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Southern California Association of Governments November 16, 2001 The Events of September 11: Economic Impacts on the Region. Presented by Mark Schniepp Director. Los Angeles Times, September 12, 2001, front page. Los Angeles Times, September 18, 2001, front page.

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Southern California Association of GovernmentsNovember 16, 2001The Events of September 11:Economic Impacts on the Region

Presented by

Mark Schniepp

Director








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Immediate Fallout of 9/11

  • Disruption of Economic Activity

    • Financial markets closed

    • Air transportation system closed

    • Travel industry impacted -- hotels and recreation

  • Job and productivity losses due to destruction of 3 million square feet of office space

  • Indirect job losses: AMR, UAL, perhaps Boeing, others

  • Consumer confidence shaken

    • Effect on home sales

    • Effect on auto purchases


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Regional Outlook: post - 9/11Milken Institute “moderate scenario”

  • Many sectors vulnerable

    • Travel

    • Entertainment

    • International Trade

  • LA County to lose 76,200 jobs by 2002 Q3

  • Unemployment rate --> 7.5 percent

  • Income loss: $19.1 billion (2.1 percent)

  • Recession in the U.S. and the region until 2002 Q2, with growth accelerating in second half of 2002


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450 basis points in 310 days!

Los Angeles Times, October 3, 2001, front page


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Mortgage Banker’s Association

Mortgage Applications Survey

From: dismalscience.com - November 7, 2001


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The Region -- Southern California


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The Region’s Exposure

  • Travel and Tourism

    • Hotels, motels

    • Restaurants

    • Theme parks

    • Airlines, rental cars

    • Thousands of layoffs

  • Commercial Aircraft and suppliers

    • Orders being cut

    • Thousands of job layoffs

  • Advertising Industry

    • Strong presence of TV in the region


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Benefits to the Region

• High tech aircraft

  • Communications devices

  • Precision instrumentation

    • Surveilance equipment

    • Sensors

    • Controlling and tracking instruments

  • Movie attendance way up

    • $60 million record weekend for Monsters Inc.

    • All boats rising with tide

  • Movie production off (consequence of threatened SAG strike earlier in year) but more production planned for locations in California










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Job Creation or Loss (SA) front page

Los Angeles County, June to October 2001

June to Aug to

Sector Aug 2001 Oct 2001

Movie Production - 2,238 - 4,540

Communications Services 0 0

Recreation/Amusement 542 - 588

Hotels & other Lodging - 315 - 957

Aircrafts & Parts MFG - 300 - 1,509

Air Transportation 171 - 733

Eating & Drinking places - 500 - 800

Auto Dealers - 500 - 200

Gen Merch Retail Trade 118 - 1,482

Total non-farm - 6,254 -13,346


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Job Creation or Loss (SA) front page

Orange County, June to October 2001

June to Aug to

Sector Aug 2001 Oct 2001

Communications Services 0 0

Recreation/Amusement - 620 1,819

Hotels & other Lodging - 82 - 92

Aircraft & Parts MFG 0 0

Air Transportation 167 - 519

Eating & Drinking places 400 100

Gen Merch Retail Trade 200 400

Total non-farm 3,816 590


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Real Estate front page


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Median Home Selling Prices front page

California Counties, 2000 and 2001

First 9 months % change

County 2000 2001over 2000

San Diego $265,533 $300,073 + 13.0

Orange $316,103 $353,251 + 11.8

Los Angeles $214,049 $237,200 + 10.8

Inland Empire $136,760 $154,689 + 13.1

Ventura $295,203 $306,346 + 3.8

Santa Barbara $298,277 $336,286 + 12.7

Monterey $388,285 $432,288 + 11.3

Santa Clara $517,441 $538,944 + 4.2

San Francisco $444,192 $480,126 + 8.1

Sacramento $142,892 $171,904 + 20.3

Southern California $233,540 $257,777 + 10.4

California $239,826 $262,642 + 9.5




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Exports/Imports front page



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Summary front page

  • Recent events very disturbing to economy

  • immediate fallout - slowdown on spending

  • However, terrorist attacks won’t derail the U.S. or the California economy; they were fragile prior to 9/11

  • Initial shock already dying out

  • Recovery commences normally in quarter following a cataclysmic event

  • Fear factor also appears to be fading; travel has rebounded; consumers keep spending; equity markets rallying


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