ODU 2015 Regional Forecast Presentation

7/26/2019 ODU 2015 Regional Forecast Presentation

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Old Dominion University2015 Regional Economic

Forecast

January 28, 2015

Professor Vinod AgarwalInterim Dean

trome !ollege o" #usiness

www.odu.edu/forecasting


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$resentation outline

I. 2014 Economic Performance

a) Regional and National Economies

) !efense" defense" and more defense

c) #i$ilian Nonfarm %os

d) Residential &ar'et in (amton Roads

e) *a+ale ,ales and (otel Re$enue

f) Port and #argo

II. -orecast for 201


3/46

%

Old Dominion University 201& 'am(ton Roadscorecard

,ource ureau of Economic Analsis and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect

)ctual!*ange201&

$redicted!*ange201&

Real +R$200-.100/

221 220


4/46

Rate o" +ro3t* o" +D$ U/ and +R$ 'am(tonRoads/4 2000201&

,ource ureau of Economic Analsis and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.!ata on 6!P incororates latest EA re$isions in ,etemer 2014

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e-4

-3

-2

-1

0

1

2

3

4

5

6

2.32

2.21

Percent change real GDP Percent change real GRP

Growth Rate


5/46

5

'am(ton Roads +ross Regional $roduct )ttri6uta6le to DOD(ending4 1-8&201&

,ource .,. !eartment of !efense " .,. !eartment of #ommerce" and te 3ld !ominion ni$ersit Economic


6/46

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

300

350

400

450

500

550

600

650

700

BCA 2011 Se!e"trat#$n BBA 2013

B#ll#$n" $% &$llar"

7

!a(s on Discretionary De"ense (ending4 F 2012 toF 2021

,ource #A2011"udget Re7uests for -814" #3 ,e7uestration date Reort and te 3ld !ominion ni$ersit Economic

9*e ##) increased t*e discretionary

de"ense s(ending ca( "rom :5205#in201& to:521%# only 6y015/ in F 2015 It is e;(ected toincrease to :52%1# only 0%5/ inF2017

e


7/46=

#udget (assed 6y t*e !ongress "or F 2015

)ctiveduty military "orces will srin' 51,000*ese cuts will mostl a9ect teArm" wit some cuts coming from te &arinesand Air -orce. 9*e im(act on t*e >avy 3ill 6e

minimal

#udget (rovides some good ne3s "or'am(ton Roads "or 2015 and 6eyond4

!ongress "avors maintaining anE?E@E>carrier Aeet

(rovides "unding "or construction o"Gerald R. Ford;and "or re"uelingand over*aul o" George Washington


8/468

#udget (assed 6y t*e !ongress "or F 2015contd/

ReBected re


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Estimated Direct DOD (ending in 'am(tonRoads4 2000 to 2015

,ource .,. !eartment of !efense and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect. :Includes -ederal #i$ilian and

0illions

of

;

9

0

5

10

15

20

25

10.00

19.32

18.35

18.84

18.74

(ending increased "rom 2000 to 2012 6y57on an annual 6asis It is e;(ected to6e a6out %lo3er in 2015 "rom its (ea in2012


10/4610

Cilitary Em(loyment in 'am(ton Roads4 2001 to201%

,ource ureau of Economic Analsis and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.

Cilitary Em(loyment *as declined6y 2%= in 201% "rom its (ea in200%


11/4611

9otal Cilitary !om(ensation in 'am(ton Roads42001 to 201%


Even t*oug* military em(loyment (eaed in200%, total military com(ensation (eaed in

2010 and *as steadily declined In 201%, itis 7- 6elo3 2010


12/4612

)verage Cilitary !om(ensation in 'am(tonRoads4 2001 to 201%


For t*e rst time since 1-7-,average military com(ensationdeclined in 201%6y 27


13/461%

Estimated )verage !om(ensation ages, alaries andFringe #enets/ elected !ategories "or 'am(ton Roads42012 and 201%

,ource .,. ureau of Economic Analsis "2== ;=?"=@ 0.?B

tate and ?ocal+ovt Em(loyees

;"40@

;@"0@?

1.2B

$rivate >on"arm :%-,8 :&0,%


14/46

1&


,ource 3ld !ominion ni$ersit Economic -orecasting Pro5ect. -igures for calendar ear 2014 includeredicted $alues for !ecemer 2014. ::Emloment data for 201C and 2014 will e re$ised .,.D, in &arc /Aril 201.

Actual Change2014*

Pre!cteChange 2014

C!"!l!an#$%lo&$ent** 0.21' (1.5'

)ne$%lo&$entRate**

5.56' 5.3'


15/46

15

)nnual !ivilian Em(loyment JO#/ in 'am(tonRoads4 1--- to 201&

650

675

700

725

750

775

800

707.3

721.0

731.3734.8738.6

751.0

762.1768.6

776.6767.6

742.2736.7739.2

745.2752.7 754.3

,ource .,. !eartment of Daor #E, data and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.Not seasonall ad5usted. !ata will e re$ised in &arc 201

'R economy created only 1,700 Bo6sin 201&e are still a6out 22,000 Bo6s 6elo3our (re recession level


16/46

17

Jo6 +ains and ?oses In 9*ousands/ in 'am(tonRoads4 200= and 201&

Educational ervices

Federal and tate +overnment

'ealt* care and ocial )ssistance

20 15 10 5 0 5 10 15 20

02

2&

2-

%%

%5

%8

&&

&55&

1&%

25

&0

1&%

*olesale 9rade

?osersBo6s/

+ainers

Bo6s/

Canu"acturing

Finance

9rans(ortation andare*ousing

?ocal

+overnment$ro"essional and #usinesservices

In"ormation

!onstruction

Retail 9rade

?eisure and 'os(itality

,ource .,. !eartment of Daor #E, data and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.Not seasonall ad5usted. !ata will e re$ised in &arc 201. Numers reresented ao$e for eac ear are


17/46

1=

Jo6 +ains and ?oses In 9*ousands/ in 'am(tonRoads4 201% and 201&

Finance

?eisure and 'os(itality

Educational ervices

'ealt* !are and ocial )ssistance

Retail 9rade

&00 %00 200 100 000 100 200 %00 &00

2=5

1&7

0580%&

0%2

01=

01&

01&

015

100

10-

1--

27=

?osers Bo6s/ +ainersBo6s/

*olesale 9rade

?ocal +overnment

In"ormation

,ource .,. !eartment of Daor #E, data and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.Not seasonall ad5usted. !ata will e re$ised in &arc 201. Numers reresented ao$e for eac ear are

Federal and tate +overnment

!onstruction

9rans(ortation andare*ousing

$ro"essional and #usinesservices

Canu"acturing


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18

)verage $rivate ector eely ages in electedIndustries in 'am(ton Roads

'n&!"tr( 4th)!arter 2013

Acc$**$&at#$n + F$$& Ser,#ce" -303

Reta#l ra&e -457

/ealth Care + S$c#al A""#"tance -887C$n"tr!ct#$n -938

'n%$r*at#$n -1044

ran"$rtat#$n +areh$!"#ng -1066

an!%act!r#ng -1120

h$le"ale ra&e -1176

F#nance + 'n"!rance -1234

Pr$%e""#$nal + B!"#ne"" Ser,#ce" -1430

,ource .,. !eartment of Daor uarterl #ensus of Emloment and Fages in Pri$ate ,ector andte 3ld !ominion ni$ersit Economic -orecasting Pro5ect..


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Residential 'ousingCaret

During 201&

1-


20/46

20

@alue o" #uilding $ermits "or One Unit Family 'omes in'am(ton Roads4 1--1201&

,ource .,. ureau of te #ensus and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect

@alue o" (ermits decreased6y =0 in201&G Our "orecast 3as an increase o"=- It is &% 6elo3 its (ea in 2005

0

200

400

600

800

1000

1200

1400

1600

1,338

760

Millionsof$


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21

>um6er o" E;isting and >e3 !onstruction 'omesold in 'R 20021&

ear #+!,t!ng o$e, ol /ew Con,truct!ono$e, ol Percent /ewCon,truct!on

2002 19869 4969 20.0'

2003 21421 4757 18.2'

2004 23548 4587 16.3'

2005 24755

4379 15.0'

2006 22405 4327 16.2'

2007 19154 3912 17.0'

2008 15046 3178 17.4'

2009 15851 2673 14.4'

2010 14703 2265 13.4'2011 15818 2366 13.0'

2012 16856 2664 13.6'

2013 18791 2878 13.3'

2014 18700 2485 11.7'

Source: Real Estate nfor!ation "et#or an% &l% 'o!inion (ni)ersit* Econo!ic +orecastin -roect. nfor!ation 'ee!e% Relia/le ut notuarantee%. +iures reorte% ere reresent onl* tose roerties tat are liste% trou RE" /* RE" !e!/ers an% !a* not reresent all ne#

construction acti)it* in our reion. .


22/46

22

Cedian ale $rice o" E;isting Residential 'omesin 'R 20021&

ear Cedian $rice$ercent c*ange year

to year

2002 :117,-00 =%

200% :1%0,000 112

200& :157,500 20&

2005 :1-2,000 22=2007 :21&,-00 11-

200= :22%,000 %8

2008 :21-,000 18

200- :20=,000 55

2010 :20%,-00 15

2011 :180,000 11=

2012 :185,000 2=8

201% :1-0,000 2=0

201& :1-%,205 1=0,ource Real Estate Information Networ' and 3ld !ominion ni$ersit Economic -orecasting Pro5ect.Information deemed reliale ut not guaranteed.

-0 increase"rom 20020=

1- decreaseFrom 200=11


23/46

Jan Fe6 Car )(r Cay Jun Jul )ug e( Oct >ov Dec0

2,000

&,000

7,000

8,000

10,000

12,000

1&,000

17,000

200= 2010 201&

2%

Estimated Inventory o" E;isting Residential'omes as Ceasured 6y )ctive ?istings In 'R4200=, 2010, and 201&

,ource Real Estate Information Networ' Inc. and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect. Information deemed

)verage Jan 1--5 t*roug* Decem6er201&/ . =,81&


24/46

0

2

&

7

8

10

12

Estimated Cont*s o" u((ly o" )ll E;isting 'omes in'am(ton Roads#ased on )verage ales in t*e ?ast 12 Cont*s4 January1--7 H Decem6er 201&

2&,ource Real Estate Information Networ' and 3ld !ominion ni$ersit Economic -orecasting Pro5ect. Information deemedreliale ut not guaranteed.

)verage Jan 1--7 Decem6er 201&/ . 57% mont*s

Decem6er 201&4 5-0$ea4 102&>ovem6er 2010/


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E;isting Residential 'omes old and )verageDays on t*e Caret'am(ton Roads4 2000201&

25,ource Real Estate Information Networ' Inc. and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect. Information deemedreliale ut not guaranteed. !as on &ar'et is calculated from te date listed to te date under contract date for e+isting omes


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27

ummary on E;isting 'omes

Inventories *ave decreasedsu6stantially since 2010

Days on Caret *ave also decreased

>um6er o" 'omes old *aveincreased

u((ly o" *omes currently is at 5-0mont*s, slig*tly *ig*er t*an *istoric

average o" 57% mont*s #ut t*e median (rice o" *omes *ave

increased only slig*tly4 28 in 2012,

2= in 201%, and only 1= in 201&


27/46

0

5

10

15

20

25

%0

%5

)ctive ?isting o" Distressed 'omes REO *ortales/)s a $ercentage o" 9otal E;isting Residential 'omes?istings in 'am(ton Roads

2=,ource Real Estate Information Networ'


28/46

>um6er o" E;isting, *ort ale, and REOsResidential 'omes old'am(ton Roads4 2007 201&

28,ource Real Estate Information Networ' and 3ld !ominion ni$ersit Economic -orecasting Pro5ect. Information !eemedReliale ut not 6uaranteed.

Year All Sale"

200@ 22"40

200? 1="12

200> 1"04?

200= 1">4=

2010 14"@=@

2011 1">1?

2012 1@">@

201C 1>"?=1

201& 1>"?00

Sh$rt Sale"Percent

Sh$rt Sale"

C G1B

40 G1B

21? 1.4

=> C.>

?>4 .C

1"12? ?.1

1"@44 -81"?@= =.4

1"C4? =2

R Sale"Percent

R Sale"

@ G1B

22C 1.2

>CC .

2"2?1 14.C

C"021 20.@

&,21%

277C"CC? 1=.>

C"1?> 1@.=

2"?44 1&=


29/46

2-

'am(ton Roads Residential Foreclosure Fillings2007 to 201&

,ource Realt*rac and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect. N*, and RE3

2007 200= 2008 200- 2010 2011 2012 201% 201&0

5000

10000

15000

7&&

2,112

7,5%7

-,=-&

12,815

7,-88

8,27==,715

5,--7

Foreclosure lings "or 201& in 'am(tonRoads are less t*an 50 "rom its (ea in2010G declined 6y 21% in 201&,

com(ared to a decline o" 281 "or t*e


30/46

%0


,ource Virginia !eartment of *a+ation" ,mit *ra$el Researc and te 3ld !ominion ni$ersitEconomic -orecasting Pro5ect. :-igures for calendar ear 2014 include redicted $alues for !ecemer2014.

)ctual!*ange201&

$redicted!*ange 201&

9a;a6le ales 28 %7

'otel Revenue 50 2&


31/46

%1

9a;a6le ales, 'am(ton Roads4 1--7 to 201&

,ource Virginia !eartment of ta+ation and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.:-igures for calendar ear 2014 include redicted $alues for !ecemer 2014.

1996199719981999200020012002200320042005200620072008200920102011201220132014e0

5

10

15

20

25

20.56 20.93

!ll!on,

9a;a6le sales increased 6y 28 (ercentduring 201& and nally are a6ove its (eao6served in 200=


32/46

'otel Industry in

'am(ton Roads

%2


33/46

%%

'otel Revenue in 'am(ton Roads 1--7201&

,ource ,mit *ra$el Researc *rend Reort" %anuar 21" 201 and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect.

Des(ite a gro3t* o" 5 in 201&, 'otelrevenue are still 2- (ercent 6elo3 t*e(ea o6served in 200=

0

100200

300

400

500600

700

800?14.4 @=C.?

!ll!on, o


34/46

%&

$ercent !*ange in 'otel Revenue and RE@$)R201% to 201&

,ource ,mit *ra$el Researc *rend Reort %anuar 21" 201 and te 3ld !ominion ni$ersit Economic -orecasting

)A !rg!n!a a$%ton Roa,0'

2'

4'

6'

8'

10'

12'

14'

9.2'

6.7'

5.0'

8.3'

6.6'

5.0

R##/)#

R#PAR


35/46

%5

$ercent !*ange in 'otel Revenue 3it*in 'am(tonRoads4 201% to 201&


$,g ach /r Port, /new, $%t Che, u R0.00'

1.00'

2.00'

3.00'

4.00'

5.00'

6.00'

7.00'

8.00'

0.8'

6.5'

4.8' 4.5'

7.0'

5.0'


36/46

%7

RE@$)R in elected Carets 4 200= and 201&


2007 2014 PercentageChange

)A 65.54 74.28 (13.3'

Virginia $61.95 $59.42 -4.1%

a$%ton Roa, 52.90 49.30 -6.8'

Myrtle Beach $54.07 $64.12 + 18.7%

Coatal Carolina $55.8! $61.22 + 9.7%

cean C!t& 71.74 72.38 (0.9'

!rg!n!a each 64.64 67.22 ( 3.9'

"e#ort "e#&a'ton $41.49 $!7.69 -9.2%

"or(ol)*ort'oth $54.05 $47.48 -12.2%

,illia'rg $47.5! $!9.81 -16.2%

Cheaea)e((ol) $52.90 $4!.78 - 17.2%


37/46

9*e $er"ormance o" t*e$ort

During 201&

%=


38/46

%8

O(erating IncomeK?oss "or t*e $ort o" @irginia In Cillion:/ 4 201% and 201&

9imeO(erating

IncomeK?oss

8*! No$emer 201C :1=07

9D >ovem6er 201& :0&-

%ul troug No$emer

201C:==-

July t*roug*

>ovem6er 201&:552

,ource Virginia Port Autorit and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect..


39/46

%-

93entyFoot E


40/46

&0

+eneral !argo 9onnage at t*e $ort o" 'am(tonRoads4 1--1 to 201&

,ource Virginia Port Autorit and 3ld !ominion ni$ersit Economic -orecasting Pro5ect.

+eneral !argo 9onnage increased 6y 12 in 201&G3e "orecasted a &8 increase E;cluding July and)ugust, tonnage increased 6y 7&

0

5

10

15

20

25

1?.?C 1=.0@

3!ll!on, o4 :on,


41/46

&1

*y did t*e cargo increase in 201&L

+ro3t* o" 6usiness ande;(ansions "rom economicdevelo(ment eMorts

everal ne3 services startedcalling at t*e (ort in 201&

9*e $ortsmout* Carine 9erminal$C9/ reo(ened in )(ril "or s*ortterm e;(orts o" cars to !*inaG it6egan container o(erations in

Octo6er 201&


42/46

&2

Covement o" !ontainers at t*e $ort o"'am(ton Roads 6y 9y(e o" 9rans(ortation

,ource Virginia Port Autorit and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect

Cillionso"!ontainers

2011 2012 201C 20140.00

0.20

0.40

0.@0

0.>0

1.00

1.20

1.40

1.@0

1.101.21 1.27

1.37

Rail#arge 9ruc

9O9)?

$ercent o" containers moved 6y rail *as graduallyincreased "rom %00 in 2011 to %1- (ercent in

2012 and *as sta6iliNed at a6out %% (ercent


43/46

&%

)verage 9EUs (er !ontainer @essel !all2011 to 201&

,ource Virginia Port Autorit and te 3ld !ominion ni$ersit Economic -orecasting Pro5ect

>um6ero"9EUs

2011 2012 201C 20141"00

1"100

1"10

1"200

1"20

1"C00

1"C0

1"400

1,1581,201

1,3071,341

)verage 9EUs (er !ontainer @essel !allincreased 6y 8- in 201% and increased"urt*er 6y 27 (ercent in 201&


44/46

Forecast "or 2015

&&


45/46

Old Dominion University 2015 Forecast "or'am(ton Roads C)

2014 2015 Change

:-igures for calendarear 2014 include redicted $alues for !ec. 2014. 45

$*#nal Gr$"" Reg#$nal

Pr$&!ct$91.96B $95.49B

Real Gr$"" Reg#$nal

Pr$&!ct 2009:100; -84.82B-86.48B


46/46

2015 Regional ummary

?oo "or regional economic gro3t* to 6e 6elo3 its *al"century annual average o" %1 (ercent and 6elo3 t*at o"t*e nation

$ort, *ealt*care industries, and tourism are liely to *el(

t*e regions economic e;(ansion in 2015

ingle"amily *ome (rices in 2015 are liely to continue toincrease at a moderate (ace

Inventories, sale volume, and daysonmaret are all

moving in t*e rig*t direction Cont*s o" su((ly o"e;isting *omes are near t*eir *istoric average

?ingering distressed volume remains a concern

REOs a((ear to 6e one o" t*e driving "orces 6e*ind

ODU 2015 Regional Forecast Presentation

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