4Q08 Webcast Presentation

Transcription

1 U.S. Regional Watch 4Q8 Webcast Presentation January th, 9 BBVA Economic Research Department, January 9

2 United States Massive government intervention will help to stabilize financial and economic conditions in 9 Economic supports for 9 Financial stabilization ) Public sector to bear a large fraction of credit losses ) Funding markets will show signs of normalization i Demand stimulus ) Large and speedy fiscal policy stimulus ) Monetary policy will succeed in maintaining low long term rates BBVA Economic Research Department, January 9

3 United States Fiscal policy will have a sizeable impact on the economy.5.5 GDP forecast and & fiscal policy stimulus (% change, yoy).3 Previous GDP forecast No fiscal effect Upper range fiscal effect The uncertainty surrounding the potential impact of the fiscal package on the overall economy remains elevated Well-functioning financial markets are essential for sustainable economic growth BBVA Economic Research Department, January 9 3

4 In Alabama, the pace of economic moderation will be similar to national average BBVA Monthly Activity Index (3mma) 6 Alabama Exports (4-qtr % change and % share of US total) t Share. -. Alabama US U.S Growth Source: Wisertrade BBVA Economic Research Department, January 9.8 4

5 In Arizona, the economic downturn is likely to bottom in 9 3 BBVA Monthly Activity Index Home Price Index (3mma) (4-qtr % change) 4 3 Arizona - Arizona - US U.S. U.S Source: OFHEO BBVA Economic Research Department, January 9 5

6 In Colorado, GDP growth will remain below its long-term trend 3 BBVA Monthly Activity Index (3mma) 6 Colorado US Employment (-month % change) 5 4 Colorado 3 U.S. - - Colorado US U.S Source: BLS BBVA Economic Research Department, January 9 6

7 In Florida, recovery could come sooner than in the rest of the country 3 BBVA Monthly Activity Index (3mma) 4 Florida Exports (4-qtr % change) 3 U.S. - Florida Source: Wisertrade BBVA Economic Research Department, January 9 7

8 In New Mexico, we expect a mild GDP contraction 3 BBVA Monthly Activity Index (3mma) Home Price Index (4-qtr % change) U.S. 5 New Mexico 5 - U.S. - New Mexico Source: OFHEO BBVA Economic Research Department, January 9 8

9 In Texas, strong fundamentals will support economic growth BBVA Monthly Activity Index Home Price Index (3mma) (4-qtr % change) 8 U.S Texas US U.S. - Texas Source: OFHEO BBVA Economic Research Department, January 9 9

10 Solid exports and job creation will limit the downturn 6 Texas Exports (4-qtr % change) 6 Texas US Employment (-month % change) Texas U.S Source: Wisertrade Source: BLS BBVA Economic Research Department, January 9

11 The impact of lower oil prices will be less severe than in previous episodes Texas Oil & Gas Extraction (% Share of GDP) Hurricane IKE Texas Economic Losses US$ Billion Economic Production. Oil Industry.5 Infrastructure Damage -.5 Total -9. Reconstruction Activity 8. Net Effect -. % GDP Source: BEA BBVA Economic Research Department, January 9

12 Economic activity in the BBVA Compass footprint will continue outperforming the rest of the country 9 Economic forecasts (Year-over-year % change) AL AZ CO FL NM TX Sunbelt US Real GDP Employment Personal Income Home sales Economic conditions will remain stronger in Texas and Colorado Economic growth in Alabama and New Mexico will remain solid; although, at a more moderate pace The biggest downside risks are in Arizona and Florida BBVA Economic Research Department, January 9

13 3 Industry & structural analysis Downside risks in commercial real estate remain elevated GDP and Commercial Returns (4-qtr % change & quarterly) GDP Structures and Credit Conditions (4-qtr % change; credit standards 4 quarters ahead) 3-4 Credit Tightening (inverted scale) Commercial Returns - 6 Structures Investment Source: BEA & NAR Source: BEA & Fed BBVA Economic Research Department, January 9 3

14 3 Industry & structural analysis The health care system in the BBVA Compass footprint exhibits great opportunities Coverage Expenditure Quality Health care system indicators (%) (Per capita, US=) (%) US (US=) Expenditure (4) Sunbelt AL AZ CO FL NM Quality Coverage (5) (7) US Sunbelt 4 TX Source: CMS, Census & AHRQ BBVA Economic Research Department, January 9 4

15 3 Industry & structural analysis Strong fundamentals in the Sunbelt MSAs will support higher economic growth 9% Metro Population as Share of Total 5 MSA Productivity (Index, US MSA average = ) Sunbelt Sunbelt 85% 5 US Ex-Sunbelt 8% US Ex-Sunbelt 5 75% Source: Census Source: BEA BBVA Economic Research Department, January 9 5

16 3 Industry & structural analysis BBVA Compass footprint remains highly attractive Overall BBVA State Rankings* Texas California Arizona 7 Colorado 8 Florida 5 Top performers Positive outlook Alabama 4 Limited upside Greatest uncertainty New Mexico 43 * BBVA, Dec 8. Does not include PR & DC BBVA Economic Research Department, January 9 6