If you’re tweeting this event,   use #EOB13 as a hashtag
Chris Barnes, Vice Chair       PNC Bank
Master Gold Sponsors
Master Gold Sponsors
Justin PurdyTime Warner Cable Business Class
Dr. Michael WaldenWilliam Neal Reynolds Distinguished Professor       North Carolina State University
ECONOMIC OUTLOOK:ARE HAPPIER DAYS HERE?          Dr. Mike Walden           Reynolds           Distinguished           Prof...
USEFUL TO THINK OF ECONOMIC   ISSUES IN TWO PARTS1. SHORT-RUN “CYCLICAL”   ISSUE RELATED TO THE   RECESSION AND RECOVERY2....
AGGREGATE PRODUCTIONHAS TOTALLY RECOVERED                        16
THE JOB MARKET IS ALSO     COMING BACK                         17
MANUFACTURING HAS BEEN      A BIG PLUS                         18
….. AS HAVE EXPORTS      billions of real 2005 $                                19
BANK LOANS HAVE ALSO INCREASED          (BILLIONS OF DOLLARS)                                  20
AND CONSUMERS ARE SPENDING MORE       (INFLATION-ADJUSTED PERCENTAGE CHANGES)                                             ...
AN IMPORTANT FACTOR IS THEIMPROVEMENT IN HOUSEHOLD WEALTH                              22
AND HOUSEHOLDS HAVE REDUCED DEBT                    BIG QUESTION:                   ARE WE THERE YET?                     ...
HOME PRICES HAVE STOPPED DECLINING                                 24
HOME INVENTORIES HAVE DROPPED     (MONTHS TO SELL EXISTING INVENTORY)                                           25
AND SOME OPTIMISM FROM IMPROVED HOME      SALES AND CONSTRUCTION   (sales are of existing units and permits for planned un...
TOTAL INFLATION HAS BEEN VOLATILE, BUT TAME           (CPI, total, annual % chg.)                                         ...
GAS PRICE TRENDS                   28
THE “BITE” FROM GAS PRICES HAS BEEN INCREASING – BUT NOT YET A RECORD     (GAS SPENDING AS A % OF TOTAL SPENDING)         ...
FUNDAMENTAL ISSUE – OIL DEMANDINCREASING FASTER THAN OIL SUPPLY (WORLD CONDITIONS, MILLIONS OF BARRELS PER DAY)           ...
COULD RISING GAS PRICES DERAIL THE RECOVERY?            EVERY 10 CENT RISE              IN GAS PRICE              REDUCES ...
INTEREST RATES CONTINUE AT HISTORIC LOWS         (YIELDS ON TREASURY SECURITIES)                                          ...
THE “TRI-FECTA” OF IMPROVEMENT             BETTER HOUSING               MARKET             BETTER HOUSEHOLD               ...
NATIONAL FORECASTS       200,000 – 250,000 JOBS CREATED         PER MONTH       2.0% TO 2.5% GDP GROWTH RT       CONSUMERS...
KEY ECONOMIC POLICY ISSUES       DEBATE OVER LONG RUN         FISCAL PLAN         *   tax rates         *   “tax expenditu...
GOVERNMENT POLICY                    36
The Fed’s Monetary Policy                            37
FISCAL POLICY HAS ADDED TO THE DEBT            (% of GDP)                                      38
GOVERNMENT CYCLICAL POLICY QUESTIONS           For monetary policy:            - creating another “bubble”?            - c...
FIVE BIG STRUCTURAL ISSUES         GLOBALIZATION AND SKILLS         DEMOGRAPHY AND PUBLIC           SPENDING         EFFIC...
NORTH CAROLINA ECONOMY                         41
USING GDP, NC’S ECONOMY HAS RECENTLYACCELERATED FASTER THAN THE NATION’S                                   42
NC’s ECONOMIC RIDE IS BUMPIER(% CHANGE IN SEAS. ADJ. NON-FARM EMPLOYMENT)                                               43
Metro NC Job Gains Since Bottom of Recession              (seasonally-adjusted)     Charlotte              7.2%     Raleig...
45
NC ECONOMIC FORECAST FOR 2013BETTER GROWTH  80,000 – 90,000   JOBS CREATED  8.2% JOBLESS    RATE BY YEAR’S    END         ...
LONGER-RUN NORTH CAROLINA GROWTH PROSPECTS                 MANUFACTURING REVIVAL                 CONSTRUCTION SURGE       ...
PUBLIC ISSUES FOR N.C.’s LEADERSTAX “REFORM”TECH TRAINING$ FOR ROADS – WHERE?MEDICAID                                     48
Aaron Nelson, President and CEO2013 ECONOMIC CONDITIONSSURVEY RESULTS
How has the recession affected your organization?60%               56%        50%                        49%      52%50%  ...
Has the current economic environment negatively affected     your plans for growth over the next 12 months? 80%           ...
Which answer most closely matches your current perception of    the economic environment over the next 12 months?    Envir...
Do you have plans to increase or reduce your           workforce in the next 12 months?70%                     58.9%    58...
If you could change one thing locally- other than general economic conditions – to                 help your organization ...
Master Gold Sponsors
Master Gold Sponsors
Thank you for attending the 2013  Economic Outlook Briefing!          See what’s coming up             at the Chamber     ...
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
2013 Economic Outlook Briefing
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2013 Economic Outlook Briefing

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  • FOR 2001, COMPARING 2001 IV TO 2001 I; AND 2004 II TO 2001 IVFOR 2007-09 COMPARING 2009 II TO 2007 IV; AND 2011 IV TO 2009 II
  • Seasonally adjusted annualized monthly rates
  • www.bea.gov;
  • IEA Oil Market Report, 10, Feb 2012omrpublic.iea.org/balances.asp - then click on “quarterly world balance”
  • WWW.BEA.GOV SQ6N, COMPENSATION OF EMPLOYEES
  • For US: Feb 2001-Aug 2003; Aug 2003-Jan 2008; Jan 2008-Feb 2010; Feb 2010-latestFor NC: Jan 2001-Jul 2003; Jul 2003-Feb 2008; Feb 2008-Feb 2010; Feb 2010-latest
  • 2013 Economic Outlook Briefing

    1. 1. If you’re tweeting this event, use #EOB13 as a hashtag
    2. 2. Chris Barnes, Vice Chair PNC Bank
    3. 3. Master Gold Sponsors
    4. 4. Master Gold Sponsors
    5. 5. Justin PurdyTime Warner Cable Business Class
    6. 6. Dr. Michael WaldenWilliam Neal Reynolds Distinguished Professor North Carolina State University
    7. 7. ECONOMIC OUTLOOK:ARE HAPPIER DAYS HERE? Dr. Mike Walden Reynolds Distinguished Professor North Carolina State University 14
    8. 8. USEFUL TO THINK OF ECONOMIC ISSUES IN TWO PARTS1. SHORT-RUN “CYCLICAL” ISSUE RELATED TO THE RECESSION AND RECOVERY2. LONG-RUN “STRUCTURAL” ISSUES RELATED TO OUR ECONOMIC PATH FOR NEXT 50 TO 75 YEARS 15
    9. 9. AGGREGATE PRODUCTIONHAS TOTALLY RECOVERED 16
    10. 10. THE JOB MARKET IS ALSO COMING BACK 17
    11. 11. MANUFACTURING HAS BEEN A BIG PLUS 18
    12. 12. ….. AS HAVE EXPORTS billions of real 2005 $ 19
    13. 13. BANK LOANS HAVE ALSO INCREASED (BILLIONS OF DOLLARS) 20
    14. 14. AND CONSUMERS ARE SPENDING MORE (INFLATION-ADJUSTED PERCENTAGE CHANGES) 21
    15. 15. AN IMPORTANT FACTOR IS THEIMPROVEMENT IN HOUSEHOLD WEALTH 22
    16. 16. AND HOUSEHOLDS HAVE REDUCED DEBT BIG QUESTION: ARE WE THERE YET? 23
    17. 17. HOME PRICES HAVE STOPPED DECLINING 24
    18. 18. HOME INVENTORIES HAVE DROPPED (MONTHS TO SELL EXISTING INVENTORY) 25
    19. 19. AND SOME OPTIMISM FROM IMPROVED HOME SALES AND CONSTRUCTION (sales are of existing units and permits for planned units) 26
    20. 20. TOTAL INFLATION HAS BEEN VOLATILE, BUT TAME (CPI, total, annual % chg.) 27
    21. 21. GAS PRICE TRENDS 28
    22. 22. THE “BITE” FROM GAS PRICES HAS BEEN INCREASING – BUT NOT YET A RECORD (GAS SPENDING AS A % OF TOTAL SPENDING) 29
    23. 23. FUNDAMENTAL ISSUE – OIL DEMANDINCREASING FASTER THAN OIL SUPPLY (WORLD CONDITIONS, MILLIONS OF BARRELS PER DAY) 30
    24. 24. COULD RISING GAS PRICES DERAIL THE RECOVERY? EVERY 10 CENT RISE IN GAS PRICE REDUCES GDP GROWTH RATE BY 0.2% GAS PRICE ABOVE $5/GALLON WOULD STALL THE RECOVERY 31
    25. 25. INTEREST RATES CONTINUE AT HISTORIC LOWS (YIELDS ON TREASURY SECURITIES) 32
    26. 26. THE “TRI-FECTA” OF IMPROVEMENT BETTER HOUSING MARKET BETTER HOUSEHOLD NET WORTH MORE JOBS 33
    27. 27. NATIONAL FORECASTS 200,000 – 250,000 JOBS CREATED PER MONTH 2.0% TO 2.5% GDP GROWTH RT CONSUMERS SPENDING MORE DELEVERAGING ALMOST COMPLETE WILDCARD – ENERGY PRICES AND POTENTIAL MIDEAST CONFLICT 34
    28. 28. KEY ECONOMIC POLICY ISSUES DEBATE OVER LONG RUN FISCAL PLAN * tax rates * “tax expenditures” * entitlements * defense 35
    29. 29. GOVERNMENT POLICY 36
    30. 30. The Fed’s Monetary Policy 37
    31. 31. FISCAL POLICY HAS ADDED TO THE DEBT (% of GDP) 38
    32. 32. GOVERNMENT CYCLICAL POLICY QUESTIONS For monetary policy: - creating another “bubble”? - creating more inflation? - exit strategy? For fiscal policy: - more stimulus needed? - long run fiscal plan needed? - or austerity needed? 39
    33. 33. FIVE BIG STRUCTURAL ISSUES GLOBALIZATION AND SKILLS DEMOGRAPHY AND PUBLIC SPENDING EFFICIENT PUBLIC REVENUE COLLECTION INFRASTRUCTURE UPGRADING ENERGY TRANSITION 40
    34. 34. NORTH CAROLINA ECONOMY 41
    35. 35. USING GDP, NC’S ECONOMY HAS RECENTLYACCELERATED FASTER THAN THE NATION’S 42
    36. 36. NC’s ECONOMIC RIDE IS BUMPIER(% CHANGE IN SEAS. ADJ. NON-FARM EMPLOYMENT) 43
    37. 37. Metro NC Job Gains Since Bottom of Recession (seasonally-adjusted) Charlotte 7.2% Raleigh-Cary 6.4% Burlington 5.4% Durham-CH 5.1% Asheville 4.6% Greensboro-HP 3.7% Rocky Mount 3.6% Fayetteville 3.6% Hickory 2.6% Jacksonville 2.5% Goldsboro 2.1% Winston-Salem 1.6% Greenville 1.3% Wilmington 0.0% 44
    38. 38. 45
    39. 39. NC ECONOMIC FORECAST FOR 2013BETTER GROWTH 80,000 – 90,000 JOBS CREATED 8.2% JOBLESS RATE BY YEAR’S END 46
    40. 40. LONGER-RUN NORTH CAROLINA GROWTH PROSPECTS MANUFACTURING REVIVAL CONSTRUCTION SURGE EDUCATION “BUMPER CROP” RETIREE INFLUX 400,000 NET NEW JOBS BY 2017 47
    41. 41. PUBLIC ISSUES FOR N.C.’s LEADERSTAX “REFORM”TECH TRAINING$ FOR ROADS – WHERE?MEDICAID 48
    42. 42. Aaron Nelson, President and CEO2013 ECONOMIC CONDITIONSSURVEY RESULTS
    43. 43. How has the recession affected your organization?60% 56% 50% 49% 52%50% 44% 39% 39%40% 31%30%20% 17% 12%10% 6% 5% 0% Q4 2008 Q2 2009 Q1 2012 Q1 2013 Negatively Not Much Positively
    44. 44. Has the current economic environment negatively affected your plans for growth over the next 12 months? 80% 75.0% 70% 53.3% 60% 55.6% 49.5% 50.5% 44.4% 46.7% 50% 40% YES 30% 25.0% NO 20% 10% 0% Q4 2008 Q2 2009 Q1 2012 Q1 2013
    45. 45. Which answer most closely matches your current perception of the economic environment over the next 12 months? Environment is improving and I 69.0% expect my organization to do well 66.3%Environment will stay the same and I 23.9%do not expect to improve or decline 24.7%Environment is declining and expect 7.0% my organization to contract 7.9% Packing it up 0.0% 1.1% 0% 20% 40% 60% 80% Q1 2013 Q1 2012
    46. 46. Do you have plans to increase or reduce your workforce in the next 12 months?70% 58.9% 58.9%60%50% 39.7% 35.8%40%30%20% 14.0% 5.3%10% 0% Add workers No reduction or Reduce Workforce addition Q1 2012 Q1 2013
    47. 47. If you could change one thing locally- other than general economic conditions – to help your organization thrive, what would it be?
    48. 48. Master Gold Sponsors
    49. 49. Master Gold Sponsors
    50. 50. Thank you for attending the 2013 Economic Outlook Briefing! See what’s coming up at the Chamber at carolinachamber.org/events

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