Greater Nashua Chamber of Commerce Economic Outlook Luncheon, January 15, 2014

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During this educational lunch event, an expert panel recruited by the Chamber shared their predictions for economic trends imperative to local business in the upcoming year. We explored factors such as foreclosures, start-ups, unemployment and hiring rates, bankruptcies, and more from a local, state, and national level.

This year’s lunch will featured Dennis Delay, Economist at NH Center for Public Policy, who discussed the hot topic of the housing market. Charlie Arlinghaus, President of The Josiah Bartlett Center for Public Policy, focused specifically on New Hampshire’s outlook, and Paul Provost, Senior VP and CFP of the Merrimack County Savings Bank provided a general overview of the national economy and the investment markets.

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Greater Nashua Chamber of Commerce Economic Outlook Luncheon, January 15, 2014

  1. 1. Welcome to the Economic Outlook Luncheon January 15, 2014 Greater Nashua Chamber of Commerce
  2. 2. Today’s Panelists Mr. Dennis Delay Mr. Charlie Arlinghaus Mr. Paul M. Provost Economist, NH Center for Public Policy President of The Josiah Bartlett Center CFP, Senior Vice President of Merrimack County Savings Bank Greater Nashua Chamber of Commerce 2
  3. 3. Board of Directors William H. Dunlap, Chair David Alukonis Eric Herr Dianne Mercier James Putnam Stephen J. Reno Todd I. Selig New Hampshire Economic Trends Greater Nashua Chamber of Commerce Economic Outlook Luncheon Michael Whitney Daniel Wolf January 15, 2014 Martin L. Gross, Chair Emeritus Directors Emeritus Sheila T. Francoeur Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Kimon S. Zachos Greater Nashua Chamber of Commerce 3
  4. 4. Anecdotal evidence from Fed Bank of Boston, December 4, 2013 • Expanding economy in New England. • Most respondents in manufacturing, retail and tourism, software and IT services, and the staffing industry report year-over-year increases in revenue • Residential and commercial real estate contacts indicate that market conditions continue to improve. • Most firms are holding headcounts level; wages are steady or increasing modestly. • Upward price pressures remain minimal. • Many firms are cautiously optimistic about the outlook, a more upbeat tally than in the October round of calls. Greater Nashua Chamber of Commerce 4
  5. 5. Calculated Risk has the clearest picture of the problem we face: Greater Nashua Chamber of Commerce 5
  6. 6. NH – Less of a decline, but a slower recovery Index of Total NonFarm Employment (Seasonally Adjusted) 101.0 100.0 Dec 2007 =100 99.0 New England New Hampshire 98.0 97.0 96.0 95.0 94.0 United States 93.0 Ja n M -07 ay Se -07 pJa 07 n M -08 ay Se -08 pJa 08 n M -09 ay Se -09 pJa 09 n M -10 ay Se -10 pJa 10 n M -11 ay Se -11 pJa 11 n M -12 ay Se -12 pJa 12 n M -13 ay Se -13 p13 92.0 US Greater Nashua Chamber of Commerce NE NH 6
  7. 7. Many NH Employment Sectors Have Still Not Recovered Change in New Hampshire Jobs 10000 5000 0 -5000 Jul 07 to Jul10 Jul 10 to Jul 13 -10000 Greater Nashua Chamber of Commerce en t y nm er pi H os Le is ur e & lth H ea & u Ed G ov ic Se rv rv Se s Bu Pr of & ta lit es es ic iti e tiv Ac al ci na n Fi Tr a & Tr ad e s n ta tio ns po r st on C M an uf ac ru c tu r in g tio n -15000 7
  8. 8. Job Quality is Mediocre Greater Nashua Chamber of Commerce 8
  9. 9. Nashua growth in Financial and Business Services Greater Nashua Chamber of Commerce 9
  10. 10. State averages mask wide regional variation Percent of adult population with a B.A. or higher 37.6% 36.5% 35.1% 35.0% 31.4% 31.1% 28.4% 26.9% as hu a te r G re at e rN ch es G re at e at e G re rM an rC on co rd n R Se ac k ad no c D ar tm ou th / M on oa st R eg io R ee na p Su e La k eg io eg io n n n eg io R s La ke ou n M te W hi G re at N ta i or ns th W R eg io oo d n s 14.7% Greater Nashua Chamber of Commerce 10
  11. 11. Did too many people own homes who could not afford them, at 69%? Greater Nashua Chamber of Commerce 11
  12. 12. NH Real Estate Has Finally Hit Bottom and Price (MLS) NH Single-Family Residential Home Sales Source: NH Association of REALTORS 25,000 20,000 Decline from the Peak: Sales -40% from 2004 Price -25% from 2005 $300,000 Median Home Price $250,000 $200,000 15,000 Number of Units Sold $150,000 10,000 $100,000 5,000 $50,000 0 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Units sold Greater Nashua Chamber of Commerce Median Price 2013 YTD thru November 12 12
  13. 13. Home Prices Return to the Long Term Trend: NH Single-Family Residential Home Price (MLS) Source: NH Association of REALTORS $300,000 Median Home Price $250,000 $152,054 $154,410 $169,787 $170,164 $50,000 $187,954 $216,598 $226,354 $237,976 $227,807 $188,089 $170,158 $141,372 $134,749 $100,000 $152,500 $150,000 $206,266 $200,000 Inflation Adjusted Price Median Price Greater Nashua Chamber of Commerce 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 19 98 $0 2000 Inflation Adjusted 13
  14. 14. Another sign of life returning to local real estate markets: Real Estate Transfer New Hampshire State Revenue $180 $160 $140 Millions $120 $100 $80 $60 $40 $20 Jul-13 Jul-12 Jul-11 Jul-10 Jul-09 Jul-08 Jul-07 Jul-06 Jul-05 Jul-04 Jul-03 Jul-02 Jul-01 Jul-00 Jul-99 $0 12 Month Running Greater Nashua Chamber of Commerce 14
  15. 15. NH Foreclosures – Worst is Over NH Monthly Foreclosure Deeds 600 500 Actual Trend 400 300 200 100 Jul-13 Jan-13 Jul-12 Jan-12 Jul-11 Jan-11 Jul-10 Jan-10 Jul-09 Jan-09 Jul-08 Jan-08 Jul-07 Jan-07 Jul-06 Jan-06 Jul-05 Jan-05 0 Source: NH Housing Finance Authority Greater Nashua Chamber of Commerce 15
  16. 16. New Hampshire Home Building Below Normal Greater Nashua Chamber of Commerce 16
  17. 17. Declines in Prices and Interest Rates Affect Affordability Greater Nashua Chamber of Commerce 17
  18. 18. But……. • NH’s Young households are burdened by highest level of student debt in the Nation; • Lending standards are more rigorous—Qualifying Mortgage, 43% debt to income limit, etc.; • With rents rising and mediocre job quality, more difficult to save and qualify; • Nearly 20,000 foreclosed units in past several years in the state—some will not qualify; • Lack of liquidity is keeping boomers in larger houses than they need; • Prices and interest rates are rising in past several months, blunting recent affordability improvements. Greater Nashua Chamber of Commerce 18
  19. 19. This Recovery Not Supported by Migration Net Migration Into and Out of New Hampshire 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 -10,000 -15,000 Greater Nashua Chamber of Commerce 20 11 20 09 20 07 20 05 20 03 20 01 19 99 19 97 19 95 19 93 19 91 19 89 19 87 19 85 19 83 19 81 19 79 19 77 19 75 19 73 19 71 -20,000 19
  20. 20. Migration Patterns Shift! Greater Nashua Chamber of Commerce 20
  21. 21. NEEP Forecast for New Hampshire November 2013 • Growth in the economy is close to 2% and improving. • Housing causes acceleration in growth. • A failure to raise the debt ceiling (in 2014) would be serious, likely sparking a financial crisis and a sharp recession. • We are close to finally breaking free from the black hole of the Great Recession. All it takes is for Washington to come together. Greater Nashua Chamber of Commerce 21
  22. 22. New Hampshire Center for Public Policy Studies Board of Directors William H. Dunlap, Chair David Alukonis Eric Herr Dianne Mercier James Putnam Stephen J. Reno Todd I. Selig Michael Whitney Daniel Wolf Martin L. Gross, Chair Emeritus Directors Emeritus Sheila T. Francoeur Want to learn more? • Online: nhpolicy.org • Facebook: facebook.com/nhpolicy • Twitter: @nhpublicpolicy • Our blog: policyblognh.org • (603) 226-2500 Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Greater Nashua Chamber of Commerce 22
  23. 23. Budgets and Jobs Charlie Arlinghaus Josiah Bartlett Center arlinghaus@jbartlett.org Greater Nashua Chamber of Commerce 23
  24. 24. Apples to Apples "general fund" 1600000 1500000 1400000 1300000 1200000 1100000 1000000 Greater Nashua Chamber of Commerce 24
  25. 25. Priorities: 2015 vs. 2013 $1,470.6M General Fund* (+9.8%) $681.2M HHS (+5.7%) $215.7M DD & BH (+16.6%) $668M Non-HHS (+14.4%) $121.4M Debt Service (+9.1%) $465.5M Other HHS (+1.4%) Greater Nashua Chamber of Commerce 25
  26. 26. NH Employment 1976-2013 750,000 700,000 650,000 600,000 550,000 500,000 450,000 400,000 350,000 employment Greater Nashua Chamber of Commerce Linear (employment) 26
  27. 27. The 13 year Lost Decade 750,000 700,000 650,000 600,000 550,000 500,000 employment Greater Nashua Chamber of Commerce Linear (employment) 27
  28. 28. CFP, Senior Vice President of Merrimack County Savings Bank MR. PAUL M. PROVOST Greater Nashua Chamber of Commerce 28
  29. 29. Thank you for attending our Economic Outlook Luncheon!
  30. 30. Our Upcoming Events State of the City Giggles & Nibbles Comedy Night Date: Wednesday, February 19, 2014 Time: 7:30 – 9:00 AM Location: Courtyard Marriott, Nashua Greater Nashua Chamber of Commerce Date: Friday, February 28, 2014 Time: 6:30 – 9:30 PM Location: Crowne Plaza, Nashua The 11th Annual Greater Nashua Chamber of Commerce Eminence Awards Date: Friday, March 7, 2014 Time: 5:30-7:30 PM Location: Sky Meadow Country Club, Nashua 30

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