2014 Economic Outlook Briefing
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2014 Economic Outlook Briefing

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Mark Vitner, managing director and senior economist at Wells Fargo, keynoted the 2014 Economic Outlook Briefing, describing trends and the latest economic issues facing the nation and the region.

Mark Vitner, managing director and senior economist at Wells Fargo, keynoted the 2014 Economic Outlook Briefing, describing trends and the latest economic issues facing the nation and the region.

Based in Charlotte, Vitner writes for the company’s Monthly Economic Outlook report, the Weekly Economic & Financial Commentary, and also provides regular updates on the housing markets, commercial real estate, regional economies, and inflation. Vitner’s commentary has been featured in the New York Times, Wall Street Journal, and Bloomberg, among other publications.

In addition to Vitner’s economic forecast, briefing attendees heard the results of the Chamber’s annual Economic Conditions Survey, an online survey that gauges our community’s thoughts on the current economy based on Chamber member response.

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2014 Economic Outlook Briefing 2014 Economic Outlook Briefing Presentation Transcript

  • 2014 Economic Outlook Briefing Tweeting? Use #EOB14
  • Chris Barnes Chair, Chapel Hill-Carrboro Chamber of Commerce Board of Directors
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  • Mark Vitner Managing Director and Senior Economist
  • U.S. & N.C. Economic Outlook: What’s Ahead for 2014 Mark Vitner, Managing Director & Senior Economist March 13, 2014
  • Economic Outlook 11 Key Macroeconomic Trends Less Uncertainty  Deals on the federal budget and debt ceiling, along with the uneventful start of Fed tapering have removed some of the uncertainty hanging over the economy. Slower Growth in the Near-term  Despite stronger GDP growth during the second half of 2013, we expect economic growth to slow during the first half of 2014 and remain below its long-run trend. Expectations have been reset lower. Unconventional Monetary Policy  QE has boosted asset prices more than it has the economy’s underlying fundamentals. Income and wealth inequality remain potent issues. Global Economy  Despite rumblings in some developing economies, the global economic outlook remains positive, with global growth expected to improve in 2014. Growth is Uneven  Energy and technology have been two notable bright spots in this otherwise disappointing economic recovery.
  • Economic Outlook 12 -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 2000 2002 2004 2006 2008 2010 2012 2014 U.S. Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDP - CAGR: Q4 @ 3.2% GDP - Yr/Yr Percent Change: Q4 @ 2.7% Forecast U.S. GDP After a surprisingly strong second half of 2013, real GDP growth will likely decelerate during the first half of 2014. Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
  • Economic Outlook 1313 Manufacturing Manufacturing activity is cooling off as business strive to reduce inventories. Source: ISM, Census and Wells Fargo Securities, LLC Capital Goods OrdersISM 30 35 40 45 50 55 60 65 30 35 40 45 50 55 60 65 87 89 91 93 95 97 99 01 03 05 07 09 11 13 ISM Manufacturing Composite Index Diffusion Index ISM Manufacturing Index: Jan @ 51.3 12-Month Moving Average: Jan @ 53.8 -60% -40% -20% 0% 20% 40% -60% -40% -20% 0% 20% 40% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Nondefense Capital Goods Orders, Ex-Aircraft Seasonally Adjusted, 3-Month Moving Averages 3-Month Annual Rate: Dec @ 3.2% Year/Year Percent Change: Dec @ 6.0%
  • Economic Outlook 1414 Consumer Rising stock prices have helped bolster household finances at a time when real incomes are barely growing. Rising asset prices have helped bolster economic activity at the upper end. Conditions for the vast middle remain bogged down by sluggish wage and salary growth. Source: U.S. Department of Commerce, Conference Board and Wells Fargo Securities, LLC Personal IncomeHousehold Wealth $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 Household Assets Trillions of Dollars Financial Assets: Q3 @ $63.9 Trillion Household Real Estate Holdings: Q3 @ $19.0 Trillion Other Tangible Assets: Q3 @ $8.0 Trillion -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 92 94 96 98 00 02 04 06 08 10 12 PI vs. PI Less Transfer Payments Year-over-Year Percent Change, 3-Month Moving Average PI Less Transfer Payments: Dec @ 0.4% Personal Income: Dec @ 1.6%
  • Client/Prospect Name Percent change in Personal Income Q3 2012-Q3 2013 KS 4.8 SD 8.6 OH 3.8 WI 4.4 IL 3.5 NE 3.9 MO 4.0 IA 4.6 MI 4.0 IN 2.2 MN 2.8 ND 6.5 ID 4.8 AZ 4.5 MT 4.1 NV 4.3 CO 4.8 CA 3.4 UT 5.2 NM 2.9 WA 4.1 OR 4.1 WY 3.8 AK 2.2 HI 4.1 ME 3.0 NH 3.7 PA 3.1 VT 4.2 NY 3.0 CT 3.5 MA 3.5 NJ 3.3 RI 3.3 AR 3.5 AL 3.6 MS 4.6 OK 4.8 GA 3.6 FL 4.1 LA 2.1 VA 2.4 TX 4.9 NC 3.2 KY 3.1 TN 3.0 WV 2.8 SC 3.0 DE 5.4 MD 2.4 DC 3.2 U.S. = 3.6% Greater than 4.5% Less than 3% 4.1%–4.5% 3.6%–4.0% 3.0%–3.5% WEST MIDWEST NORTHEAST SOUTH PACIFIC PACIFIC
  • Economic Outlook 1616 Consumer Job growth holds the key to improvements in consumer confidence. Source: Conference Board , U.S. Department of Commerce and Wells Fargo Securities, LLC Consumer ConfidenceHires v. Unemployment Claims 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 3.5 3.8 4.1 4.4 4.7 5.0 5.3 5.6 5.9 2001 2002 2003 2004 2005 2006 2008 2009 2010 2011 2012 2013 Thousands Thousands Hires v. Unemployment Claims 3-Month Moving Average, Millions Hires: Dec @ 4.48M (Left Axis) Initial Unemployment Claims: Feb @ 0.3M (Right Axis) 20 40 60 80 100 120 140 160 20 40 60 80 100 120 140 160 87 89 91 93 95 97 99 01 03 05 07 09 11 13 Consumer Confidence Index Conference Board Confidence Yr/Yr % Chg: Jan @ 38.1% Confidence: Jan @ 80.7 12-Month Moving Average: Jan @ 75.1
  • Economic Outlook 1717 FOMC Most FOMC members currently expect short-term interest rates to remain on hold until 2015. We expect Fed communications on interest rate policy to shift over the course of this year. Source: Federal Reserve Board and Wells Fargo Securities, LLC Target Fed Funds RateTiming of Firming 0 2 4 6 8 10 12 14 16 0 2 4 6 8 10 12 14 16 2014 2015 2016 Appropriate Timing of Policy Firming Number of Participants December Release September Release 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Appropriate Pace of Policy Firming Target Federal Funds Rate at Year-End September Projection December Projection 2014 2015 2016 Longer Run
  • Economic Outlook 1818 Housing Market Metrics Despite some recent setbacks, we continue to look for a gradual recovery in homebuilding. Apartments are playing a larger role than in previous building cycles. Source: U.S. Department of Commerce, CoreLogic Case Shiller and Wells Fargo Securities, LLC Home PricesHousing Starts 0.0 0.3 0.6 0.9 1.2 1.5 1.8 2.1 2.4 0.0 0.3 0.6 0.9 1.2 1.5 1.8 2.1 2.4 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 Thousands Housing Starts Millions of Units Multifamily Starts Multifamily Forecast Single-family Starts Single-family Forecast Forecast 62% 63% 64% 65% 66% 67% 68% 69% 70% -24% -18% -12% -6% 0% 6% 12% 18% 24% 88 90 92 94 96 98 00 02 04 06 08 10 12 S&P Case-Shiller National Home Price Index vs. Homeownership Rate National Home Price Index: Q3 @ 11.2% (Left Axis) Homeownership Rate: Q4 @ 65.2% (Right Axis)
  • Economic Outlook 1919 Small Business Confidence Small businesses remain cautious but recent surveys show some improvement. View on capital spending and hiring continue to gradually trend higher. Source: Gallup, Wells Fargo Bank and Wells Fargo Securities, LLC Capital Spending GapSmall Business Confidence -40 -20 0 20 40 60 -40 -20 0 20 40 60 04 05 06 07 08 09 10 11 12 13 14 Wells Fargo Small Business Survey Present Situation Present Situation: Q1 @ 16 -40 -30 -20 -10 0 10 20 30 -40 -30 -20 -10 0 10 20 30 03 04 05 06 07 08 09 10 11 12 13 Capital Spending Allotment Gap Difference Between "Increase" and "Decrease" Over Past 12 Mo. Allocated Capital Spending Gap: Q1 @ -1
  • Economic Outlook 2020 North Carolina – Labor Market North Carolina’s unemployment rate has fallen markedly over the past year. Source: U.S. Department of Labor and Wells Fargo Securities, LLC UnemploymentEmployment December 2013 -4% -2% 0% 2% 4% 6% 8% 10% Information Other Services Construction Financial Activities Leisure and Hospitality Manufacturing Prof. & Bus. Svcs. Educ. & Health Services Government Trade, Trans. & Utilities Total Nonfarm North Carolina Employment Growth By Industry Year-over-Year Percent Change, 3-MMA Number of Employees Less More 2% 4% 6% 8% 10% 12% 2% 4% 6% 8% 10% 12% 90 92 94 96 98 00 02 04 06 08 10 12 14 North Carolina vs. U.S. Unemployment Rate Seasonally Adjusted Unemployment Rate: Dec @ 6.9% United States: Jan @ 6.6%
  • Economic Outlook 21 Construction Information Prof. & Bus. Svcs. Educ. & Health Svcs. Leisure and Hospitality Financial Activities Trade, Trans. & Utilites Manufacturing Government Other Services -6% -4% -2% 0% 2% 4% 6% -4% -2% 0% 2% 4% 6% 8% 10% 3-MonthAnnualizedPercentChange Year-over-Year Percent Change North Carolina Employment Growth by Industry 3-Month Moving Averages, December 2013 Percent of Total Employees 10% to 20% 5 % to 10% Less than 5% Recovering Expanding Contracting Decelerating North Carolina Source: U.S. Department of Labor and Wells Fargo Securities, LLC
  • Economic Outlook 22 Raleigh-Cary Winston-Salem Hickory Fayetteville Charlotte Durham-Chapel Hill Asheville Burlington Greensboro Wilmington Greenville Jacksonville Rocky Mount Goldsboro -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% -2% -1% 0% 1% 2% 3% 4% 3-MonthAnnualizedPercentChange Year-over-Year Percent Change North Carolina Employment Growth 3-Month Moving Averages, December 2013 Population 500 Thousand + 200 - 500 Thousand 100 - 200 Thousand Recovering Expanding Contracting Decelerating North Carolina Source: U.S. Department of Labor and Wells Fargo Securities, LLC
  • Economic Outlook 2323 North Carolina With steady population growth, residential construction is slowly regaining strength Source: U.S. Department of Commerce and Wells Fargo Securities, LLC Housing PermitsPopulation 0 40 80 120 160 200 240 0 40 80 120 160 200 240 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 North Carolina Population Growth In Thousands 0 20 40 60 80 100 120 0 20 40 60 80 100 120 90 92 94 96 98 00 02 04 06 08 10 12 14 Thousands Thousands North Carolina Housing Permits Thousands of Permits, Seasonally Adjusted Annual Rate Single-Family: Jan @ 29,700 Single-Family, 12-MMA: Jan @ 34,531 Multifamily, 12-MMA: Jan @ 14,357 Single-Family Average (1998-2003): 62,968
  • Economic Outlook 2424 Durham-Chapel Hill – Labor Market Employment gains have been seen across most sectors. Source: U.S. Department of Labor and Wells Fargo Securities, LLC UnemploymentEmployment -4% -2% 0% 2% 4% 6% 8% 10% 12% Information Nat. Res. & Construction Other Services Financial Activities Leisure and Hospitality Manufacturing Trade, Trans. & Utilities Prof. & Bus. Svcs. Educ. & Health Services Government Total Nonfarm Durham-Chapel Hill MSA Employment Growth By Industry Number of Employees Less More Year-over-Year Percent Change, 3-MMA December 2013 0% 2% 4% 6% 8% 10% 0% 2% 4% 6% 8% 10% 91 93 95 97 99 01 03 05 07 09 11 13 Durham-Chapel Hill MSA Unemployment Rate Unemployment Rate: Dec @ 5.4% 12-Month Moving Average: Dec @ 6.5% Seasonally Adjusted
  • Economic Outlook 2525 Durham-Chapel Hill– Housing Market The multifamily sector has led Durham-Chapel Hill's housing recovery, though the single family market is still well below historical norms. Prices are slowly bouncing back but don’t have far to go before reaching prerecession highs. Source: U.S. Department of Commerce, CoreLogic and Wells Fargo Securities, LLC Housing PermitsHome Prices 40 60 80 100 120 140 160 180 200 40 60 80 100 120 140 160 180 200 90 92 94 96 98 00 02 04 06 08 10 12 14 CoreLogic Home Price Index: Durham-Chapel Hill, NC Index, 2000=100, Not Seasonally Adjusted Durham-Chapel Hill, NC: Jan @ 137.9 United States: Jan @ 165.0 0 1 2 3 4 5 6 0 1 2 3 4 5 6 90 92 94 96 98 00 02 04 06 08 10 12 14 Thousands Thousands Durham-Chapel Hill MSA Housing Permits Single-Family: Jan @ 1,836 Single-Family, 12-MMA: Jan @ 1,988 Multifamily, 12-MMA: Jan @ 1,744 Single-Family Average (1998-2003): 3,515 Thousands of Permits, Seasonally Adjusted Annual Rate
  • Economic Outlook 2626 Raleigh-Cary – Labor Market The employment situation in Raleigh-Cary may be slightly understated, and the unemployment rate continues to fall. Source: U.S. Department of Labor and Wells Fargo Securities, LLC UnemploymentEmployment -6% -4% -2% 0% 2% 4% 6% 8% -6% -4% -2% 0% 2% 4% 6% 8% 91 93 95 97 99 01 03 05 07 09 11 13 Raleigh-Cary MSA Nonfarm Employment QCEW: Yr/Yr Pct. Change: Jun @ 2.7% Nonfarm: Yr/Yr Pct. Change: Dec @ 2.2% Household: Yr/Yr Pct. Change: Dec @ 0.9% 3-Month Moving Averages 0% 2% 4% 6% 8% 10% 0% 2% 4% 6% 8% 10% 91 93 95 97 99 01 03 05 07 09 11 13 Raleigh-Cary MSA Unemployment Rate Unemployment Rate: Dec @ 5.7% 12-Month Moving Average: Dec @ 6.9% Seasonally Adjusted
  • Economic Outlook 2727 Raleigh-Cary – Housing Market Raleigh-Cary's housing market continues to post solid gains with home prices nearing their prerecession peak. However, a surge in multifamily homebuilding has been followed by pullback recently. Source: U.S. Department of Commerce, CoreLogic and Wells Fargo Securities, LLC Housing PermitsHome Prices 40 60 80 100 120 140 160 180 200 220 40 60 80 100 120 140 160 180 200 220 90 92 94 96 98 00 02 04 06 08 10 12 14 CoreLogic Home Price Index: Raleigh-Cary, NC Index, 2000=100, Not Seasonally Adjusted United States: Jan @ 165.0 Raleigh-Cary, NC: Jan @ 128.6 0 5 10 15 20 0 5 10 15 20 90 92 94 96 98 00 02 04 06 08 10 12 Thousands Thousands Raleigh-Cary MSA Housing Permits Single-Family: Jan @ 7,380 Single-Family, 12-MMA: Jan @ 8,029 Multifamily, 12-MMA: Jan @ 3,640 Single-Family Average (1998-2003): 10,453 Thousands of Permits, Seasonally Adjusted Annual Rate
  • Economic Outlook 28 China Slowdown Drought in the Western States Credit Availability & Financial Reform Manufacturing Competitiveness Geopolitical Events Deleveraging Immigration Reform Energy/Commodity Price Swings Issues to Watch
  • Economic Outlook 29 Our Forecast Wells Fargo U.S. Economic Forecast 2011 2012 2013 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Real Gross Domestic Product 1 1.1 2.5 4.1 2.4 1.0 2.7 2.9 3.1 1.8 2.8 1.9 2.4 3.1 Personal Consumption 2.3 1.8 2.0 2.6 2.8 2.3 2.3 2.4 2.5 2.2 2.0 2.4 2.5 Inflation Indicators 2 PCE Deflator 1.4 1.1 1.1 1.0 1.1 1.5 1.4 1.7 2.4 1.8 1.1 1.4 1.9 Consumer Price Index 1.7 1.4 1.5 1.2 1.4 1.8 1.8 2.0 3.1 2.1 1.5 1.7 2.1 Industrial Production 1 4.1 1.2 2.5 5.5 1.6 6.0 5.1 4.3 3.4 3.6 2.6 3.8 4.9 Corporate Profits Before Taxes 2 2.1 4.5 5.7 5.0 4.1 5.4 5.5 5.6 7.9 7.0 4.3 5.2 5.9 Trade Weighted Dollar Index 3 76.2 77.5 75.2 76.4 76.8 77.5 78.3 78.8 70.9 73.5 75.9 77.8 79.4 Unemployment Rate 7.7 7.5 7.2 7.0 6.6 6.5 6.4 6.3 8.9 8.1 7.4 6.5 6.1 Housing Starts 4 0.96 0.87 0.88 1.02 0.95 1.04 1.10 1.16 0.61 0.78 0.93 1.07 1.22 Quarter-End Interest Rates 5 Federal Funds Target Rate 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.44 Conventional Mortgage Rate 3.57 4.07 4.49 4.46 4.60 4.76 4.83 4.98 4.46 3.66 3.98 4.79 5.23 10 Year Note 1.87 2.52 2.64 3.04 2.90 3.10 3.15 3.33 2.78 1.80 2.35 3.12 3.69 Forecast as of: March 12, 2014 1 Compound Annual Growth Rate Quarter-over-Quarter 2 Year-over-Year Percentage Change 3 Federal Reserve Major Currency Index, 1973=100 - Quarter End 4 Millions of Units 5 Annual Numbers Represent Averages 2014 ForecastActualForecastActual 2013
  • Appendix
  • Economic Outlook 31 Recent Special Commentary Wells Fargo Economics Group Publications To view any of our past research please visit: http://www.wellsfargo.com/ economics To join any of our research distribution lists please visit: http://www.wellsfargo.com/ economicsemail Date Title Authors March-06 Divergence in Consumer Confidence and Spending Alemán, Brown & Zachary March-06 What Inventories Giveth… Quinlan & House March-06 Is the Fed Funds Target Rate Effective? Silvia, Iqbal & Zachary March-05 Growth: Defining Top Line Economic Opportunites as Fundamental Inputs to Decision Makers Silvia March-05 California Economic Outlook: February 2014 Vitner, Wolf & Miller March-03 Some Potential Economic Implications of the Ukrainian Crisis Bryson March-03 Indian GDP Continued to Grow in Q4, but at a Sub-Par Pace Bryson February-28 Swedish Economy Solid But Not as Robust as Q4 GDP Suggests Bryson February-28 An Inventory Story: Why Canadian GDP Is Not All Good News Quinlan February-28 Housing Data Wrap-Up: February 2014 Vitner & Khan February-28 Does Deflation Threaten the Eurozone? Bryson, Iqbal & Miller February-27 Strong Imports Weigh on Swiss GDP Growth in Q4 Bryson February-27 Brazilian Economy Avoided a Recession, Surprised Markets Alemán February-25 Florida's Consumer Sentiment Sits Tight Vitner & Wolf February-21 Mexican Economy in 2013: A Year To Forget Alemán February-18 Consumer Loan Vortex, but Underlying Data More Soothing Silvia & Zachary February-18 Growth in Peru Remained Strong in 2013 Alemán February-17 Southern States: 2014 Economic Outlook Vitner,Wolf & Miller February-17 Japanese GDP Growth Falls Flat; Details More Encouraging Quinlan February-17 Predicting the Probability of Inflation/Deflation: An Ordered Probit Approach Silvia, Iqbal & Zachary February-14 Modest Recovery in the Eurozone Continued in Q4 Bryson February-13 Should Developing Economics Worry Us? Part II Bryson, Alemán & Griffiths February-10 Inflation Chartbook: February 2014 Bullard & House February-07 Natural Gas Prices Pose Only Small Challenge to Consumers House & Brown February-05 What's Next for Argentina After the Devaluation? Aleman February-05 Brazilian Industrial Production Took a Nosedive in December Aleman February-03 Charlotte Metro Area: A Delicate Balance Silvia & Brown February-03 The Russian Economy Slows Down Considerable in 2013 Aleman January-29 California's Recovery Remains Solidly On Track Vitner & Wolf January-29 FOMC: Improving Economy, Low Inflation, Tapering Persists Silvia January-29 Should Developing Economies Worry Us? Bryson January-29 Florida's Economy Continues to Heat Up Vitner & Miller January-29 Taiwan Enjoyed Modest, But Broad-Based, Growth in Q4 Bryson January-28 Texas Keeps on Truckin' Vitner & Wolf January-28 British Economy Continues to Post Solid Growth Bryson January-27 Is the European Sovereign Debt Crisis Solved? Bryson & Miller January-27 Mexican Economy Continued to Struggle Late in 2013 Aleman January-24 Argentina Is in the News Again Aleman January-24 Are U.K. Rate Hikes in the Cards? Bryson January-23 The "Unsustainable" Path of Federal Fiscal Policy: Part IV Silvia & Brown A Sampling of Our Recent Special, Regional & Industry Commentary
  • Client/Prospect Name Wells Fargo Securities, LLC Economics Group 32 John E. Silvia … ....................... … john.silvia@wellsfargo.com Global Head of Research and Economics Diane Schumaker-Krieg ………………… ……….diane.schumaker@wellsfargo.com Global Head of Research & Economics Chief Economist Mark Vitner, Senior Economist……………....………. . .mark.vitner@wellsfargo.com Jay H. Bryson, Global Economist …………………....…… ….jay.bryson@wellsfargo.com Sam Bullard, Senior Economist sam.bullard@wellsfargo.com Nick Bennenbroek, Currency Strategist ……nicholas.bennenbroek@wellsfargo.com Eugenio J. Alemán, Senior Economist… ………….eugenio.j.aleman@wellsfargo.com Anika R. Khan, Senior Economist … . anika.khan@wellsfargo.com Senior Economists Zachary Griffiths, Economic Analyst zachary.griffiths@wellsfargo.com Mackenzie Miller, Economic Analyst mackenzie.miller@wellsfargo.com Blaire Zachary, Economic Analyst blaire.a.zachary@wellsfargo.com Economists Azhar Iqbal, Econometrician………………… ……………azhar.iqbal@wellsfargo.com Tim Quinlan, Economist …………………… ……………..tim.quinlan@wellsfargo.com Eric J. Viloria, Currency Strategist eric.viloria@wellsfargo.com Michael A. Brown, Economist ……………… … michael.a.brown@wellsfargo.com Sarah Watt House, Economist …………… …………sarah.house@wellsfargo.com Michael T. Wolf, Economist ………………… … .michael.t.wolf@wellsfargo.com Economic Analysts Administrative Assistants Wells Fargo Securities Economics Group publications are produced by Wells Fargo Securities, LLC, a U.S broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Securities Investor Protection Corp. Wells Fargo Securities, LLC, distributes these publications directly and through subsidiaries including, but not limited to, Wells Fargo & Company, Wells Fargo Bank N.A., Wells Fargo Advisors, LLC, Wells Fargo Securities International Limited, Wells Fargo Securities Asia Limited and Wells Fargo Securities (Japan) Co. Limited. Wells Fargo Securities, LLC. (“WFS”) is registered with the Commodities Futures Trading Commission as a futures commission merchant and is a member in good standing of the National Futures Association. Wells Fargo Bank, N.A. (“WFBNA”) is registered with the Commodities Futures Trading Commission as a swap dealer and is a member in good standing of the National Futures Association. WFS and WFBNA are generally engaged in the trading of futures and derivative products, any of which may be discussed within this publication. The information and opinions herein are for general information use only. Wells Fargo Securities, LLC does not guarantee their accuracy or completeness, nor does Wells Fargo Securities, LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or as personalized investment advice. Wells Fargo Securities, LLC is a separate legal entity and distinct from affiliated banks and is a wholly owned subsidiary of Wells Fargo & Company © 2014 Wells Fargo Securities, LLC. SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE Important Information for Non-U.S. Recipients For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Conduct Authority. The content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FCA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, not will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. This document and any other materials accompanying this document (collectively, the “Materials”) are provided for general informational purposes only. Peg Gavin, Executive Assistant. peg.gavin@wellsfargo.com Cyndi Burris, Senior Administrative Assistant cyndi.burris@wellsfargo.com
  • 2014 ECONOMIC CONDITIONS SURVEY RESULTS Aaron Nelson, President and CEO
  • How has the recession affected your organization? 43.6% 56.4% 39.0% 51.9% 31.6% 50.4% 38.6% 49.4% 30.7% 36.2% 6.1% 5.0% 11.6% 17.4% 31.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Q4 2008 Q2 2009 Q1 2012 Q1 2013 Q1 2014 Negatively Not Much Positively
  • Has the current economic environment negatively affected your plans for growth over the next 12 months? 55.6% 75% 49.5% 53.3% 40.4% 44.4% 25% 50.5% 46.7% 59.6% 0 10 20 30 40 50 60 70 80 Q4 2008 Q2 2009 Q1 2012 Q1 2013 Q1 2014 YES NO
  • Which answer most closely matches your current perception of the economic environment over the next 12 months? 1.1 7.9 24.7 66.3 0 7 23.9 69 0% 9.5% 31% 59.5% 0 10 20 30 40 50 60 70 80 I'm Selling and Moving Environment is declining and expect my organization to… Environment will staty the same and I do not expect to improve… Environment is improving and I expect my org to do well Q1 2014 Q1 2013 Q1 2012
  • Do you have plans to increase or reduce your workforce in the next 12 months? 35.8% 58.9% 5.3% 39.7% 58.9% 1.4% 29.8% 70.2% 0% 0 10 20 30 40 50 60 70 80 Add workers No reduction or addition Reduce Workforce Q1 2012 Q1 2013 Q1 2014
  • How do you think the Affordable Care Act will impact your business? 4.3% 19.6% 34.8% 10.9% 19.6% 10.9% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Very positively Positively No impact Negatively Very negatively Unsure or too soon to tell
  • If you could change one thing locally (other than general economic conditions) to help your organization thrive, what would it be?
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