Inland Empire Prosperity... John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

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1 Inland Empire Prosperity... John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

2 After Losing 8.71 Million Jobs Now At A Record Level of Jobs U.S. Jobs Long Slow Growth - Not Over-Heating

3 Petroleum Prices Still At 2004 Levels Helps Families In Modest Income Areas

4 Value of the Dollar: Helps Imports & Hurts Exports %

5 Consumer Confidence, Needed To Help Homes Sales

6 S & P 500 Stock Index Back to 2,000

7 Interest Rates Very Low Again Encourages Home Sales

8

9 California Job Gains/Losses ,844, ,474,808 Up 630, % Up Recovery 1,809,542 Great Recession -1,178,158

10

11 Inland Empire Economy Gaining Strength! 5

12 Job Quality

13 Inland Empire Growth was the 2 nd Largest Absolute Job Gain in California in 2015!

14 Unemployment Falling

15 Competitive Conditions

16 Poverty

17 Educational Challenge For Adults & Their Children

18 Population Growth to 2040 Reaches 5.9 Million

19 Job Growth to 2040 Reaches 2,073,355

20 More People Than 25 States!

21 More Income Than 21 States

22 Median Worker Pay Per Year

23 Industrial Space Costs

24 Ontario Airport

25 Gold Mine Theory Secondary Tier Primary Tier

26 Government

27 Assessed Valuation Up $3.2 Billion 0.8% Inflation Up 8.6% SB Co. Up +2.8% Riv Co. Down -0.8%

28 Taxable Retail Sales Up $7.7 Billion, 12.6% Inflation Up 16.1% SB Co. Up +14.4% Riv Co. Up +10.7%

29 Federal, State, Local Government ,200 Local 500 St/Fed % of Job Growth Median Pay $57,984

30 John Russo, Riverside City Manager

31 High Paying Sectors Jack Dangermond Ahmad Adel Al-Khatib

32 Higher End Homes Draw Well Educated Workers UPLAND $497,455 $504,397 Claremont $594,476 $599,310 $449,386 EASTVALE $465,532 $450,500 CORONA $441,965 $350,313 Loma Linda $355,000 $353,820 TEMECULA $376,303 $405,538

33 Migration of AA or Higher Redlands-Loma Linda Western Inland Empire Temecula-Murrieta

34 Professionals, Mgmt., Utilities, Mining Slowly Coming Back ,000 Higher Ed 800 Mgt/Prof % of Growth Median Pay $65,453

35 Office Space Net Absorption 492,858

36 Office Vacancy Rate 15.0% 13.6%

37 Ahmed Al-Khatib Founder, SigmaNet

38 Health Care

39 Inland Empire Underserved by Health Care Workers 26.6% More People Per Health Care Worker in 2015

40 Health Care Jobs: Continuous Growth % of Job Growth Median Pay $54, ,000 Jobs

41 Other Moderate Paying Sectors

42 Real Estate, Finance; K-2Growth Median Pay $49, % of Job Growth % of Job Growth ,000 K Finance

43 Sophisticated Warehousing Operations

44 Port Container Volumes Strong Even With January Labor Slowdown

45 Fulfillment Warehousing

46 E-Commerce Growth Rates Year Over Year by Quarter

47 Logistics Powerful Job Growth : 23% of New Jobs Median Pay $45,677

48 2015 Logistics Job Growth ,000 Jobs

49 PM 2.5: Diesel Pollution -95.6%

50 Manufacturing: Should Be A Major Growth Source

51 California Manufacturing Job Growth Just 5.4% of U.S. Growth

52

53 Inland Empire Manufacturing Jobs % of Job Growth Median Pay $49,567

54 Manufacturing Job Growth ,000

55 Net Industrial Space Absorption 23.1 million 20.7 Million Sq. Ft. of Industrial Under Construction December-2015

56 Industrial Overwhelmingly In The Inland Empire

57 Industrial Vacancy Rate 3.6%

58 Construction: Finally Coming Back

59 Underwater Homeowners Negative Equity Has Dropped 4 th Qtr rd Qtr % to 11.4%

60 Home Price Trends -26.9% 83.4%

61 Long Term Competitive Price Advantage Still Exists $379,000 $190,000 $202,000

62 Home Sales Volume No Breakout

63 Domestic In-Migration: Stalled -10,241 8 Years -1,280 per year

64 Construction Jobs: Growth Gaining % of Job Growth Median Pay $51, ,500 Jobs

65 Steve Ruffner So. California President KB Homes

66 Gold Mine Theory Secondary Tier Primary Tier

67 Low Paying Job Growth Retail, Consumer & Bus. Services, Hotel, Eat & Drink Amusement, Agriculture, Employment Agency % of Job Growth Median Pay $28, ,100 Jobs

68 Forecast

69 Inland Empire Economy Gaining Strength!

70 Looking Ahead... Inland Empire Is a Job Engine Again Construction Coming Back Residential Still Weak Manufacturing Will Be Under Pressure Logistics Will Remain Strong Health Care Will Pick Up Office Growth An Issue Given E-Commerce Changes Lower Paying Jobs Smaller Share Than Most Areas Labor Availability May Become An Issue Forecast: 3.6% (48,700) Total Local Jobs: 1,411,100 Unemployment: 5.0%

71

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