BACI Sv forecast 2012

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BACI Sv forecast 2012

  1. 1. 12/16/11 South Bay / San Francisco Economic Forecast: 2011-2013 Bodega Bay Petaluma Marin Newark Fremont Milpitas Mountain Vie w Novato Inverness Sunnyvale Palo Alto Santa Cupertino San Jos e Saratog a Los Gatos Clara San Rafael Mill Valley Lexington Hill s Morgan Hill Tiburon San Martin Gilro y San Francisco Daly City Pacifica San Bruno Hollister Montara El Granada Redwood City Menlo Park Half Moon Bay Atherton San Woodside Benito San Mateo Jon  Haveman   Chief  Economist,  BAC  Economic  Ins2tute   December,  2011   Unemployment Unemployment  Rate  (%,  SA)   Oct-­‐   Oct-­‐   Oct-­‐   2009   2010   2011  12   California   12.1   12.5   11.7  10   Bay  Region   Oakland  (MD)   11.3   11.2   10.1   8   San  Francisco  (MD)   10.4   10.3   9.2   6   San  Jose  (MSA)   11.7   11.0   9.7   Southern  Calif.   4   Los  Angeles   12.1   12.9   12.2   San  Diego   10.5   10.5   9.7   2   Jan-­‐90   Aug-­‐91   Mar-­‐93   Oct-­‐94   May-­‐96   Dec-­‐97   Jul-­‐99   Feb-­‐01   Sep-­‐02   Apr-­‐04   Jun-­‐07   Nov-­‐05   Jan-­‐09   Aug-­‐10   Orange  County   9.7   9.4   8.5   Oakland  (MD)   San  Francisco  (MD)   San  Jose  (MSA)   Source:  California  Employment  Development  Department   1
  2. 2. 12/16/11 Labor Markets Total  NonFarm  Employment   Peak  to   Oct-­‐   Current   2011   (%)  1,150  1,100   Inland  Empire   1,124.1   -­‐12.0  1,050   Orange  County  (MD)   1,378.0   -­‐9.7   Oakland  (MD)   947.1   -­‐9.9  1,000   Los  Angeles   5,173.8   -­‐8.4   950   CALIFORNIA   14,151.6   -­‐7.0   900   San  Diego   1,248.1   -­‐5.1   850   San  Francisco  (MD)   953.3   -­‐4.9   800   San  Jose   882.1   -­‐4.2   Jan-­‐98   Feb-­‐99   Mar-­‐00   Apr-­‐01   May-­‐02   Jun-­‐03   Jul-­‐04   Aug-­‐05   Sep-­‐06   Oct-­‐07   Dec-­‐09   Jan-­‐11   Nov-­‐08   Oakland  (MD)   San  Francisco  (MD)   San  Jose  (MSA)   Source:  California  Employment  Development  Department   Bay Employment Growth San Jose (MSA) Total  NonFarm  Employment  Growth   106   Index  =  100  at  Onset  of  Recession   104   102   100   98   96   94   92   90   88   86   84   82   80   0   6   12   18   24   30   36   42   48   54   60   Months  Since  Onset  of  Recession   1990   2001   2007   Source:  Bureau  of  Labor  StaYsYcs   2
  3. 3. 12/16/11 Bay Employment Growth San Francisco (MD) Total  NonFarm  Employment  Growth   104  Index  =  100  at  Onset  of  Recession   102   100   98   96   94   92   90   88   86   84   0   6   12   18   24   30   36   42   48   54   60   Months  Since  Onset  of  Recession   1990   2001   2007   Source:  Bureau  of  Labor  StaYsYcs   CA Employment Growth Total  NonFarm  Employment  Growth   106  Index  =  100  at  Onset  of  Recession   104   102   100   98   96   94   92   90   88   0   6   12   18   24   30   36   42   48   54   60   Months  Since  Onset  of  Recession   1990   2001   2007   Source:  Bureau  of  Labor  StaYsYcs   3
  4. 4. 12/16/11 What do we know about SB/SF Economies? South  Bay   San  Francisco   •  Technology  is  booming   •  Bus  Srvcs/tourism   •  Housing  is  picking  up  –   oriented   locally   •  Social  media     •  Biotech   Common  Aspects/Issues:   •  People   –  Highly  educated/high  income  populaUons   –  Aging   •  Business   –  Business  services  are  important   –  Venture  capital  plays  a  big  role  –  patent  heavy!   –  Significant  goods  movement  gateways   •  InUmately  linked  with  rest  of  Bay  Area     Age Related Challenges San  Jose  (MSA)  PopulaYon  Forecast   San  Francisco  (MD)  PopulaYon   by  Age   Forecast  by  Age   35   40   30   35   Percentage  of  PopulaYon   Percentage  of  PopulaYon   30   25   25   20   20   15   15   10   10   5   5   0   0   20  to  34   35  to  54   55  to  64   65  +   20  to  34   35  to  54   55  to  64   65+   2010   2020   2010   2020   •  Prime  working  age  populaUons  shrinking   •  ReUrement  age  populaUons  growing  significantly  Source:  California  Department  of  Finance   4
  5. 5. 12/16/11 Educational Opportunity Share  of  PopulaYon  with  a  Bachelors  Degree  or  Higher   for  Selected  California  CounYes,  2009     Marin   San  Francisco   Santa  Clara   San  Mateo   Alameda   Contra  Costa   Orange   San  Diego   Ventura  San  Luis  Obispo   California   Los  Angeles   Sacramento   Riverside  San  Bernardino   0   10   20   30   40   50   60   Percentage  of  PopulaYon  Source:  US  Census  Bureau   Income Median  Household  Income              for  Selected  California  CounYes,  2009   Marin   Santa  Clara   San  Mateo   Contra  Costa   Orange   Ventura   San  Francisco   Alameda   San  Diego   California  San  Luis  Obispo   Riverside   Los  Angeles   Sacramento  San  Bernardino   10,000   20,000   30,000   40,000   50,000   60,000   70,000   80,000   90,000  Source:  US  Census  Bureau   5
  6. 6. 12/16/11 Compensation per Employee $120   $100  Thousands/Year   $80   $60   $40   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   CA   San  Francisco  (MD)   Oakland  (MD)   San  Jose  (MSA)   Source:  Bureau  of  Economic  Analysis,  California  EDD   Employment by Industry San  Jose  (MSA)  Employment  by  Industry  –  October     Professional/Business   Manufacturing   EducaUon/Health   Government   Retail  Trade   Leisure  and  Hosp.   InformaUon   Wholesale  Trade   ConstrucUon   Fin.  AcUviUes   Other  Services   Transport  Warehouse   0   5   10   15   20   25   2011   %  Share  of  Total  Non-­‐Farm  Employment    Source:  California  Employment    Development  Department   6
  7. 7. 12/16/11 Employment by Industry San  Francisco  (MD)  Employment  by  Industry  –  October     Professional/Business   Government   Leisure  and  Hosp.   EducaUon/Health   Retail  Trade   Fin.  AcUviUes   InformaUon   Other  Services   Manufacturing   Transport  Warehouse   ConstrucUon   Wholesale  Trade   0   5   10   15   20   25   2011   %  Share  of  Total  Non-­‐Farm  Employment     Source:  California  Employment  Development  Department   Bay Area Employment Interlinkages Santa  Clara   San  Mateo   San  Francisco   %  of  Employed  Residents   Employed  Outside  of  County   Marin     %  of  Local  Employees  from   Outside  of  County   Contra  Costa   Alameda   0   10   20   30   40   50   60   70  Source:  U.S.  Census  Bureau,  LEHD   7
  8. 8. 12/16/11Job Moves: Santa Clara •  2  largest  job  trade   partners  are  in  Bay   Area     •  ConUguous   counUes     •  Job  moves  are   SMALL  in  #    Job Moves: San Mateo •  3  largest  job  trade   partners  are  in  Bay   Area     •  ConUguous   counUes     •  Job  moves  are   SMALL  in  #     8
  9. 9. 12/16/11 Job Moves: SF County •  4  largest  job  trade   partners  are  in  Bay   Area     •  Job  moves  are  SMALL   in  #     •  Mecklenberg??    BofA                                  (Charloge)   Employment Dynamics San   San  Jose   East  Bay   Francisco   (MSA)   San  Mateo   Job  CreaYon  (%)   -­‐  Births     54     51     52   45   -­‐  Expansions   39     44     43   44   -­‐  Moves   7   5   5   11   Total   100   100   100   100   Job  DestrucYon  (%)   -­‐  Deaths   64   60   63   62   -­‐  ContracUon   31   30   30   26   -­‐  Moves   5   10   7   12   Total   100   100   100   100  Source:  NETS  2009,  CalculaYons  by  BACEI   9
  10. 10. 12/16/11 Manufacturing Manufacturing  ProducYvity   Manufacturing  ProducYvity   San  Jose  (MSA)   San  Francisco  (MSA)   60   250   60   170   Employment   Employment  Billions  of  Dollars   Billions  of  Dollars   55   240   50   160   50   230   45   220   40   150   40   210   35   200   30   140   30   190   20   130   25   180   20   170   10   120   15   160   10   150   0   110   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   Gross  Output   Employment   Gross  Output   Employment   Source:  California  EDD,  Bureau  of  Labor  StaYsYcs   National Phenomenon Manufacturings  Share  of  Total  Employment   35   30   25   Percentage  of  Total  Nonfarm   20   15   10   5   0   1990   1992   1994   1996   1998   2000   2002   2004   2006   2008   2010   San  Francisco  (MD)   Oakland  (MD)   San  Jose  (MSA)   Michigan   California   Texas   Source:  Bureau  of  Labor    StaYsYcs   10
  11. 11. 12/16/11 Employment by Industry San  Jose  (MSA)  Employment  by  Industry,  YTD  to  Oct.     ConstrucUon   InformaUon   EducaUon/Health   Professional/Business   Total  Nonfarm   Manufacturing   Wholesale  Trade   Retail  Trade   Government   Leisure  and  Hosp.   Other  Services  Transport  Warehouse  UUl.   Fin.  AcUviUes   -­‐6   -­‐4   -­‐2   0   2   4   6   8   10   12   %  Change  (Annualized  Rate)   Source:  California  Employment     2010   2011   Development  Department   Tech Sector Growth Oct. 2009 – Oct. 2011 Total   3.8%   Computer  &  Elec  Prod  Manuf   7.8%   InformaUon   16.2%   Professional  &  Business  Srvcs   7.2%  Source:  California  Employment  Development  Department,  San  Jose  MSA   11
  12. 12. 12/16/11 Employment by Industry San  Francisco  (MD)  Employment  by  Industry,  YTD  to  Oct.     Professional/Business   ConstrucUon   Leisure  and  Hosp.   Other  Services   Total  Nonfarm   EducaUon/Health   InformaUon   Fin.  AcUviUes   Government  Transport  Warehouse  UUl.   Wholesale  Trade   Manufacturing   Retail  Trade   -­‐8   -­‐6   -­‐4   -­‐2   0   2   4   6   8   %  Change  (Annualized  Rate)   2010   2011   Source:  California  Employment     Development  Department   Airports – Passenger Flows SJO   SFO   (Seasonally  Adjusted  Trend)   (Seasonally  Adjusted  Trend)    1,200      45      2,800      800     InternaYonal  Passengers  (`000s)   DomesYc  Passengers  (`000s)   InternaYonal  Passengers  (`000s)   DomesYc  Passengers  (`000s    40      2,600      700      1,000      35      600      2,400      800      30      500      25      2,200      600      400      20      2,000      300      400      15      1,800      10      200      200      5      1,600      100      -­‐          -­‐          1,400      -­‐         Jan-­‐00   Jan-­‐02   Jan-­‐04   Jan-­‐06   Jan-­‐08   Jan-­‐10   Jan-­‐00   Oct-­‐01   Jul-­‐03   Apr-­‐05   Jan-­‐07   Jul-­‐10   Oct-­‐08   DomesUc   InternaUonal   DomesUc   InternaUonal   Source:  RITA   12
  13. 13. 12/16/11 Venture Capital CA  and  Bay  Shares  of  U.S.  Venture   Capital  to  Q3-­‐2011   60   55   Value  of  All   %  of  Total   Q3-­‐2011   Deals  (Millions)   US  VC   50   45   California   3,287   47   40  (%)   Bay  Area   2,668   38   35   30   Oakland  (MD)   196   3   25   San  Francisco  (MD)   1,554   22   20   San  Jose  (MSA)   897   13   15   Q1-­‐95   Q2-­‐96   Q3-­‐97   Q4-­‐98   Q1-­‐00   Q2-­‐01   Q3-­‐02   Q4-­‐03   Q1-­‐05   Q2-­‐06   Q3-­‐07   Q4-­‐08   Q1-­‐10   Q2-­‐11   United  States   6,952   Bay   California   Source:  PriceWaterhouseCoopers  MoneyTree   Venture Capital Top 10 VC Investments of 2011 in San Jose (MSA) Amount     Company   City   ($  Millions)   Industry   Electronics   PlasUc  Logic  Ltd.   Mountain  View   200   InstrumentaUon   PalanUr  Technologies  Inc.   Palo  Alto   118   Solware   Tabula  Inc.   Santa  Clara   108   Semiconductors   Coupons.com  Inc.   Mountain  View   100   Media  and  Entertainment   SoloPower  Inc.   San  Jose   79   Industrial  Energy   Alta  Devices  Inc.   Santa  Clara   72   Biotechnology   Medical  Devices  and   Intrapace  Inc.   Mountain  View   61   Equipment   CardioDX  Inc.   Palo  Alto   58   Biotechnology   iControl  Networks  Inc.   Palo  Alto   52   Solware   Flipboard  Inc.   Palo  Alto   50   Media  and  Entertainment   Source:  PriceWaterhouseCoopers  MoneyTree   13
  14. 14. 12/16/11 Venture CapitalTop 10 VC Investments of 2011 in SF (MSA) Amount     Company   City   ($  Millions)   Industry   BrightSource  Energy   Oakland   201   Industrial  Energy   Airbnb  Inc.   San  Francisco   112   Media  and  Entertainment   Square  Inc.   San  Francisco   100   IT  Services   Kabam  Inc.   Redwood  City   85   Solware   Fulcrum  BioEnergy   Pleasanton   75   Industrial  Energy   BridgeLux  Inc.   Livermore   67   Semiconductors   Adchemy  Inc.   Foster  City   61   IT  Services   Nevro  CorporaUon   Menlo  Park   5   Medical  Devices  and  Equipment   Yapstone  Inc.     San  Francisco   50   IT  Services   Eventbrite  Inc.   San  Francisco   50   IT  Services   Source:  PriceWaterhouseCoopers  MoneyTree   Venture Capital Top VC Investment by Sector in 2011 to Q3 Bay  Area   East  Bay   San  Francisco   San  Jose  1   Solware   Industrial  Energy   Solware   Solware   Media  and   Medical  Devices   Media  and  2   Entertainment   and  Equipment   Entertainment   Semiconductors   Medical  Devices   Medical  Devices  3   and  Equipment   Solware   IT  Services   and  Equipment  4   Industrial  Energy   Biotechnology   Biotechnology   Industrial  Energy  Source:  PriceWaterhouseCoopers  MoneyTree   14
  15. 15. 12/16/11 Patents Granted Rank   Among   Total   CounYes   County   2009   2010   (‘06-­‐’10)   1   Santa  Clara   7,805   10,047   40,290   2   King,  WA   3,026   3,637   13,075   3   Los  Angeles   2,216   2,817   11,800   4   San  Diego   1,964   2,993   11,120   5   San  Mateo   1,954   2,664   10,103   6   Middlesex,  MA   1,822   2,564   9,899   7   Alameda   1,690   2,191   8,971   8   Orange   1,648   2,175   8,782   29   Contra  Costa   500   659   2,516   Source:  US  Patent  and  Trademark  Office   Local Housing Markets Sales  Volume   Median  Price   Oct-­‐10   Oct-­‐11   %  Chng   Oct-­‐10   Oct-­‐11   %  Chng  Santa  Clara   1,374   1,417   3.10%   $502,500     $450,000     -­‐10.40%  Contra  Costa   1,333   1,329   -­‐0.30%   $260,000     $250,750     -­‐3.60%  Marin   205   230   12.20%   $630,000     $602,909     -­‐4.30%  Riverside   3,264   3,026   -­‐7.30%   $198,000     $187,000     -­‐5.60%  San  Bernardino   2,343   2,300   -­‐1.80%   $150,000     $150,000     0.00%  Sonoma   386   490   26.90%   $309,000     $283,500     -­‐8.30%  Orange   2,298   2,241   -­‐2.50%   $438,000     $405,000     -­‐7.50%  Alameda   1,252   1,308   4.50%   $365,000     $340,000     -­‐6.80%  Los  Angeles   5,470   5,830   6.60%   $325,000     $300,000     -­‐7.70%  Solano   517   554   7.20%   $205,500     $188,000     -­‐8.50%  San  Diego   2,750   2,759   0.30%   $334,500     $315,000     -­‐5.80%  San  Mateo   528   566   7.20%   $561,250     $525,000     -­‐6.50%  Ventura   619   673   8.70%   $355,000     $335,000     -­‐5.60%  San  Francisco   436   448   2.80%   $652,000     $635,000     -­‐2.60%  Napa   91   102   12.10%   $307,000     $310,000     1.00%  Source:  DataQuick   15
  16. 16. 12/16/11 Median Home Prices Through Q3-2011 $1,200   •  Price  Declines  –  Peak  to   $1,000   Current   –  Bay  Area:    -­‐39%   $800   –  Marin:    -­‐18%  Thousands   MARIN   –  San  Francisco:  -­‐19%   $600   SAN  FRANCISCO   SAN  MATEO   –  San  Mateo:  -­‐21%   $400   SANTA  CLARA   –  Santa  Clara  -­‐27%   BAY  AREA   $200   $0   1989Q3   1991Q2   1993Q1   1994Q4   1996Q3   1998Q2   2000Q1   2001Q4   2003Q3   2005Q2   2007Q1   2008Q4   Source:  DataQuick   How Many Underwater? as of Q3-11 #  Mortgages   NegaUve  Equity   State       Underwater     Share   Nevada   328,369                    58.3   Arizona   617,876                    47.1   Florida   1,911,419                    43.9   Michigan   477,104                    34.5   California   2,030,292                    29.7   Georgia   488,310                    30.0   United  States  Total   10,723,410                    22.1   Local  MSAs   Oakland-­‐Fremont-­‐Hayward   157,146                      29.0   San  Jose-­‐Sunnyvale-­‐Santa  Clara   60,382                    17.5   San  Francisco-­‐San  Mateo-­‐Redwood  City   33,036                    10.2   Source:  First  American  CoreLogic   16
  17. 17. 12/16/11 Home Price Forecast 1,000   Thousands  of  Dollars   900   San Francisco 800   700   600   500   East Bay San Jose 400   300   200   100   0   Q1-­‐1995   Q1-­‐1996   Q1-­‐1999   Q1-­‐2000   Q1-­‐2001   Q1-­‐2002   Q1-­‐2003   Q1-­‐2005   Q1-­‐2006   Q1-­‐2009   Q1-­‐2010   Q1-­‐2011   Q1-­‐2012   Q1-­‐2013   Q1-­‐2015   Q1-­‐2016   Q1-­‐1997   Q1-­‐1998   Q1-­‐2004   Q1-­‐2007   Q1-­‐2008   Q1-­‐2014   SF  Actual   EB  Actual   SJ  Actual   SF  Forecast   EB  Forecast   SJ  Forecast   Source:  Beacon  Economics   Foreclosures Through Q3-2011 9.0   •  Current  Rates   8.0   –  Bay  Area:    2.6   7.0   –  Alameda:    2.6  Foreclosures  /  1,000  Homes   6.0   –  Contra  Costa:  4.2   5.0   San  Francisco  (MD)   –  San  Francisco:  0.7   4.0   Oakland  (MD)   –  San  Mateo:  1.3   San  Jose  (MSA)   –  Marin:    1.2   3.0   –  Santa  Clara:  1.4   2.0     1.0     0.0   1995Q1   1996Q2   1997Q3   1998Q4   2000Q1   2001Q2   2002Q3   2003Q4   2005Q1   2006Q2   2007Q3   2008Q4   2010Q1   2011Q2   Source:  DataQuick   17

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