40 California & Metro Forecast Fall 2016

41 METRO SUMMARY - SACRAMENTO Quarterly Outlook for Sacramento September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (09$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (09$) Average Annual Wage (Ths) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 41

42 METRO SUMMARY - SACRAMENTO Annual Outlook for Sacramento September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (09$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (09$) Average Annual Wage (Ths) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths) Pct Chg Year Ago Labor Force (Ths) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 42 California & Metro Forecast Fall 2016

43 San Francisco MSA SHORT TERM OUTLOOK Nonfarm employment is expected to grow by 3.4% between 2015 and 2016 and 2.3% between 2016 and In the first quarter of 2017, job growth in nonfarm employment is expected to be 2.7%. The expected leading sectors for employment growth in 2017 are the Professional & Business Services (5.0%); Construction and Mining (4.0%); and Education & Health Services (2.6%) sectors. Meanwhile, declines are expected in the Federal Government (-0.8%) and Other Services (-0.3%) sectors. No growth is expected for the Manufacturing sector in Real personal income is expected to grow 4.0% between 2015 and 2016 and 4.1% between 2016 and 2017, reaching $156.1 billion in Per capita income is expected to increase each year and will reach an estimated $122,600 in The San Francisco MSA population is expected to reach approximately 1,669,600 in 2017, an increase of 1.1% from the previous year. The labor force is expected to grow 1.9% between 2015 and 2016 as well as 2.2% between 2016 and 2017; the labor force is expected to have declining rates reaching 0.7% in The unemployment rate is expected to slightly decline to 3.1% in 2017 from 3.2% in 2016 and is expected to stay between 3% and 3.1% through % San Francisco Real Personal Income (percent change from one year ago) 1250 San Francisco Payroll Employment (Thousands) % % % % 950-5% % -15% % San Francisco Unemployment Rates (percent) San Francisco Employment Mix Relative to California, 2015 (California = 100) 11% % % % 40 3% 1% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 43

44 METRO SUMMARY - SAN FRANCISCO Quarterly Outlook for San Francisco September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (2009$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (2009$) Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 44 California & Metro Forecast Fall 2016

45 METRO SUMMARY - SAN FRANCISCO Quarterly Outlook for San Francisco September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (2009$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (2009$) Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 45

46 METRO SUMMARY - SAN FRANCISCO Annual Outlook for San Francisco September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (2009$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (2009$) Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 46 California & Metro Forecast Fall 2016

47 San Jose MSA SHORT TERM OUTLOOK Total nonfarm employment is expected to grow 3.7% between 2015 and 2016 and grow 2.3% between 2016 and The leading sectors for employment growth in the third quarter of 2016 are Construction & Mining, Professional & Business Services, and Leisure & Hospitality all at 7% growth. Between 2016 and 2017, declines are expected in the Federal Government (-0.2%) and Other Services (-0.1%) sectors. Real personal income is expected to grow to $130.8 billion, an increase of 3.2% in 2016 and is expected to grow 4.6% between 2016 and By 2020, real personal income is expected to reach $152.2 billion. The San Jose MSA population is expected to reach approximately 2,002,735 in 2016, an increase of 1.2% from the previous year. The population will continue to grow approximately 1.2% each year, reaching 2,098,900 in The labor force will grow by 2.2% in 2016 and then 3.7% in The unemployment rate is forecasted to decrease to 3.9% in 2016 and will be at approximately 3.3 to 3.4% between 2018 and % San Jose Real Personal Income (percent change from one year ago) 1200 San Jose Payroll Employment (Thousands) 30% % % % % 5% 950 0% -5% % -15% 800 San Jose Unemployment Rates (percent) San Jose Employment Mix Relative to California, 2015 (California = 100) 13% % 200 9% 150 7% 100 5% 50 3% 1% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 47

48 METRO SUMMARY - SAN JOSE Quarterly Outlook for San Jose September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 48 California & Metro Forecast Fall 2016

49 METRO SUMMARY - SAN JOSE Quarterly Outlook for San Jose September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 49

50 METRO SUMMARY - SAN JOSE Annual Outlook for San Jose September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 50 California & Metro Forecast Fall 2016

51 Stockton MSA SHORT TERM OUTLOOK Total nonfarm employment is expected to grow 3.7% between 2015 and 2016 and 3.2% between 2016 and The expected leading sectors for employment growth in 2016 are the Leisure & Hospitality (5.7%); Trade, Transportation, and Utilities (4.6%); and Information (4.0%) sectors. Meanwhile, declines are expected in the Financial Activities (-1.1%) and Federal Government (-0.8%) sectors; declines are expected in these sectors through Real personal income is expected to increase 3.2% between 2015 and 2016 and will continue to grow approximately 3% to 3.2% each year through Per capita income, expected to be $40,200 in 2017, will increase each year through 2020, reaching $44,900 in The population in the Stockton MSA will increase 1.5% in 2016 to approximately 738,700 and will increase each year reaching 783,100 in Growth each year in the labor force will be greater than the previous few years, with an expected growth rate of 1.3% between 2015 and The unemployment rate is expected to decrease from 8.9% in 2015 to 8.2% in 2016 and will remain at approximately 7.9% to 8.2% through Housing starts are also expected to grow each year between 2016 and % Stockton Real Personal Income (percent change from one year ago) 250 Stockton Payroll Employment (Thousands) 240 8% 230 6% % 200 2% % 170-2% -4% Stockton Unemployment Rates (percent) Stockton Employment Mix Relative to California, 2015 (California = 100) 18% % % % % % 40 6% 4% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 51

52 METRO SUMMARY - STOCKTON Quarterly Outlook for Fresno September 2016 Forecast 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 52 California & Metro Forecast Fall 2016

53 METRO SUMMARY - STOCKTON Quarterly Outlook for Stockton September 2016 Forecast 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 53

54 METRO SUMMARY - STOCKTON Annual Outlook for Stockton September 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 54 California & Metro Forecast Fall 2016

55 CENTER FOR BUSINESS AND POLICY RESEARCH University of the Pacific A national doctoral university, University of the Pacific is recognized for an education combining exceptional professional preparation in a student-centered tradition of close interactions between students and professors. With a core liberal arts college and eight professional schools, more than any university enrolling fewer than 10,000 students, Pacific offers professional opportunities associated with far larger institutions in the environment of a small learning community. Pacific is California s first chartered institution of higher learning, having received its articles of incorporation from the California Supreme Court on July 10, The University enrolls more than 5,600 students on three campuses situated in the Northern California cities of San Francisco, Stockton and Sacramento. President Pamela A. Eibeck Eberhardt School of Business The Eberhardt School of Business offers a Masters in Business Administration (MBA), Master of Accounting (MAcc), Bachelor of Science in Business Administration, Bachelor of Science in Accounting, and Minors in Management, Business Administration, and Information Systems to nearly 700 students. With an emphasis on interactive classes and studentfaculty engagement, the program is committed to developing successful future business leaders through a learning process that is personal, relevant, and professional. In addition to developing well-rounded and highly skilled graduates, the Eberhardt School of Business has demonstrated its commitment to community service and regional economic development through a variety of outreach programs and activities including the Center for Business and Policy Research, Career Management Center, Center for Entrepreneurship, Institute for Family Business, and Westgate Center for Management Development. Dean Lewis R. Gale Center for Business and Policy Research The Center for Business and Policy Research, founded in 2004 and housed in the Eberhardt School of Business, produces quarterly economic forecasts of California and 8 metropolitan areas from Sacramento to Fresno to the San Francisco Bay Area. In addition to its forecasting program, the Center conducts policy and planning studies on topics such as water, transportation, housing, and economic development for public and private clients throughout Northern California. Jeffrey A. Michael, Ph.D. Director, Center for Business and Policy Research Ph.D., North Carolina State University; M.S., University of Maine; B.A., Hamilton College (NY) Dr. Jeffrey Michael is Director of the Center for Business and Policy Research and Associate Professor in the Eberhardt School of Business at the University of the Pacific. Jeff s areas of expertise include regional economic forecasting and environmental economics including work on the economic impacts of the Endangered Species Act, climate change, and regulation on land use, property values and employment growth. His research has received numerous grants, been published in scholarly journals and received local and national press coverage including the Wall Street Journal, New York Times Magazine, San Francisco Chronicle, Washington Post, NPR, and PBS. Prior to joining Pacific in 2008, Jeff was faculty at Towson University in Maryland where he served as Director of the Center for Applied Business and Economic Research, Associate Dean, and faculty. Jeff received his Ph.D. from North Carolina State University, M.S. from the University of Maine, and B.A. from Hamilton College (NY). UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

56 University of the Pacific Eberhardt School of Business Sacramento Office: th Avenue Sacramento, CA Stockton Office: 3601 Pacific Avenue Stockton, CA Pacific.edu/CBPR