The Economic Outlook 2014

Transcription

1 The Economic Outlook 2014 Perry Woodside, Ph.D. Urban Land Institute Carolinas Regional Meeting January 23-24, 2014 Certified Public Accountants and Advisors Copyright 2013 Dixon Hughes Goodman LLP All rights reserved. No part of this presentation may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from Dixon Hughes Goodman LLP.

2 2014 US Forecast The modest growth recovery will continue a As of Nov. 25, 2013 b As of Dec. 12, 2013 c As of Dec. 11, 2013 d As of Dec. 18, 2013 e As of Dec. 11, Forecasts Real GDP Federal Reserve Bank of Philadelphia (Survey of Prof. Forecasters) a Real Consumer Spending Unemployment Interest Rates (10 yr. T-Notes) Consumer Price Index 2.6% 7.0% 3.00% 2.0% Livingston Report b 2.8% 6.7% 3.25% 1.8% Wells Fargo c 2.4% 2.0% 6.8% 3.10% 1.7% Federal Reserve Bank d 2.8%- 3.2% 6.3%-6.6% 1.4%-1.6% Conference Board e 2.3% 2.2% 2

3 Fiscal & Monetary Policy Issues Spending Discretionary Entitlements Current budgets Government Revenues Sources of taxes Level of taxes Tax reform Federal Reserve Actions Current stance Challenges Inflation management Government interest costs

4 GDP Growth Factors

5 Consumer Sentiment, Expectations, & Unemployment 5

6 Model for Economic Prosperity

7 Quality of Life Indexes Rank Peer MSA Vitality Earning Learning Social Capital Cost of Lifestyle After Hours Around Town 1 Austin Raleigh Charleston Savannah Nashville Charlotte AVG Source: Charleston Metro Chamber of Commerce; Nex Generation Consulting, Charleston Handprint

8 Financial Markets Residential Mortgage Rates Lending attitudes expected to relax Mortgage interest rates at 4.46% as of December

9 Standards Financial Markets Bank Lending Conditions Demand Business credit is poised to grow as standards are relaxed and demand is strengthening 9

10 State Coincident Economic Activity Index The Coincident Economic Activity Index includes four indicators: nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing and wages and salaries. The trend for each state's index is set to match the trend for gross state product.

11 Carolinas Coincident Economic Activity Index Add Text Here. As of November 2013 NC: up from in November 2012 SC: up from in November 2012

12 State Leading Index The leading index for each state predicts the six-month growth rate of the state's coincident index. In addition to the coincident index, the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply Management (ISM) manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.

13 Carolinas Leading Index Add Text Here. As of November 2013 NC: 4.21 up from 1.89 in November 2012 SC: 4.45 up from 2.63 in November 2012

14 NC Unemployment Rate Add Text Here. As of November 2013 Unemployment Rate in NC: Statewide 7.4% Charlotte MSA 7.5% Raleigh MSA 6.0%

15 SC Unemployment Rate Add Text Here. As of November 2013 Unemployment Rate in SC: Statewide 7.1% Charleston MSA 5.9% Columbia MSA 6.4% Greenville MSA 5.9% MSA was 5.9%

16 NC Per Capita Personal Income Add Text Here. Statewide Per Capita Income as of 2011 $36,028 Charlotte MSA as of 2012 $40,465 Raleigh MSA as of 2012 $42,709

17 SC Per Capita Personal Income Statewide Add Text Per Capita Here. Income as of 2011 $33,388 Charleston MSA as of 2012 $39,444 Columbia MSA as of 2012 $37,294 Greenville MSA as of 2012 $35,696

18 Real Median Household Income Add Text Here. As of January 2012 NC $41,553 SC $44,401

19 NC Real Personal Income Year-Over-Year Percent Change through Q3:13 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

20 SC Real Personal Income Year-Over-Year Percent Change through Q3:13 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

21 NC Housing Starts Thousands of Units (SAAR) through November 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

22 SC Housing Starts Thousands of Units (SAAR) through November 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

23 NC House Price Index (CoreLogic) Year-over-year Percent Change through October 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

24 SC House Price Index (CoreLogic) Year-over-year Percent Change through October 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

25 Industry in NC Source: Federal Reserve Bank of Richmond; Snapshot January 2014

26 NC Payroll Employment Performance Year-over-Year Percent Change through November 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

27 Industry in SC Source: Federal Reserve Bank of Richmond; Snapshot January 2014

28 SC Payroll Employment Performance Year-over-Year Percent Change through November 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

29 NC Labor Force Year-over-Year Percent Change through November 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

30 SC Labor Force Year-over-Year Percent Change through November 2013 Source: Federal Reserve Bank of Richmond; Snapshot January 2014

31 Long-run Supply Drivers of Economic Prosperity

32 Labor Force Participation By Gender Source: Federal Reserve Bank of Richmond; Snapshot January 2014

33 NC Employment Add Text Here. As of November 2013 Civilian Labor Force in NC was 4,658,100 Nonfarm Employment was 4,084,100

34 SC Employment Add Text Here. As of November 2013 Civilian Labor Force in SC was 2,153,300 Nonfarm Employment was 1,907,100

35 NC Long-Term Population Growth Add Text Here. Total Population Growth Rates 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% North Carolina Charlotte MSA Raleigh MSA Source: Woods & Poole Economics, Inc.

36 SC Long-Term Population Growth Add Text Here. 3.00% 2.50% 2.00% Total Population Growth Rates Recent Charleston data may increase forecast 1.50% 1.00% 0.50% 0.00% South Carolina Charleston, SC MSA Columbia, SC MSA Greenville, Mauldin, Easley MSA Source: Woods & Poole Economics, Inc.

37 Federal Reserve likely to remain accommodative Conclusions Labor markets will continue to improve, but at modest pace Consumer confidence will continue slow, upward trend North Carolina and South Carolina s metropolitan areas will continue above average growth Federal budget issues Immigration policy Labor force education Challenges

38 Questions Perry Woodside, Ph.D