2014 Economic Forecast:
Leadership’s Role in a Changing Economy

Technology Alliance Group for Northwest Washington

Janua...
Sources:
•
•
•
•
•
•

Washington Dept. of Employment Security (for state and
local employment and wage data)
US Bureau of ...
Economics

Demographics

Institutions/
Leadership

Technology
What to Do ?

Autor and Dorn, 2008
Employment Change 97 - 06
Employment Category (white
collar jobs)
High skilled

% Change

24.6

lawyers, engineers, etc.

...
Percentage Change in Employment, 1980 - 2010
120

100

Percent

80

60

40

20

0

High skill

Upper middle

Lower middle
...
Percentage Change in Real Wages, 1980 - 2010
40
35
30

Percent

25
20
15
10
5
0
High skill

Upper middle

Lower middle

Lo...
1975q1
1976q3
1978q1
1979q3
1981q1
1982q3
1984q1
1985q3
1987q1
1988q3
1990q1
1991q3
1993q1
1994q3
1996q1
1997q3
1999q1
200...
Bio-chemistry and
Health Care
Education?

Retail?
Transportation
(especially with
energy boom)
What do these changes mean for the local
economy?
What disruptions can we anticipate… and
when?

Note: the changes describ...
Global Forecast – Modest Growth
Global Forecast – Modest Growth
Metrics for U.S.
2012 Actual

2013 Expected

2014 Forecast

Annual Percent Change

Real GDP

2.4

2.0

2.2

Non Farm Jobs
...
Washington Outlook
2014 Forecast (US)

2014 Forecast (US)

Annual Percent Change

Real Per Capita Income

1.8

1.7

Non Fa...
General Trends:

Recent population growth
Whatcom County: roughly 1%
Washington State: roughly 1%
Annual job growth since ...
Looking past the aggregate trends:

Population growth
Growth differs by age cohort by county
Job growth
Very different job...
Local Employment Growth

• Roughly the same as the state…
3,050,000

88,000

3,000,000

86,000

2,950,000

84,000

2,800,0...
Aug-13

Mar-13

Oct-12

May-12

Dec-11

Jul-11

Feb-11

Sep-10

150,000

Apr-10

Nov-09

Jun-09

Jan-09

Aug-08

Mar-08

O...
Sep-13

May-13

Jan-13

Sep-12

May-12

Jan-12

180,000

Sep-11

May-11

220,000

Jan-11

Sep-10

May-10

Jan-10

Sep-09

...
Immigration and Emigration
Cohort

25 - 29
30 - 34
35 - 39
Etc.
60 - 64
65 - 69

2002

2007

2012
Change in Cohort Size: 2007 - 2012
Cohort

WA State

King

Whatcom Jefferson

30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 -...
Job Mix: Cause or Result?
Professional & Technical Service Jobs
10
9

King County

Percentage of Total

8
7

Whatcom

6
5
...
Job Mix – Major Metro vs. Small Metro
King

Whatcom

20
18
16

Percent of all Jobs

14
12
10
8
6
4
2
0

Const

Mfg

Retail...
Wage Mix – Major Metro vs. Small Metro
King

Whatcom

25

Percent of all Wages

20

15

10

5

0

Const

Mfg

Retail

Info...
Are the trends in this recovery robust – or
temporary?
Economics

Demographics

Institutions/
Leadership

Technology
Leadership in business:
• What has changed?
• Is the landscape more competitive;
does it require a different approach?
Lea...
Thank you !

Hart.Hodges@wwu.edu
Center for Economic and Business Research
Western Washington University
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2014 Economic Forecast: Leadership's Role in a Changing Economy

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Dr. Hart Hodges presented economic data of trends in professional technical services at a national, state and loval level, including trends of what is and is not working. These trends highlight demographic, economic and other changes affecting the way communities recognize their leaders and how leaders communicate.

Hart Hodges is a professor of economics at WWU and the director of Western’s Center for Economic and Business Research. He is also a partner at Waycross Investment Management Company. In the classroom Hart teaches health economics and environmental economics, as well as the traditional core courses. At the Center, he focuses on applied business economics and connecting the university to the business community in the region. He also enjoys being active in the private sector as a registered investment advisor and fiduciary. He received his PhD from the University of Washington, masters in environmental management from Duke University, and his BA from Williams College. Hart is active in the community, currently serving on the boards of the NW Workforce Development Council and NW Economic Development Council.

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2014 Economic Forecast: Leadership's Role in a Changing Economy

  1. 1. 2014 Economic Forecast: Leadership’s Role in a Changing Economy Technology Alliance Group for Northwest Washington January 29, 2014 Hart Hodges Western Washington University
  2. 2. Sources: • • • • • • Washington Dept. of Employment Security (for state and local employment and wage data) US Bureau of Economic Analysis (GDP data) Washington Office of Financial Mngt (population figures) JP Morgan and Washington Office of Forecast Council (forecast estimates) The Economist magazine (graphics related to 3-D printers) Other slides show authors and publication dates – citations available upon request.
  3. 3. Economics Demographics Institutions/ Leadership Technology
  4. 4. What to Do ? Autor and Dorn, 2008
  5. 5. Employment Change 97 - 06 Employment Category (white collar jobs) High skilled % Change 24.6 lawyers, engineers, etc. Medium skilled -30.1 computer support Low skilled sales rep, drafter, exec. asst. Crino, Review of Economic Studies, 2010 1.5
  6. 6. Percentage Change in Employment, 1980 - 2010 120 100 Percent 80 60 40 20 0 High skill Upper middle Lower middle Low Skill
  7. 7. Percentage Change in Real Wages, 1980 - 2010 40 35 30 Percent 25 20 15 10 5 0 High skill Upper middle Lower middle Low Skill
  8. 8. 1975q1 1976q3 1978q1 1979q3 1981q1 1982q3 1984q1 1985q3 1987q1 1988q3 1990q1 1991q3 1993q1 1994q3 1996q1 1997q3 1999q1 2000q3 2002q1 2003q3 2005q1 2006q3 2008q1 2009q3 2011q1 2012q3 Nonfarm Jobs (1,000s) 146,000 126,000 116,000 10,000 106,000 96,000 8,000 86,000 6,000 76,000 66,000 4,000 $ (billions) Structural vs. Cyclical ? (Inflation ?) 16,000 156,000 14,000 136,000 12,000
  9. 9. Bio-chemistry and Health Care Education? Retail? Transportation (especially with energy boom)
  10. 10. What do these changes mean for the local economy? What disruptions can we anticipate… and when? Note: the changes described so far do not explain the sort of inequality in wealth we are seeing today… What is driving the inequality?
  11. 11. Global Forecast – Modest Growth
  12. 12. Global Forecast – Modest Growth
  13. 13. Metrics for U.S. 2012 Actual 2013 Expected 2014 Forecast Annual Percent Change Real GDP 2.4 2.0 2.2 Non Farm Jobs 1.6 1.6 1.6 Housing Starts 20.5 27.6 12.0 CPI 2.9 1.7 1.3 Rate (%) Unemployment Rate 8.5 7.8 7.1 10 Yr Treas. Yield 1.8 3.0 3.5+ 30 Yr Fixed Mort. 4.0 3.5 4.4
  14. 14. Washington Outlook 2014 Forecast (US) 2014 Forecast (US) Annual Percent Change Real Per Capita Income 1.8 1.7 Non Farm Jobs 1.8 1.6 Manufacturing 0.7 0.8 Service Providing 1.8 1.6 Housing Units Authorized CPI - 0.7 1.2 (Seattle) 1.3 (U.S.) Rate (%) Unemployment Rate 6.85 7.14
  15. 15. General Trends: Recent population growth Whatcom County: roughly 1% Washington State: roughly 1% Annual job growth since Aug ‘09 Whatcom County: roughly 1.8% Washington State: roughly 1.7% Retail Sales Whatcom County: slightly higher growth
  16. 16. Looking past the aggregate trends: Population growth Growth differs by age cohort by county Job growth Very different job mix in major metro areas versus more rural areas Resulting in wage growth disparity Retail Sales Distribution of activity within the county invites important questions
  17. 17. Local Employment Growth • Roughly the same as the state… 3,050,000 88,000 3,000,000 86,000 2,950,000 84,000 2,800,000 80,000 2,750,000 78,000 2,700,000 76,000 2,650,000 74,000 2,600,000 Aug-13 Mar-13 Oct-12 May-12 Dec-11 Jul-11 Feb-11 Sep-10 Apr-10 Nov-09 Jun-09 Jan-09 Aug-08 Mar-08 Oct-07 May-07 Dec-06 Jul-06 Feb-06 Sep-05 70,000 Apr-05 2,500,000 Nov-04 72,000 Jun-04 2,550,000 Jobs - Whatcom 82,000 2,850,000 Jan-04 Jobs - Washington 2,900,000
  18. 18. Aug-13 Mar-13 Oct-12 May-12 Dec-11 Jul-11 Feb-11 Sep-10 150,000 Apr-10 Nov-09 Jun-09 Jan-09 Aug-08 Mar-08 Oct-07 May-07 Dec-06 Jul-06 Feb-06 Sep-05 Apr-05 Nov-04 Jun-04 Jan-04 Jobs in Retail Trade 160,000 11,500 155,000 11,000 Whatcom 10,500 145,000 10,000 140,000 Seattle 135,000 9,500 130,000 9,000
  19. 19. Sep-13 May-13 Jan-13 Sep-12 May-12 Jan-12 180,000 Sep-11 May-11 220,000 Jan-11 Sep-10 May-10 Jan-10 Sep-09 May-09 Jan-09 Sep-08 May-08 Jan-08 Sep-07 May-07 Jan-07 Sep-06 May-06 Jan-06 Sep-05 May-05 Jan-05 Sep-04 May-04 Jan-04 Jobs in Professional & Business Services 230,000 8,500 Seattle 8,000 210,000 7,500 200,000 7,000 190,000 6,500 Whatcom 6,000 170,000 5,500 160,000 5,000 150,000 4,500 140,000 4,000
  20. 20. Immigration and Emigration Cohort 25 - 29 30 - 34 35 - 39 Etc. 60 - 64 65 - 69 2002 2007 2012
  21. 21. Change in Cohort Size: 2007 - 2012 Cohort WA State King Whatcom Jefferson 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 3 3 -3 15 3 2 2 5 0 0 3 6 -1 -4 1 2 -1 -4 -3 6 -1 -4 2 11 -2 -6 3 15 -4 -9 -2 12 -9 -11 -8 -7
  22. 22. Job Mix: Cause or Result? Professional & Technical Service Jobs 10 9 King County Percentage of Total 8 7 Whatcom 6 5 4 3 2 1 0 2005-2012 2005-2012
  23. 23. Job Mix – Major Metro vs. Small Metro King Whatcom 20 18 16 Percent of all Jobs 14 12 10 8 6 4 2 0 Const Mfg Retail Info Prof & Tech Accom Health Govt
  24. 24. Wage Mix – Major Metro vs. Small Metro King Whatcom 25 Percent of all Wages 20 15 10 5 0 Const Mfg Retail Info Prof & Tech Accom Health Govt
  25. 25. Are the trends in this recovery robust – or temporary?
  26. 26. Economics Demographics Institutions/ Leadership Technology
  27. 27. Leadership in business: • What has changed? • Is the landscape more competitive; does it require a different approach? Leadership in the community: • What is needed for leadership given the technical, demographic and economic changes
  28. 28. Thank you ! Hart.Hodges@wwu.edu Center for Economic and Business Research Western Washington University

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