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2019 Regional Economic Snapshot

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This month’s Regional Snapshot provides an overview of the most relevant trends in our metro economy- topics include job growth by sector, changes in wage levels, and trends in residential and commercial (by type) permit and construction activity.

Published in: Economy & Finance
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2019 Regional Economic Snapshot

  1. 1. Atlanta Regional Commission January 2019 2019 Regional Economic Snapshot For more information, contact: mcarnathan@atlantaregional.org
  2. 2. Key Takeaways Metro Atlanta continues to be a national leader in job growth, though Atlanta’s growth rate has slowed since late 2017, hovering just above the national average Wages continue to see positive annual growth, but growth is still sluggish Strongest year-over-year employment growth found in lower wage sectors, including construction and leisure & hospitality Home prices remain above pre-recession peak, though still well below the 20 (largest) city composite Office and retail construction levels similar to last year, with nearly five million square feet of office space and roughly two million square feet of retail space currently under construction in metro Atlanta
  3. 3. Metro Atlanta’s GDP Up Nearly 24 Percent Since 2010 (In millions of Chained Dollars $2009) Metro 2010 2011 2012 2013 2014 2015 2016 2017 % Change 2010-2017 % Change 2016-2017 New York 1,321,890 1,325,612 1,364,249 1,367,355 1,391,584 1,419,450 1,425,635 1,444,484 9.3% 1.3% Los Angeles 754,535 760,055 781,151 796,341 826,980 869,246 880,453 904,899 19.9% 2.8% Chicago 522,484 529,860 545,392 543,675 552,838 566,619 574,603 583,137 11.6% 1.5% Dallas 359,151 372,205 391,231 412,264 431,147 454,716 461,752 479,678 33.6% 3.9% Washington 426,282 432,803 435,144 431,875 434,035 442,788 450,726 460,026 7.9% 2.1% Houston 372,614 385,027 408,515 425,042 436,083 452,353 436,221 436,369 17.1% 0.0% San Francisco 321,982 321,282 337,674 350,305 368,129 389,201 411,340 425,358 32.1% 3.4% Philadelphia 344,835 346,289 352,056 363,869 366,776 375,649 381,747 387,217 12.3% 1.4% Boston 325,699 332,700 340,681 342,477 349,951 365,302 369,243 379,499 16.5% 2.8% Atlanta 269,939 274,623 278,536 288,394 299,830 311,373 324,971 334,488 23.9% 2.9% Seattle 240,771 245,216 256,930 264,336 273,733 286,317 297,254 312,587 29.8% 5.2% Miami 247,557 247,940 254,161 251,020 267,698 281,369 289,602 296,486 19.8% 2.4% San Jose 161,534 172,532 178,727 188,543 202,567 224,908 238,384 256,419 58.7% 7.6% Detroit 196,263 203,896 208,204 209,372 213,422 218,528 222,087 228,069 16.2% 2.7% Minneapolis 195,811 201,599 202,894 206,173 213,028 216,781 221,284 226,152 15.5% 2.2% Phoenix 178,640 182,412 187,477 188,075 193,215 199,361 204,015 210,968 18.1% 3.4% San Diego 173,447 179,174 181,171 186,674 189,042 190,899 197,641 201,986 16.5% 2.2% Denver 151,224 153,031 157,916 159,968 169,525 177,321 179,516 185,942 23.0% 3.6% Baltimore 150,990 154,141 155,582 156,912 158,797 160,112 164,254 165,903 9.9% 1.0% Portland 141,374 148,621 142,586 138,916 141,344 146,689 151,966 156,553 10.7% 3.0% Source: Bureau of Economic Analysis
  4. 4. In general, metro Atlanta’s year-over-year employment growth rate has been stronger than that of the nation’s for the last six years. However, since late 2017 Atlanta’s growth rate has slowed, hovering just above the national rate. Metro Atlanta Outperforming Nation Last 6 Years -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Year-Over-Year Percent Change in Total Nonfarm Employment Atlanta US Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  5. 5. Unemployment Rates Low Everywhere in Peer Metros Source: Bureau of Labor Statistics 4.4% 3.8% 5.0% 4.7% 4.1% 3.9% 4.0% 3.9% 3.5% 4.5% 3.6% 2.8% 8.0% 5.7% 8.6% 8.4% 5.9% 7.1% 5.9% 4.7% 6.6% 7.1% 6.4% 5.4% 3.2% 2.4% 3.2% 3.8% 3.2% 3.3% 3.8% 2.0% 3.9% 2.5% 3.9% 3.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Atlanta Boston Charlotte Chicago Dallas Denver Houston Minneapolis Phoenix San Francisco Seattle Washington DC Nov-07 Nov-12 Nov-18 Metro Atlanta’s unemployment rate for November 2018 (3.2%) was slightly less than the national unemployment rate (3.7%) for the same period, and was on par with its peer metros. Only Boston, Minneapolis, and San Francisco had lower rates of unemployment in November 2018.
  6. 6. Metro Atlanta #6 in job growth, year-over-year Metro Atlanta ranks sixth among the 12 largest metro areas in year-over-year job growth for the November 2017 to November 2018 period. Last year, Atlanta ranked 2nd among its peers in year-over-year growth, so while the metro is still outpacing the national growth rate, Atlanta’s rate is starting to slow compared to its peers. 4.3% 3.7% 3.6% 3.0% 2.7% 2.4% 2.4% 2.1% 2.0% 2.0% 1.7% 1.7% 0.6% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Houston Seattle Phoenix Dallas Charlotte Atlanta Denver San Francisco Boston Washington DC Minneapolis U.S. Chicago Year-Over-Year Percent Change in Nonfarm Employment September 2017 – September 2018 Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  7. 7. Growth in Higher-Paying Sectors Slow, While Lower-Paying Sectors Soar In metro Atlanta, year-over-year September 2017 to September 2018, the construction, education & health services, and leisure & hospitality sectors experienced the strongest growth, significantly outpacing national growth in these sectors. Historically a strong performer in metro Atlanta, the information sector in 2018 experienced a year of slow and, at times negative, growth. 2.4% 0.0% 9.6% 1.4% 3.0% -0.5% -1.3% 1.5% 4.4% 3.8% -1.0% 1.0% 1.7% 9.1% 4.2% 2.3% 1.2% -0.9% 1.4% 2.7% 2.0% 1.9% 1.6% 0.4% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% Total Nonfarm Mining & Logging Construction Manufacturing Trade, Transportation, & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government Year-Over-Year Percent Change in Employment, By Super Sector September 2017 - September 2018 Atlanta U.S. Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  8. 8. A Look at Sector-by-Sector Employment Growth (not seasonally adjusted) While both construction and manufacturing employment rebounded from the Great Recession, construction saw steadily increasing growth rates over 2018, while manufacturing’s growth rate hovered around one percent over the course of the year. -30.0 -25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Construction -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Manufacturing Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  9. 9. Growth in wholesale trade has been trending upward over the last two years and employment in the retail sector has begun ticking back up over the course of 2018 after experiencing over two years of declining growth rates. -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Wholesale Trade -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Retail A Look at Sector-by-Sector Employment Growth (not seasonally adjusted) Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  10. 10. The information and financial services sectors, two sectors that have relatively high overall wages, have experienced slow, and, at times negative, growth rates since late 2017, though the last four months the information sector, while still negative, has slowly begun climbing upward again. -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Information -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Financial Services A Look at Sector-by-Sector Employment Growth (not seasonally adjusted) Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  11. 11. Though previously a strong growth sector, the professional & business services sector has been declining each month since August 2014. Meanwhile, the education and health services sector has seen some variability in growth rates, though growth has remained above two percent since the recession. -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Professional & Business Services 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Education & Health Services A Look at Sector-by-Sector Employment Growth (not seasonally adjusted) Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours
  12. 12. Source: Bureau of Labor Statistics, State and Area Employment, Earnings, and Hours Employment growth in the leisure & hospitality sector slowed from June 2016 to December 2017 before rebounding in 2018 to a rate of between three and four percent. -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Leisure A Look at Sector-by-Sector Employment Growth (not seasonally adjusted)
  13. 13. Jobs Earnings Falling Behind in Metro Atlanta $52,000 $54,000 $56,000 $58,000 $60,000 $62,000 $64,000 $66,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Average Earnings Per Job ($2017) US ATL In the early 2000s, jobs in metro Atlanta paid, on average, better than the average pay for other metro areas. The Great Recession changed that trajectory, and metro Atlanta is still trying to catch up. Source: Bureau of Economic Analysis; (CPI from Bureau of Labor Statistics)
  14. 14. $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 Earnings per Job – Metro Atlanta ($2016) Jobs Earnings the Same Today As in 1998 Source: Bureau of Economic Analysis; (CPI from Bureau of Labor Statistics) Still, on an inflation-adjusted basis, job earnings today are roughly the same as they were in 1998.
  15. 15. Average Hourly Wage by Selected Occupation Occupation Atlanta Area United States Financial Managers $71.92 $69.00 General and Operations Managers $58.86 $59.36 Management Analysts $46.66 $44.92 Computer Systems Analysts $43.46 $44.59 Accountants and Auditors $37.20 $37.46 Registered Nurses $33.91 $35.36 Customer Service Representatives $17.46 $17.14 Construction Laborers $17.24 $18.70 Retail Salespersons $12.00 $13.20 Cashiers $9.82 $10.64 Cooks, Fast Food $9.63 $10.39 Waiters and Waitresses $9.57 $12.15 In exploring wages by selected occupations, wages for lower-wage occupations pay less in metro Atlanta than they do in the nation as a whole. Source: Chmura Economics, JobsEQ
  16. 16. Home Prices Exceed Pre-RecessionPeak Sources: Case-Shiller Home Price Index Home prices in metro Atlanta are higher today than during they were at the pre-recession peak; they have been for the last 18 months (per Case-Shiller). Home prices in Atlanta are still lower than the 20 largest city composite prices, however. 148.23 213.76 50.00 70.00 90.00 110.00 130.00 150.00 170.00 190.00 210.00 230.00 Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Case-Shiller Home Price Index Atlanta 20-City Composite
  17. 17. Still Struggles With Housing Costs, Though Sources: Zillow, Q4, 2017 While home prices have finally eclipsed their pre-recession peak, Atlanta ranks ninth out of the 40 largest markets in the percentage of homes that have negative equity (owners owe more than what the house is worth). 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% % of Homes with Negative Equity
  18. 18. Total Residential Units Authorizedby Building Permit Sources: State Of the Cities Database; ARC R&A Switching to the housing market –the number of units permitted remains significantly lower when compared to pre-recession levels. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Metro Atlanta Residential Units Permitted, 2003-Current
  19. 19. Sources: State Of the Cities Database; ARC R&A. Note: Clayton, Douglas, Fayette, Henry, and Rockdale counties had 10 or less permitted multi-family residential units Total Residential Units Authorized by Building Permit, byJurisdiction 3,880 1,271 897 1,915 69 462 1,029 2,024 438 1,417 1,198 357 454 2,735 2,957 1,605 274 0 1,000 2,000 3,000 4,000 5,000 6,000 City of Atlanta Cherokee County Clayton County Cobb County DeKalb County Douglas County Fayette County Fulton County (without Atlanta) Gwinnett County Henry County Rockdale County Number of Residential Units Permitted, 2018 (through October) Multi-Family Units Single-Family Units
  20. 20. 93.1 44.5 26.0 22.1 30.3 37.6 56.0 51.0 44.1 60.3 -$2.00 -$1.50 -$1.00 -$0.50 $0.00 $0.50 $1.00 $1.50 0 10 20 30 40 50 60 70 80 90 100 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 Net New Square Feet Built Annual Change in Ave Rent ($) PSF The Nation –Office Space Over Time (Net New Space and Rent Changes) Sources: CoStar; ARC R&A MillionsofNetNew SquareFeet $ChangeinAverageRent PerSquareFoot Nationally, little new office space has been added in recent years, which is a result of the overbuilding of the sector prior to and during early part of the recession, and minimal (or negative) rent growth.
  21. 21. Atlanta & Peer MSAs- Current Office Conditions 2017 Q3 Sources: CoStar; ARC R&A MillionsofSquareFeetUnder Construction VacancyRate A little less than five million square feet of office space is currently under construction in metro Atlanta with an 11.6 percent vacancy rate. Both of these values rank metro Atlanta in the middle of the pack of these peer metros. 8.8 8.7 7.3 4.6 7.3 4.9 7.3 5.4 3.8 3.9 3.1 1.3 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 0 1 2 3 4 5 6 7 8 9 10 Square Feet Under Construction Vacancy Rate
  22. 22. Retail Over Time (Net New Space and Rent Changes)—The Nation Sources: CoStar; ARC R&A MillionsofNetNew SquareFeet $ChangeinAverageRent PerSquareFoot Nationally, and similar to new office space built, new retail construction has lagged in recent years, with a bump-up in 2014-2015 & 2015-2016. After years of negative or flat rent growth, average rents increased recently. 106.9 52.3 46.3 47.9 45.7 54.7 63.5 62.6 44.9 55.0 (1.20) (1.00) (0.80) (0.60) (0.40) (0.20) 0.00 0.20 0.40 0.60 0.80 1.00 0.0 20.0 40.0 60.0 80.0 100.0 120.0 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 Net New Square Feet (MSF) Annual Change in Ave Rent ($) PSF
  23. 23. 2.50 4.50 2.20 1.70 2.90 2.30 2.00 1.30 1.10 1.20 0.70 0.20 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 Square Feet Under Construction Vacancy Rate Current Retail Conditions – Atlanta & Peer MSAs 2017 Q3 Sources: CoStar; ARC R&A MillionsofSquareFeetUnder Construction VacancyRate Across metro Atlanta, roughly two million square feet of retail space is currently under construction with a 5.1 percent vacancy rate. Both of these values rank metro Atlanta in the middle of the pack of peer metros.

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