C I T Y O F B O I S E D E P A R T M E N T O F F I N A N C E A N D A D M I N I S T R A T I O N Office of Budget Development & Monitoring Economic Brief Shannon Cade, Financial Analyst & Brent Davis, Budget Manager Volume 8 Quarter 1 (CY) 2016 (January 1 - March 31) Quarterly Summary Employment Construction The labor force in Boise continues to grow and the unemployment rate remains low at 3.6. Single family permit revenue is up 28.2 over last year, which is a strong indicator of continued economic activity. Special Points of Interest Boise s unemployment rate remains low at 3.6 Housing Sales Tax Airport Traffic Inventory is 11.4 above this time last calendar year. This is the result of increased construction activity and increased housing demand (sellers environment). Inventory will be closely watched to monitor if or when supply begins to out pace demand (buyers environment). Sales tax receipts increased by $19.7 M, or 5.3, over last year. Sales tax revenue is expected to remain strong. air passenger traffic continues to post substantial year over year gains and is a strong indicator for a stable economic environment. Construction permits increased by 10.5 Inside this issue: Quarterly Summary 1 Employment Data 1-4 Construction Activity 5-6 Housing Trends 7 State Sales Tax 7 Airport Data 8 CY = Calendar Year Q = Quarter YOY = Year Over Year MSA = Metropolitan Statistical Area 100 basis points = 1 NOTE: Signs indicate a general economic outlook compared to the previous quarter and/or year. Employment Data employment as of March 2016 is up 2,693 jobs, or 2.3, compared to last year. Comparing QR4 end (Dec.) to QR1 end (Mar.) total employment rose by 713 jobs, or 0.6. When compared with the prior year, the unemployment rate for Boise in the first quarter is down 50 basis points, from 3.9 to 3.4. When compared to the prior quarter end (Dec), the unemployment rate for Boise increased 50 basis points from 3.1 to 3.6. Relative to comparable cities in the western United States, Boise continues to post low unemployment numbers. Boise s unemployment rate for March was 40 basis points below the Boise MSA, equal to Ada County, 80 basis points below Idaho, and 160 basis points below the United States. The unemployment rate measure includes jobless individuals who are available and have been actively looking for work in the past four weeks. Since this statistic does not include discouraged or underemployed workers, parts of the employment picture may be missing. Underemployment is a complex and difficult statistic to measure; however, the Bureau of Statistics (BLS) created a measure (called U-6) designed to more broadly measure unemployment by counting unemployed (including long-term job seeking), temporary workers, and part-time workers (those that are part-time for economic reasons). The average U-6 measurement (4-quarter moving average), decreased from 9.8 in CY 2015 to 8.4 in CY 2016. This measure ranked 14th among all states and was well below the national average of 10.1 NOTE: This quarterly brief is based on the calendar year, not the fiscal year, unless otherwise stated.
Employment (continued) Jan '16 (Revised) Jan (Actual) Area Boise City 119,680 115,238 4,442 3.7 116,989 112,180 4,809 4.1 Ada County 220,499 212,229 8,270 3.8 215,621 206,597 9,024 4.2 Boise MSA 327,693 313,427 14,266 4.4 320,708 305,199 15,509 4.8 Idaho 796,562 758,830 37,732 4.7 781,777 741,291 40,486 5.2 United States 4.9 5.7 Feb '16 (Revised) Feb (Actual) Area Boise City 119,853 115,572 4,281 3.6 117,282 112,645 4,637 4.0 Ada County 220,741 212,845 7,896 3.6 216,050 207,453 8,597 4.0 Boise MSA 328,046 314,659 13,387 4.1 321,447 306,802 14,645 4.6 Idaho 798,981 762,960 36,021 4.5 785,092 746,258 38,834 4.9 United States 4.9 5.5 Mar '16 (Preliminary) Mar (Actual) Area Boise City 120,202 116,157 4,045 3.4 117,509 112,938 4,571 3.9 Ada County 221,359 213,921 7,438 3.4 216,468 207,994 8,474 3.9 Boise MSA 329,277 316,770 12,507 3.8 322,394 308,086 14,308 4.4 Idaho 801,624 767,795 33,829 4.2 787,431 750,404 37,027 4.7 United States 5.0 5.5 CY Q1 '16 (Average) CY Q1 (Average) Area Boise City 119,912 115,656 4,256 3.6 117,260 112,588 4,672 4.0 Ada County 220,866 212,998 7,868 3.6 216,046 207,348 8,698 4.0 Boise MSA 328,339 314,952 13,387 4.1 321,516 306,696 14,821 4.6 Idaho 799,056 763,195 35,861 4.5 784,767 745,984 38,782 4.9 United States 4.9 5.6 Source: U.S. Bureau of Statistics, data through March (not seasonally adjusted)
Employment (continued) Employment 125,000 120,000 115,000 110,000 105,000 100,000 119,680 119,853 120,202 116,989 117,282 117,509 116,929 109,737 110,415 110,900 110,646 111,247 117,777 118,500 119,075 118,102 117,326 117,399 111,844 111,805 111,087 110,266 110,602 105,608 106,420 106,906 106,607 107,542 108,132 108,574 108,034 107,401 108,005 119,489 118,832 111,618 111,964 109,890 110,221 March Unemployment Rate 6 4 3.4 3.4 3.8 4.2 5.0 2 0 Boise City Ada County Boise MSA Idaho United States March Unemployment Rate - Comparative Cities 10 8 6 4 3.7 2.9 3.4 4.6 5.6 5.0 3.4 6.8 6.6 2 0 Aurora, CO Fort Collins, CO Boise, ID Eugene, OR Reno, NV Salem, OR Salt Lake City, UT Spokane, WA Tacoma, WA Source: US Bureau of Statistics, data through March (not seasonally adjusted)
Employment (continued) Boise MSA Non-Farm Employment Sector Information The Boise MSA has 54 different employment sectors that respond differently to current economic conditions. The following table highlights the 4 best and worst performing industries compared to both last quarter and last year. During the first quarter, Specialty Trade Contractors had the largest percentage increase of jobs, at 19.1, compared to last year. Business Support Services, once again, had the largest decrease, 17.4, compared to last year, however showed the strongest gain when compared to the prior quarter. Quarter over Quarter - Average Jobs Change Year over Year - Average Jobs Change Gains Gains Business Support Services 1,033 19.3 Specialty Trade Contractors 2,600 19.1 State Government Education 733 14.7 Mining, Logging, and Construction 2,033 15.9 Administrative & Support Services 2,233 11.4 Goods Producing 3,000 9.3 Other General Merchandise Stores 567 11.3 Employment Services 1,000 8.1 Losses Losses Services to Bulidgins & Dwellings (467) -8.8 Administrative & Support Services 2,567-5.8 Mining, Logging, and Construction (1,900) -9.2 Local Government Education 67-7.2 Construction of Builiding (533) -13.1 Computrer & Peripheral Manufacturing (600) -9.1 Computrer & Peripheral Manufacturing (400) -20.0 Business Support Services 767-17.4 Data through March (not seasonally adjusted) Boise Non-farm Employment Sector YOY Changes - Quarter 1 28.0 20.0 19.1 15.9 12.0 9.3 8.1 4.0-4.0-12.0-5.8-7.2-9.1-20.0-17.4-28.0 Specialty Trade Contractors Mining, Logging, and Construction Goods Producing Employment Services Administrative & Support Services Local Government Education Computrer & Peripheral Manufacturing Business Support Services Source: Idaho Department of (not seasonally adjusted)
Construction Activity Construction activity in Boise was positive in the first quarter and continued to do well when compared to the prior year. Comparisons are focused on the prior year due to the seasonality of the data set. Compared to the first quarter of calendar year 2015, total permit revenue increased by $775.8k, or 45.2, total permit value increased by $82.3M, or 65.4, and total permit volume increased by 424 permits, or 11.5. permits for the dwellings category (including single, duplex, and multiple family units) increased by 105 permits, or 61.8 compared to the prior year. Single family unit permits increased by 40 permits, or 28.2, compared to last year. The year over year growth in the single family permits is a reoccurring trend. Multiple family permits decreased by 57 permits, or 203.6, compared to last year. The dwellings other category (including remodels, additions, and garages) increased by 31 permits, or 9.5. Dwellings Source: http://pds.cityofboise.org/building/docs/constreports/ Boise Construction - Quarter 1 Type of Permits Jan Jan '16 Feb Feb '16 Mar Mar '16 Single Family 55 42 36 56 51 84 142 182 Duplex 0 8 0 0 0 0 0 8 Multiple 0 56 28 0 0 29 28 85 Dwellings 55 106 64 56 51 113 170 275 Dwellings Other 72 73 110 117 145 168 327 358 Commercial Construction 84 93 66 86 96 84 246 263 Trade Permits 1,153 1,208 1,185 1,322 1,362 1,594 3,700 4,124 Q1 Q1 '16
Construction Activity (continued) Permit Revenue - Quarterly 2,800,000 2,400,000 2,493,658 2,615,799 2,465,768 2,000,000 2,343,065 2,234,752 2,146,999 1,906,031 1,600,000 1,717,849 1,573,267 1,663,921 1,726,607 1,200,000 1,429,771 1,365,496 Permit Value - Quarterly 250,000,000 208,040,214 210,636,454 258,229,801 200,000,000 161,946,164 150,000,000 100,000,000 128,389,461 123,997,812 125,779,383 119,538,226 109,606,456 133,387,362 130,382,928 128,788,534 129,534,682 50,000,000 Permit Volume - Quarterly 5,500 5,695 5,671 5,000 4,500 4,000 3,500 4,988 4,515 3,911 3,693 4,869 4,573 5,021 4,879 4,900 4,429 4,402 Source: http://pds.cityofboise.org/building/docs/constreports
Number of Homes Housing Trends (latest available data) According to the latest Corelogic home price index (HPI) report in March, home prices for Idaho increased by 7.3 over last year, which is above the national average of 6.7. inventory increased by 11.4 over last year after a brief reduction during the slower winter period. Foreclosures remain at a reasonable level. Housing Trends 1,500 800 1,469 1,544 1,576 1,650 1,704 1,699 1,563 1,637 1,694 1,514 N/A 1,088 1,078 447 239 350 335 371 366 373 403 229 205 197 202 N/A 100 Mar Apr May Jun July Aug Sep Oct Nov Dec Jan '16 Feb '16 Mar '16 Foreclosures Inventory Source: www.trulia.com and www.corelogic.com State Sales Tax The City shares sales tax revenue with the State and receives its portion on a quarterly basis. A total of 11.5 of gross sales tax collections is shared with cities across Idaho. The cities share of revenue is a function of relative property value and proportionate population. The chart below reflects the gross sales tax collected by the State. Gross sales tax collected in the first quarter increased by $19.7M, or 5.3, when compared to last year. Compared to the prior quarter, gross sales tax decreased by $8.5M, or 2.3, which is due to seasonality and is consistent with historical trends. The gross sales tax collection amount remains consistently higher than previous years. Gross Sales Tax - Quarterly 430,000,000 408,988,649 400,000,000 370,000,000 340,000,000 310,000,000 370,301,373 350,560,543 324,641,709 316,793,667 369,992,364 347,195,016 331,385,390 381,176,254 365,793,758 378,765,833 355,242,260 331,891,111 280,000,000 Source: Idaho State Tax Commission
Airport Passenger Traffic The number of air passengers can be a strong indicator of the global and local economic environment. During the first quarter, total passenger traffic increased by 83,298 passengers, or 12.9, compared to last year. Compared to the prior quarter, total passenger traffic decreased by 59,334, or 7.55. Since the prior quarter includes normal holiday travel, a decrease between these quarters is seasonally typical. passenger traffic remains positive and has been positive on a year over year comparison since the quarter ending September 2013. 850,000 Passenger Traffic - Quarterly 750,000 650,000 728,270 644,972 608,800 603,649 737,744 685,418 659,046 807,951 738,417 688,334 787,614 720,554 661,428 550,000 Passenger Traffic - Monthly 280,000 245,000 270,318 253,362 210,000 237,146 175,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Department of Aviation, City of Boise