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Ten Years of Change in the Humboldt County Economy. Prof. Erick Eschker and Jessica Digiambattista. The Index of Economic Activity for Humboldt County. Celebrating 10 Years--The Index of Economic Activity for Humboldt County. Professor Erick Eschker, Chair of the Department of Economics

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ten years of change in the humboldt county economy

Ten Years of Change in the Humboldt County Economy

Prof. Erick Eschker and Jessica Digiambattista

The Index of Economic Activity for Humboldt County

celebrating 10 years the index of economic activity for humboldt county
Celebrating 10 Years--The Index of Economic Activity for Humboldt County
  • Professor Erick Eschker, Chair of the Department of Economics
  • Jessica Digiambattista, student assistant editor
  • Garrett Perks and Andrea Walters, student assistant analysts
  • Founded by Prof. Steve Hackett and Prof. Tim Yeager
  • Six previous student assistants
our sponsoring business partners
Our Sponsoring Business Partners:
  • Coast Central Credit Union

Dean Christensen, President, and Dennis Hunter, Vice President of Marketing.

Representing Coast Central Credit Union today are Matt Dennis, Executive Vice President

and Jim Sessa, Vice President and Chief Financial Officer

our sponsoring business partners5
Our Sponsoring Business Partners:
  • Humboldt Bank

Martha Traphagen, Senior Vice President and Area Manager

our sponsoring business partners6
Our Sponsoring Business Partners:
  • North Coast Small Business Development Center

Kristin Roach-Johnson, Executive Director

our sponsoring business partners7
Our Sponsoring Business Partners:
  • Six Rivers Bank

Russ Harris, President and Chief Executive Officer

what is the index
What is the Index?
  • The only monthly source of broad-based economic indicators for Humboldt County
  • Extremely timely--most data are from the previous month
  • Leading indicators
  • Data since January 1994
what is the index10
What is the Index?

Tracks six sectors of the economy:

  • Home sales
  • Retail sales
  • Energy consumption
  • Occupancy rates at hotels/motels/inns
  • Employment
  • Lumber manufacturing
what does an index tell us
What does an Index tell us?
  • Seasonally adjusted--Units are not dollars
  • Index numbers are relative to the base period (January 1994=100)
  • Useful for determining percent change
  • Dow Jones Industrial Average example
readership
Readership

www.humboldt.edu/~indexhum/

  • Available about the 5th of each month
  • Steady growth in readership
  • 95% of readers from outside HSU
  • E-mail us to join our mailing list
index projects in 2003 2004
Index projects in 2003-2004
  • New website
  • New layout
  • Local Spotlight interviews
  • Gasoline prices in Humboldt County
potential projects
Potential projects
  • Housing sales predictor
  • Form “historical” Index back to 1960
  • Expansion of retail sector
  • New service sector

Depends upon continued support from existing and new sponsors!

demographic changes
Demographic Changes

According to the U.S. Census Bureau:

  • Humboldt County population has grown 6.2 percent from 1990 to 2000.
  • California state population has grown 13.8 percent in the same time.
demographic changes17
Demographic Changes
  • In Humboldt County the number of households with social security income has grown 9.4 percent from 1990 to 2000.
  • Throughout the state this change has been 12.7 percent.
demographic changes18
Demographic Changes
  • In Humboldt County the number of households with retirement income has grown 10 percent from 1990 to 2000.
  • Throughout the state this number has grown 14.5 percent.
home sales
Home Sales
  • Based on the number of homes that sell in Humboldt County each month.
  • Measure is adjusted for seasonal variation.
  • Quality of the data is very high.
changes and trends
Changes and Trends

Home sales index has increased by 32 percent since 1994.

changes and trends21
Changes and Trends

Median home prices have increased 97 percent, from $118250 to $232900.

analysis
Analysis
  • Home sales began increasing before the drop in interest rates.
  • Local sales have followed the upward trends seen at the state and national levels.
projections
Projections
  • Housing affordability will become more problematic if housing prices continue to rise faster than incomes.
  • Some economists speculate there is a housing bubble.
retail sector
Retail Sector
  • Based on seasonally adjusted sales at a range of local retail businesses.
  • Measures spending on final goods and services.
retail sector trends
Retail Sector Trends

From 1994 – 2004 the retail sales index has increased 40 percent.

national retail trends
National Retail Trends

Retail sales increased 58 percent from 1994 – 2003.

analysis28
Analysis
  • Local retail sector did not follow the national trends during the early 1990’s.
  • More recently local retail has reflected the national trends.
projections29
Projections
  • Consumer confidence is currently high.
  • EDD predicts that employment in the retail trade sector will increase by 700 jobs from 2001 to 2008.
electricity consumption
Electricity Consumption
  • Based on seasonally adjusted electricity consumption.
  • Measures kilowatt hours of electricity used in Humboldt County.
quality of the data
Quality of the Data
  • Correlation between the index and the actual consumption is 100%.
  • Data are only received quarterly.
changes and trends32
Changes and Trends

From 1993 – 2004 electricity consumption has increased by 16 percent.

state level trends
State Level Trends

Statewide electricity consumption from 1994 – 2001 increased by 10 percent.

analysis34
Analysis
  • Local electricity consumption has followed statewide trends. Both increased rapidly in the late 1990’s, then dropped sharply with the onset of the energy crisis.
  • Recent data show local consumption is again trending upward.
projections35
Projections

The state electricity forecast predicts that consumption will increase through 2007.

hospitality sector
Hospitality Sector
  • Based on seasonally adjusted average occupancy each month at a cross section of local hotels, motels and inns
  • A measure of the number of tourists who visit the North Coast
  • Quality of data is very good
slide38
Unchanged 1994-2001
  • Drop in occupancy starting in 2002
slide41
New rooms added, so drop in occupancy rate may not indicate decreased visitors
  • (9% increase in rooms since 2001)
  • However, Index fell by 17%, so fewer visitors since 2001
slide42
Explanations

Humboldt County Hospitality

  • Unchanged 1994-2001
  • Drop in occupancy starting in 2002
  • Recent Recession (but why no increase during late 1990s boom?)
  • Higher gas prices starting 1999?
  • 9/11
hospitality sector projections
Hospitality Sector Projections
  • Depends on people’s willingness to travel
  • Depends on easy access to Humboldt County
  • EDD predicts employment in Hospitality increasing 22% from 2001 to 2008.
employment sector
Employment Sector
  • Based on seasonally adjusted total county employment as reported by the Employment Development Department
  • We report which sectors gained jobs and which sectors lost jobs
  • Quality of data is excellent
slide46
U.S. Employment Level

(dominated by upward trend)

slide47
Only 5% increase in Employment since 1994 (almost 15% nationally)
  • However, national population is growing much faster
slide48
Unemployment rate fell until 2001 then rose
  • Unemployment rate higher than state/national during boom, and similar during recession
manufacturing sector
Manufacturing Sector
  • Based on payroll employment and board feet of lumber production at county lumber companies
  • Lumber-based manufacturing generates 60 percent of total county manufacturing employment
  • Manufacturing is about 8 percent of total county employment
  • Quality of data is very good, but is only a fair representation of overall manufacturing
manufacturing sector projections
Manufacturing Sector Projections
  • EDD predicts employment in total manufacturing will decrease by 300 jobs (5.7%) from 2001 to 2008.
  • EDD predicts employment in lumber & wood products and sawmills will decrease by 800 jobs (13%) from 2001 to 2008.
composite index
Composite Index
  • Measure of overall economic activity
  • Weighted combination of the six sectors:
slide59
Index peaked in 2000, bottomed out in 2002
  • Less than 10% growth since 1994
humboldt county economy 1994 2004
Humboldt County Economy 1994-2004

More steady than national/state economy:

Grew less during Boom, fell less during Recession

Similar pattern to rural U.S.:

  • Sharpest decline in Manufacturing
  • Uneven record in Hospitality, Energy
  • Largest gains in Retail/Housing
humboldt county economy 10 year projections
Humboldt County Economy 10-year Projections
  • Aging of constant total population
  • Continued declines in Manufacturing
  • Increases in Services (low and high value added)
  • Vulnerable to government budget reductions
  • Cooling in Housing market
  • Moderate overall growth
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