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Trade Response to Global Downturns Marney Cox Chief Economist SANDAG March 2010 Marney Cox Chief Economist SANDAG March 2010

Jan 12, 2016

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  • Trade Responseto Global DownturnsMarney CoxChief Economist SANDAGMarch 2010

  • US Trade Growth Outpacing GDP(Cumulative Growth Rate 1992-2008 current $)

  • *Global Recessions Impact on Trade(findings from World Bank Report, August 2009)

    Elasticity of Trade Value to GDP is near 4.0 Trade values fall more than volumesMean recovery time to previous peak 4 yearsImpacts vary across industries Least severe: consumer productsfood and beveragesMost severe: durable commoditiesiron and steelFollowing crisis deficit or surplus conditions return

  • US GDP-Measuring the Decline(Index Q-O-Q Change from start of recession)Start of RecessionQuarters

  • US Real Exports-Measuring the Impact(Index Q-O-Q Change from start of recession)Start of RecessionQuarters

  • US Real Imports-Measuring the Impact(Index Q-O-Q Change from start of recession)Start of RecessionQuarters

  • Whats Ahead?

  • US Continues to Shed Jobs (Index M-O-M Change from start of recession)Start of RecessionMonths

  • US Household Credit Debt Outstanding(Billions $)

  • US Savings Rate Rising(Monthly, SAAR)

  • Shape of Recovery & Role of Trade V, U, WNike swooshgradual & slowOrthodox viewtrade recovery is slow

    Value of trade falls more than volumeCommodity and asset prices under pressureMajority of trade is intermediate goodsFalling prices can increase trade volume

  • *SD Economic Opportunity is Knocking at Californias Southern Door

    Mexico is CA largest export marketOtay Mesa is CA/MX busiest trade border crossing1.5 million trucks per year $36B in trade 95% of regional freight movement is carried by truck

  • SD Value of Trade Has Nearly Tripled(San Diego Customs District, $Millions)

  • SD Trade Growth Outpacing GRP(Cumulative Growth Rate 1992-2008 current $)

  • SD Otay Mesa Commercial POECurrent Congested Conditions4.36 million working hours of delay annually

  • SD Border Delays Reduce Tradeand (Delay range: autos 45 min.-2hrs. Trucks 2hrs.-6hrs.)$0$4,000$8,000$12,000$16,000Exports to MexicoImports from Mexico$9,382$13,793Output (in millions)

  • Economic Growth (Border Delay Annual Impact to United States & Mexico)73,900 JOBS LOST =$8.63 Billion in OUTPUT LOST =23 Super Bowls4 Google Companies

  • SD SR11 Project Study Area

  • SD SR11 Project ProgressToll Legislation Approved SB 1486 (Ducheny)U.S. Presidential Permit ApprovedExchange of Diplomatic Notes with MexicoTier I Program EIS/EIR ApprovedScoping Document: Project Study Report Transportation Border Congestion Relief Program (TBCRP) Designation

  • SD SR11 Estimated Project Budget: $615-$715 MillionProgrammed Funding Available:State (STIP)Tier II Env./Eng.$13.0 MFederal (SAFETEA-LU)Tier II Env./Eng.$ .8 MState (Prop. 1B TCIF)Construction$75.0 MTotal $88.8 MRemaining Funds Needed: (Toll Funds/Other): $526.2 - 626.2 M

  • SD SR11 Project ScheduleDevelop Financial Strategy2009Tier II Environmental Doc.2010Design/Right of Way2011Begin Construction2012-13Open New Trade Gateway2014-15

  • Trade Responseto Global DownturnsMarney CoxChief Economist SANDAGMarch 2010

    Let me review the applications, many are quite specific for SANDAG, and have to do with our Regional Transportation Plan.

    It is very important, that we commissioned this study because we thought it would be of interest to stakeholder groups such as yourselves, so I am very pleased to be part of todays discussion

    I want to review the many data sources that we had to analyze to put this together, and emphasize that while we had a top shelf economics and freight forecasting team, freight flow data has many challenges, holes, and a general need for a certain level on informed interpolation.Some things we all know

    Otay Mesa the largest gateway in volume and value1.5M trucks year$54B value of all imported and exported goods95% truck move region.BUT the study includes something that we did not previously know with accuracy, that is Internal circulation of good, goods that are the regular items picked up and delivered in the region (food, clothing, consumer durables etc)

    (You can add to the new items from the study: OD data, Assessing what existing database was missing, and Identifying capacity issues and their implication on the freight flow.)Typical day at the OM commercial crossing (June 2006 at noon).This chart shows the economic opportunities for growth in trade for both exports to Mexico and Imports from Mexico.

    The US economic impacts of $1.2B represent about 13% of exports to Mexico in 2005 via de Otay Mesa and Tecate POEs.

    Mexicos economic impacts of more than $2B represent 15% of imports through OM and Tecate in 2005.

    Project purpose-relieve congestion-tolled facility

    Project Partners: GSA, Mexico, land owners, CBP, etc.Project Description: 2.5 miles east of Otay Mesa, etc.Environmental Document to clear both freeway and POE Fluctuating costs/revenuesSet-up for Funding Slide

    Preliminary Cost EstimateFinal Design UnknownProject Activities:Discuss Financial StrategyTeam is well underway with the Tier II Environmental and Engineering Studies for SR 11, federal POE, and new CVEF or truck safety inspection facility (Project Level Engineering and Environmental)Complete Draft Tier II EIS/EIR late 2009/early 2010; Final Fall/Winter 2010Working with Property Owners and land use authority (County) to preserve ROWWorking to gather funds from available resources and pursue advanced funding needed for design, R/W, and construction All in an effort to leverage against the pending toll revenue debt-ratio

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