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enterpriseSeattle Forecast 2012 - Dick Conway

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40th Annual Economic Forecast Conference, Thursday, January 12, 2012 (Seattle, WA) …

40th Annual Economic Forecast Conference, Thursday, January 12, 2012 (Seattle, WA)

2012 Forecast - Dick Conway, Puget Sound Economic Forecaster

Published in: Sports, Business

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  • 1. enterpriseSeattle’s40th Economic Forecast Conference Thursday, January 12, 2012 Washington State Convention Centerinfo@enterpriseSeattle.org (206) 389-8650 www.enterpriseSeattle.org
  • 2. 2012 FORECAST: A LOOK AHEADModerator:Jeff Marcell, enterpriseSeattlePanelists:- Dick Conway, Puget Sound Economic Forecaster- Mike Dueker, Russell Investments- Ken Goldstein, The Conference Board
  • 3. PUGET SOUND ECONOMIC OUTLOOK Dick Conway The Puget Sound Economic Forecaster Conway Pedersen Economics, Inc. www.economicforecaster.com01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 4. The Great Depression Percent Change Percent 20 28 15 24 10 20 5 16 0 12 -5 8 -10 4 -15 0 1929 1931 1933 1935 1937 1939 Real GDP (l) Government spending (l) Unemployment rate (r)01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 5. Great Recession and Recovery 2008.3- 2009.2- 2010.4- 2009.2 2010.4 2011.3Real GDP growth (%/year) -5.5 3.0 1.2Employment change (mils./year) -7.6 -0.6 1.6Unemployment rate* (%) 9.3 9.6 9.1Housing starts change (mils./year) -0.4 0.0 0.1*End of period.01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 6. The Great Recession Employment Change Puget United Sound StatesPeak to trough (quarters) 8 8Employment (% change) -7.6 -6.2 Construction -36.4 -25.3 Financial activities -17.5 -7.2Peak unemployment rate (%) 9.5 10.0Unemployment rate (% change)* 5.5 5.5*Percentage point increase.01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 7. Some Encouraging News• Boeing outlook has hardly looked better• In terms of job growth, region is outpacing nation• Retail sales are a pleasant surprise• Foreign exports giving region a lift• Four companies touted for best customer service01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 8. Boeing Outlook• 787 has been launched• Unfilled airplane orders top 3,500• Boeing signs labor contract with machinists• Generous pay package plus $5,000 bonus• Guarantee to build 737 MAX in Renton01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 9. Puget Sound and U.S. Employment Annual Percent Change 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0 -10.0 2007.1 2007.3 2008.1 2008.3 2009.1 2009.3 2010.1 2010.3 2011.1 2011.3 Puget Sound United States01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 10. Puget Sound Retail Sales* Percent Change Average 2009 2010 2011 2009-11Retail Sales -4.2 4.2 5.4 4.8 Durables -13.5 2.1 7.4 4.7 Nondurables -0.9 5.0 4.3 4.6 Other 4.3 5.6 5.3 5.5Personal income -0.9 3.3 5.3 4.3*Current dollars.01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 11. Foreign Exports Lead Recovery• Per capita, Washington is nation’s top exporter• One in four jobs depend upon foreign exports• Foreign exports are state’s fastest growing sector• U.S. exports now growing at 10 percent annual rate• Manufacturing leading regional job recovery• Microsoft pay raise added $600 million to economy01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 12. Consumer Reports Top Ten Companies with Best Customer Service Consumer Reports picks: ● Costco ● Microsoft ● Amazon.com ● REI My picks: ● Starbucks (“lattes to the world”) ● Nordstrom (“a good fit for 100 years”) ● Boeing (“safest way to get from here to there”)01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 13. Puget Sound Economic Forecast Percent Change 2010 2011 2012 2013Employment -1.6 1.5 1.6 1.6Personal income 3.3 5.3 5.1 3.9Consumer price index 0.3 2.6 2.1 2.2Housing permits 31.4 13.8 7.1 18.8Population 1.0 0.9 1.1 1.101/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 14. Puget Sound Economic Forecast (2) Percent Change 2010 2011 2012 2013Retail sales 4.2 5.4 5.9 3.7Taxable retail sales -0.2 2.5 4.9 5.4Home sales 2.7 10.0 15.8 12.4Average home price -0.8 -8.1 2.8 6.5Apartment vacancy (%) 5.5 5.0 5.1 5.501/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 15. Puget Sound Leading Index and Employment 1987=1.000 Thousands 1.200 1950 1.160 1900 1.120 1850 1.080 1800 1.040 1750 1.000 1700 0.960 1650 0.920 1600 Leading index (l) Employment (r) Note: Shaded areas designate recessions.01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER
  • 16. Washington State Government Expenditures and Tax Revenue Per Capita in 2005 Dollars Tax Personal Expenditures Revenue Income1FY 2005-07 4,489 4,062 76,800FY 2007-09 4,271 3,572 80,029FY 2009-11 3,741 3,403 76,640FY 2011-13 3,512 3,456 78,929Percent change2 -21.8 -14.9 2.81Total income earned in the biennium per person.2Between FY 2005-07 and FY 2011-13.01/12/2012 THE PUGET SOUND ECONOMIC FORECASTER