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John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

Inland Empire Economic Growth . . . Building An Expansion. John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP. After Losing 8.71 Million Jobs … U.S. Jobs All The Way Back & More. Petroleum Prices. Value of the Dollar. Consumer Confidence, 2009-2015.

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John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

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  1. Inland Empire Economic Growth . . . Building An Expansion John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP

  2. After Losing 8.71 Million Jobs …U.S. Jobs All The Way Back & More

  3. Petroleum Prices

  4. Value of the Dollar

  5. Consumer Confidence, 2009-2015

  6. Confidence & Home Sales

  7. Interest Rates Remain Benign

  8. U.S. & CA Unemployment History 6.9% 5.6% Great Recession

  9. California Job Gains/Losses 2008-2010 -1,066,400 2011-2014 +1,301,708 2014 Up +401,217 37.8% Up Recovery Great Recession

  10. Highest Unemployment RatesMajor U.S. Metro Areas

  11. Where Is the IE In Its Job History? 2011-2014 139,767 of 142,933 lost or 98.8% 3,167 Jobs To Go

  12. How Regional Economies Work Secondary Tier Economic Development … Increase The Economic Base! Primary Tier

  13. Construction & Real Estate:Real Hope

  14. Share of Underwater Homes Plunging

  15. Notices of Default At Low Levels (1,066 in January 2014)

  16. Investor Purchases of Foreclosed Homes

  17. Home Price Trends 2014, 71.0% 38.4% Above Existing Home -31.0%

  18. Long Term Competitive Price Advantage Still Exists

  19. Affordability to Median Income Household I. Empire L.A./SD Orange.

  20. Home Sales Volume Stagnant

  21. Mortgage Credit Still Tight • Percentage of closed loans with an average FICO score below 700 dropped: • 30 percent in January 2015 • 32 percent in January 2014 • Average FICO all loans was 731 up 5% from the 2014 average

  22. Permits: Some Hope

  23. The Future: Survey of 1,600 Millennials • 66% want to live in the suburbs • 24% want to live in rural areas • 10% want to live in a city center • Want to live in more space than they have now • 81% want three or more bedrooms in their home

  24. Why Low Volume • Less Foreclosures • Buyers Want or Need High Prices • Credit Hurt By Foreclosures • High FICO Scores • FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000 • Millennials Not Forming Families • Fear • Coming Help • FHA Lowering PMI rate on conforming loans 1.35% to 0.85% • Interest Rates Remaining Low • FNMA & Freddie Mac Easing Mortgage Requirements

  25. Construction Job Growth! Median Pay $51,923

  26. Why Home Construction’s Return Is Important Jobs Lost 2007-2011: -67,783 Job Gain 2012-2014: 17,892 Job Deficit: -49,892

  27. Logistics Flow of Goods

  28. Strong Industrial Space Absorption

  29. Industrial Construction

  30. Port Container VolumesStrike Impact -26.1% -21.6%

  31. Fulfillment Centers

  32. E-Commerce Growth RatesYear Over Year by Quarter

  33. Logistics Job Growth & Why It Is Important 19.3% of New Inland Jobs in 2013 20.0% of New Inland Jobs in 2014 Median Pay $43,911

  34. Manufacturing: Should Be A Major Growth Source

  35. California Manufacturing Job GrowthJust 2.8% of U.S. Growth

  36. Manufacturing Some Recovery Median Pay $49,138

  37. Regulatory InstabilityDestroying CA Blue Collar Sectors

  38. Nestle to close Valley food Plant 360 California jobs will be lost as Hot Pockets production goes to Kentucky BUSINESS Thursday, August 7, 2014 LATIMES.COM/BUSINESS :: “In higher skilled industries they are hesitant to move because the labor force is not available anywhere. But lower-skilled one, they have an easier time leaving. That trend in California has the potential to leave lower-educated workers behind.

  39. Commercial Industrial Loans Under $50 Million

  40. Beware • EPA-CARB-AQMD Standards Eliminating Ability of Blue Collar Sectors to Grow: • Manufacturing (Not Growing) • Logistics (Prime New Target) • Construction (NIMBY’s Love CEQA) • Blue Collar Sector Growth Needed To Allow Marginally Educated To Access the Middle Class • Poverty is Exacerbated as a Result!

  41. EPA & CARB SPONSORED 2015 SCIENTIFIC REPORT . . . • TRUCKS NO LONGER A MAJOR PUBLIC HEALTH THREAT! • 2007 Truck Engines: No Lifetime Cancer Risk • 2007 Truck Engines: 90% End To NO2 & PM2.5 Emissions • 2010 Engines: NO2 & PM2.5 “Substantially” Cut Further

  42. Skilled Workers Migrate InlandFor Better Homes

  43. Higher End Homes UPLAND $484,914 $465,778 Claremont $568,700 $427,095 $585,199 EASTVALE $468,269 $459,000 CORONA $429,667 TEMECULA $344,095 $393,603

  44. Migration of Educated Workers

  45. Office Absorption Follows Higher-End Workers High-End Jobs Follow Workers into the Area

  46. Office Vacancy Rates Improving But Still Very High 24.0% 17.0%

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