The State of the Economic recovery

The State of the Economic Recovery

2012 NAIOP State Conference

Ted Abernathy [email protected]

Demographic Shifts

Specialization

Intensifying Competition

Corporate Integration

Technology (Speed)

The Omni Customer

Natural Resources Urbanization

Global Interdependence

Complexity

Changing Institutions

Radical Decentralization

Community Resilience

Trends Changing Our World

The Role of Talent

“Everyone has a plan ‘till they get hit in the mouth” Mike Tyson

The Last Decade Was….Not Good

27%

22%20%

-1%-5%

0%

5%

10%

15%

20%

25%

30%

1970-1980 1980-1990 1990-2000 2000-2010

Source: Peter Linneman, NAI Global

Employment

The Last Decade Was….Not Good

27%

47%

61%

-3%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

1970-1980 1980-1990 1990-2000 2000-2010

Source: Peter Linneman, NAI Global

Real HH Income

The Last Decade Was….Not Good

34%

40% 40%

17%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1970-1980 1980-1990 1990-2000 2000-2010

Source: Peter Linneman, NAI Global

Real GDP

USA Total Nonfarm Payroll

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1961 1064 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

Source: BLS, Jan 2012

In thousands

Unemployment SummaryJanuary 2011

13.8%

8.7%7.7%

4.1%

0%

2%

4%

6%

8%

10%

12%

14%

Less thanHS

HS Grad SomeCollege

BA Plus

National Unemployment rate in January, 8.3%, down from 9.4% in December 2010

For Whites (7.4%), Blacks (13.6%), Hispanics (10.5%)

Source: BLS Jan 2012

Unemployment Rate By Education

Employment Monthly Net Change 2000- Jan 2012

-800

-600

-400

-200

0

200

400

600

2000 2008

Source: BLS Nov 2011

In thousands

2012

US % Employment Change December 2010-December 2011

1.2%0.8%

1.6%1.2%

0.2%

2.6%

2.0%1.9%

-0.6%-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%

Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted Source: BLS, Jan, 2012

Total % Manufacturing Employment Change December 2010-December 2011

1.60%1.78%

1.50%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%

United States American South Non-SouthernStates

Source: BLS, Jan, 2012

Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted

The American South States and Territories represent 34.3% of all US Manufacturing employment in Dec 2011

Projected USA Job Growth 2012

2.0%

-0.3%

0.6%1.1%

2.1% 2.3% 2.2%

-0.9%

-2%-2%-1%-1%0%1%1%2%2%3%

Construction

Manufact

Trade

Finance/Ins

Prof/Tech

Education/H

ealth

Leisure/Hospitality

Governm

ent

Source: Moody’s Analytics, Jan 2012

The Stock Market

(NATIONAL)

The United States in the Global Economy

Demographic Shifts

Specialization

Intensifying Competition

Corporate Integration

Technology (Speed)

The Omni Customer

Natural Resources Urbanization

Global Interdependence

Complexity

Changing Institutions

Radical Decentralization

Community Resilience

Trends Changing Our World

The Role of Talent

Top % GDP Growers in 20121) Macau2) Mongolia3) Libya4) Iraq5) Angola6) Niger7) China8) Ethiopia9) Rwanda10) Laos

Source: The Economist, The World in 2012

Global Unemployment Rates

8.3%

4.6%4.1%

7.6%

10.7%

5.2%

9.8%

5.5%6.6%

0%

2%

4%

6%

8%

10%

12%

US Japan China Canada Euro Area Australia India Brazil Russia

Source: Economist March 10, 2012

Projected GDP Growth 2012

2.1% 1.7%

8.2%

2.0%

-0.6%

3.1%

6.9%

3.3% 3.2%

-5%

-3%

-1%

1%

3%

5%

7%

9%

US Japan China Canada Euro Area Australia India Brazil Russia

Source: Economist March 10, 2012

Projected Consumer Prices 2012

2.1%

-0.3%

3.8%2.1% 2.0% 2.8%

8.1%

5.4% 5.7%

-5%

-3%

-1%

1%

3%

5%

7%

9%

US Japan China Canada Euro Area Australia India Brazil Russia

Source: Economist March 10, 2012

Impact of the “Great Recession”Difference in Real GDP/Person 2007-2012

-5% -3% -3% -1%

4%10%

14%

34%

51%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

UnitedKingdom

UnitedStates

France Japan Germany Russia Brazil India China

Source: The Economist, The World in 2012

U.S. Exports 2009-2011

$-$20,000$40,000$60,000$80,000

$100,000$120,000$140,000$160,000$180,000$200,000

2009-Jan

2009-June

2009-Nov

2010-April

2010-Sept

2011-Feb

2011-July

Dec

Exports

44% Increase

Source: BLS Sept 2011

NC Exports as a % of GMP- 2010

5.7% 5.6%4.6%

7.5%

1.5%2.6%

12.0%

8.1%

10.7%

3.4%

13.5%

8.1% 7.5%

0%

2%

4%

6%

8%

10%

12%

14%

Asheville

Burlington

Charlotte

Durham

Fayetteville

Goldsboro

Greensboro

Greenville

Hickory

Raleigh

Rocky Mount

Wilm

ington

Winston Salem

Source: US Metro Economies. HIS Insight, Jan 2012

Demographic Shifts

Specialization

Intensifying Competition

Corporate Integration

Technology (Speed)

The Omni Customer

Natural Resources Urbanization

Global Interdependence

Complexity

Changing Institutions

Radical Decentralization

Community Resilience

Trends Changing Our World

The Role of Talent

North Carolina in a Global Economy

Southern States 5-Year Employment Changes

-114,000-21,200

-762,300

-307,000

-45,900

57,000

-59,800-134,800

-43,000

-222,500

23,000

-85,100-127,200

451,100

-83,700-3,600

-900,000

-700,000

-500,000

-300,000

-100,000

100,000

300,000

500,000

AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV

Source: U.S. BLS, Dec, Measured Nov 2006- Nov 2011

Total -1,478,000 lost jobs

Southern States 5-Year Employment Changes

-5.7%

-1.8%

-9.5%

-7.5%

-2.5%

3.0%

-2.3%

-4.9%-3.8%

-5.4%

1.5%

-4.4%-4.6%

4.4%

-2.2%-0.5%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV

Source: U.S. BLS, Dec, Measured Nov 2006- Nov 2011

Southern States 1-Year Employment Changes

6,900 7,700

114,600

-14,000

31,80047,400

24,700

-3,900

2,70018,900

41,700

17,80031,200

205,100

35,60010,100

-50,000

0

50,000

100,000

150,000

200,000

250,000

AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV

Source: U.S. BLS, Dec, Measured Dec 2010- Dec 2011

Total +578,300 gained jobs

Southern States 1-Year Employment Projections 2012

1.5% 1.5%

2.2%

1.7%2.0%

1.8%

-0.1%

0.8%0.6%

1.2%1.4% 1.2%

1.4%

2.0%

1.0%1.1%

-1%

0%

1%

2%

3%

AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV

Source: Moody’s Analysis and USA Today Jan 11,2012

% Employment Change Last 10 Years 2000-2010

-7.0%

2.0% 2.3%1.0%

7.4%

-5.9%

10.6%

-12%

-7%

-2%

3%

8%

13%

Advantage West Charlotte Eastern Northeast Southeast Piedmont Triad ResearchTriangle

Source: NCESC

% Employment Growth Last 12 Months Dec 2010- Dec 2011

0.4%0.4%

1.4%

0.5% 0.5%

2.0%

1.0%

0%

1%

1%

2%

2%

3%

Advantage West Charlotte Eastern Northeast Southeast Piedmont Triad ResearchTriangle

Source: NCESC

% Unemployment By Region2000- December 2011

0%2%4%6%8%

10%12%14%

Advantage West Charlotte EasternNortheast Southeast Piedmont TriadResearch Triangle

Source: NCESC

Regional Comparisons

Educational Attainment-% BA plus

24%

26%32%

23%

27%24% 24%

30%27%

41%

31%

0%

10%

20%

30%

40%

50%

Piedmont Triad

Birmingham

Charlotte

Greenville/Spartan

Jacksonville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh/Durham

Richmond

Source: US Census, 2009, PTP Research

Research Activity

$255

$405

$23$197 $186 $149

$51 $51

$264

$1,667

$160

$0

$500

$1,000

$1,500

$2,000

Piedmont Triad

Birmingham

Charlotte

Greenville/Spartan

Jacksonville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh/Durham

Richmond

Source: NSF, PTP Research

In $millions

Metropolitan GDP Per Capita 2010

$42,619$41,990

$42,833

$58,607

$36,331$33,206

$40,070$38,943

$40,861 $44,011$45,935

$42,722$45,386

$70,260

$45,446

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000$80,000

Greensboro/HP

Winston Salem

Birmingham

Charlotte

Greenville

Spartanburg

Jacksonville

Knoxville

Louisville

Memphis

Nashville

VA Beach

Raleigh

Durham

Richmond

Source: BEA, December 2011 Chained 2005 dollars

Metropolitan GDP Changes 2010

3.9%

2.4%

0.8%

2.6%

3.9%3.7%

2.1%

4.2%3.6%

1.9%

4.6%

0.4%

5.2%

6.6%

1.6%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Greensboro/H

P

Winston Salem

Birmingham

Charlotte

Greenville

Spartanburg

Jacksonville

Knoxville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh

Durham

Richmond

Source: BEA, December 2011

PTP/RTRP/Charlotte Job Shifts 1990-2010

-80%

-30%

20%

70%

120%

170%

Go

vern

me

nt

Uti

litie

s

Co

nstru

ctio

n

Man

ufact

Trade

Trans/W

are

Info

rmati

on

Finan

ce/In

s

Pro

f/Tech

Edu

catio

n

He

alth

Arts/En

ter

Acco

m/Fo

od

PTP RTRP Charlotte

Source: NCESC

Demographic Shifts

Specialization

Intensifying Competition

Corporate Integration

Technology (Speed)

The Omni Customer

Natural Resources Urbanization

Global Interdependence

Complexity

Changing Institutions

Radical Decentralization

Community Resilience

Trends Changing Our World

The Role of Talent

Demographics

Growth- Demographics

Between 2010-2020 3 out of every 4 new workers in the USA will be Latino

USA Annual Population Growth

0.97% 0.96% 0.95%0.88%

0.83%0.73%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Source: Brookings Jan 20, 2012

Growth

Last decade US population grew at the lowest rate since the great depression

Annual Population Growth

0%

1%

1%

2%

2%

3%

3%

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

USA NC SC VA GA

Source: Brookings Jan 20, 2012

Annual Population % Change Rates 2001-2010

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Greensboro Winston-Salem Raleigh DurhamGreenville Spartanburg Charlotte National

Source: U.S. Bureau Intercensal Population Estimates, SYNEVA Economics, Nov 2011

Raleigh

Charlotte

USA

2000-2010 Population Growth

136,127

75,809

427,590

107,562

222,846

121,591110,896

278,145

95,313

411,283

161,294

0

100,000

200,000

300,000

400,000

500,000

Greensboro&W

S

Birmingham

Charlotte

Greenville/Spar

Jacksonville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh/Dur

Richmond

Source: Proximity, 2012

2000-2010 Percentage Population Growth

12% 13%

7%

32%

14% 12%

20%

10% 9%

21%

6%

42%

18%15%

0%

10%

20%

30%

40%

50%

Greensboro

Winston salem

Birmingham

Charlotte

Greenville

Spartanburg

Jacksonville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh

Durham

Richmond

Source: Proximity, 2012

Growth- Demographics

Southern States 5-Year State House Price Index Changes

-10.3%

3.2%

-44.2%

-25.7%

-2.4%-0.1%

-23.0%

-11.0%-9.0%-7.8%

3.3%

-10.3%-5.9%

3.9%

-13.6%

-0.9%

-50%

-40%

-30%

-20%

-10%

0%

10%

AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV

Source: Federal Housing Finance Agency, Dec 2011

Seasonally Adjusted, purchase only 2011 3Q

Housing Prices Peak to 3rd Qrt. 2011

-29.0%

-16.6%-18.8%-20.3%

-14.8%

-41.7%

-14.2%-13.9%

-21.5%

-15.3%

-25.8%

-14.4%

-25.9%

-50%

-40%

-30%

-20%

-10%

0%

10%

100 Metro

Average

Greensboro/H

P

Birmingham

Charlotte

Greenville

Jacksonville

Knoxville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh

Richmond

Source: Brookings Metro Monitor, Third Quarter 2011

Housing Prices Trough to 3rd Qrt. 2011 Recovery

0.4% 0.0%0.6%

0.2% 0.0% 0.0%

0.8%

0.0%

1.2%

0.1% 0.0%

0.7%

0.0%

-3%

-2%

-1%

0%

1%

2%

3%

100 Metro

Average

Greensboro/HP

Birmingham

Charlotte

Greenville

Jacksonville

Knoxville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh

Richmond

Source: Brookings Metro Monitor, Third Quarter 2011

Home Prices Forecast 2012

-6.1%-5.3%

-4.3%

-7.5%

-4.4%

-3.2%-2.8% -3.1%-2.8%

-5.3%

-3.8%-4.5%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

Greensboro

Birmingham

Charlotte

Greenville

Jacksonville

Knoxville

Louisville

Mem

phis

Nashville

VA Beach

Raleigh

Richmond

Source: Housing Predictor, December 27, 2011

Rankings and Branding

Branding- Ranking, Desirable Places for Doing Business

Number of Listings in 14 Top Rankings Milken Institute: Best Performing

Cities Brookings: Metro Monitor CIO: Top 10 Cities for Technology

jobs Forbes: The Best Cities for Jobs Gigaom: Top 10 Cities with the Best

Broadband Fast Company: Fast Cities of 2011 Newgeography: America’s Biggest

Brain Magnets Forbes: Best Places for Businesses

and Careers Relocate America: Top 10 Recovery

Cities Newgeography: Best 25 Cities for job

Growth Forbes: America’s Most Innovative

Cities CNNMoney: Best Places to Live Forbes: Most Wired Cities Area Development: Select Regional

Surveys

8- Austin, Denver, Seattle7- Raleigh6- Boston, Charlotte, Dallas, Oklahoma City,

San Antonio5- Houston, Lincoln, New York, Pittsburg, Salt

Lake City4- Albuquerque, Anchorage, Baltimore,

Bismarck, Bloomington, Boulder, College Station, Colorado Springs, Columbia. Durham, El Paso, Fargo, Huntsville, Little Rock, McAllen, Omaha, San Diego

3- Ames, Augusta, Baton Rouge, Bethesda, Buffalo, Charleston, Corpus Christi, Council Bluffs, Des Moines, Fayetteville, Fayetteville, Fort Collins, Fort Worth, Hartford, Honolulu, Iowa City, Jacksonville NC, Kansas City, Kennewick, Killeen, Lafayette, Las cruces, Lawton, Lexington, Logan, Louisville, Morgantown, Nashville, Philadelphia, Provo, Ogden, Sioux Falls, St Louis, St Joseph, Springfield, VA Beach, Yakima

Source: Area Development Summer 2011

What Is the New Normal?

“The future is not some place we are going to, but one we are creating.”

John Schaar

40 Years Ago Alvin Toffler Had a Few Thoughts

“Is the dizzying disorientation brought on by the premature arrival of the future, a product of the greatly accelerated rate of change in society.”

Elephants and Donkeys and the Tea Party (and Occupy)

Oh My!

“The latent causes of faction are thus sown in the nature of man… A zeal for different opinions concerning religion, concerning government, and many other points.”

James Madison, Federalist #10

The American Dream

“life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement, regardless of social class or circumstances of birth.” American Dream, James Truslow Adams, 1931

Vision For America Take 10 seconds and think about America

in 2050

Newsweek Magazine

Rising Above the Gathering Storm, Revisited

“When I compare our high schools to what I see when I am traveling abroad, I’m terrified for our workforce of tomorrow.”

(Bill Gates)

Source: Members of the Committee, Prepared for the National Academy of Science, 2010

“Whether you believe you can do a thing or not, you

are right.” Henry Ford

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