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Southern California Association of Governments November 16, 2001 The Events of September 11: Economic Impacts on the Re PowerPoint Presentation
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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

immediate fallout of 9 11
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
regional outlook post 9 11 milken institute moderate scenario
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
slide15

450 basis points in 310 days!

Los Angeles Times, October 3, 2001, front page

slide17

Mortgage Banker’s Association

Mortgage Applications Survey

From: dismalscience.com - November 7, 2001

the region s exposure
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
benefits to the region
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)

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

slide51

Job Creation or Loss (SA)

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

slide53

Median Home Selling Prices

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

summary
Summary
  • 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