The Current Economic Performance of the Commonwealth of Virginia

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1 11/19/14 Fairfax County Chamber of Commerce Board of Director s Meeting The Virginia and the Northern Virginia Economies Continue to Lag the U.S. Economy Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Director, Center for Regional Analysis George Mason University November 19, 14 The Current Economic Performance of the Commonwealth of Virginia GMU Center for Regional Analysis 1

2 11/19/14 The Economic Performance of Maryland, DC and the Commonwealth of Virginia in 13 State GSP Growth 1-13 US Ranking US 1.84% Virginia.6% 48 th Maryland.1% 49 th DC* -.49% 51 st Source: U.S. Bureau of Economic Analysis Virginia Payroll Job Change: Private Sector The Great Recession and Recovery To Sept 14 Ranked by Size in 14 Prof. & Bus. Svcs Educ & Health Svcs Retail Trade Leisure & Hosp. Manufacturing Other Services Financial Construction Transp. & Util. Wholesale Trade Information Mining & Logging (s) Total -94 Total 18 Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis Total Private Sector Job Losses ended in March GMU Center for Regional Analysis

3 11/19/14 The GSP* Effects of Job Change in the Commonwealth of Virginia, March 8-Sept 14 (in billions of 14$s) Job Average Total Change GSP Value GSP Value -94,4 $146,964 $43,66,1, +179,5 $113,193,318,143, - 114,9 - $,948,58, Source: GMU Center for Regional Analysis *Gross State Product Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Commonwealth of Virginia: Job Change by Sector Sept 13 Sept (s) Total = 8,3 (3.) (.) (1.) Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis GMU Center for Regional Analysis 3

4 11/19/14 The GSP* Effects of Job Change in the Commonwealth of Virginia, September (in billions of 14$s) Job Average Total Change GSP Value GSP Value - 19, $143,145 $,719,755, +7,3 $13,88 3,551,4,4 + 8, ,647,4 1 Source: GMU Center for Regional Analysis *Gross State Product 1 GSP equals $464.9 billion in 14; $831.6 million =.% growth rate 1. Unemployment Rates By Select State, DC 5.9 U.S. 6.3 MD VA.. Source: Bureau of Labor Statistics (Seasonally Adjusted) GMU Center for Regional Analysis 4

5 11/19/14 The Current Performance and Near-Term Outlook for the Northern Virginia Economy Summary for Federal Spending Trends in the Washington Metropolitan Area, 1-1 Federal Procurement Outlays declined $13.45 billion or 16.% between FY 1 and FY 13. Federal employment has declined since peaking in July 1, losing 4, jobs or 6.%; 55% or 13,1 of these jobs were located in the District; Federal payroll declined by $3.4 billion or 8% between FY 1 and FY 13 and will continue to decline as the workforce shrinks and older workers retire and are replaced by younger workers. GMU Center for Regional Analysis 5

6 11/19/14 15 Largest Job Markets GRP Percent Change: % 5.% 4.% Washington -.8% 3.%.% 1.%.% -1.% -.% Source: Bureau of Economic Analysis, GMU Center for Regional Analysis The Household Income Effects of Structural Change in Northern Virginia Jurisdiction Median HH Income 13* Change from 9* Arlington County $1,51 - $1,675 Fairfax County 111,79 - $49 Fauquier County 8,83 - $1,98 Loudoun County 116,768 - $7,83 Prince Wm County 95,68 - $,34 Spotsylvania County 93,454 - $1,869 Stafford County 71,91 - $,757 Alexandria City 86,775 $,985 Northern Virginia $13,381 - $,11 Source: U.S. Census, ACS 1-Year; GMU Center for Regional Analysis *in 13 dollars GMU Center for Regional Analysis 6

7 11/19/14 (s) Annual Data Annual Job Change Northern Virginia, Annual Month over Year Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector Sept 13 Sept 14 Northern Virginia (s) Total 4,9 3 (.) (1.) Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 6 GMU Center for Regional Analysis 7

8 11/19/14 The GRP* Effects of Job Change in the Northern Virginia, September (in billions of 14$s) Job Average Total Change GRP Value GRP Value - 11,1 $179,43 $1,991,695, +16, $19,883,78,18, + 4,9 + $86,433,8 1 Source: GMU Center for Regional Analysis *Gross Regional Product 1 Northern Virginia s GRP equals $9.7 billion; $86.4 million =.4% growth Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector Aug 14 Sep 14 Northern Virginia (s) Total -1,5 (.) (1.) Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 13 GMU Center for Regional Analysis 8

9 11/19/14 (s) Average Wage and Change in Employment, Washington Metro Area Change in Employment (left axis) $ Professional & Business Services 17.5 $51.4 Education & Health Services 13 Wage (right axis).7 $4.1 Leisure & Hospitality (s of 13 $s) $1 $9 $8 $7 $6 $5 $4 $3 $ $1 $ Source: Bureau of Labor Statistics, GMU Center for Regional Analysis (s of 13 $s) 7. Average Wage, Washington Metro Area Source: Bureau of Labor Statistics, GMU Center for Regional Analysis GMU Center for Regional Analysis 9

10 11/19/14 New York Los Angeles Houston Dallas Chicago SF-Oakland Miami Atlanta Seattle Boston Detroit Phoenix Minneapolis WASHINGTON Philadelphia 15 Largest Job Markets Job Change: Apr 1 Sep Source: Bureau of Economic Analysis, GMU Center for Regional Analysis The Outlook for the Commonwealth of Virginia and Northern Virginia Economies GMU Center for Regional Analysis 1

11 11/19/14 % 6 4 U.S. GDP and Virginia GSP U.S. Virginia Source: IHS Economics, GMU Center for Regional Analysis, Forecast: October 14 Principal Sources of Job and GSP Growth in Virginia, (in thousands) Growth Job % of Total Average Value Sectors Change Job Change Added per Job* Prof. & Bus. Ser $131,363 Construction $9,95 Education/Health $6,88 Hospitality Services $37,73 State and Local. 7.7 $71,1 Transportation $115,44 Sub-Total $97,86 Overall Total $13,149 Sources: IHS Economics; GMU Center for Regional Analysis *in 14 dollars GMU Center for Regional Analysis 11

12 11/19/14 Job and GSP Gains and Losses for The Commonwealth s Other Sectors, (in thousands) Job % of Total Average Value Change Job Change Added per Job* Federal Gov t $166,54 Retail Trade $59,873 Other Services $56,93 Financial Services $454,196 Information Services $37,47 Manufacturing 6..1 $187,41 Wholesale Trade $17,573 Military.3.8 $148,518 Subtotals Gains $169,338 Subtotals Losses $19,163 Net Job Change $13,149 Sources: IHS Economics; GMU Center for Regional Analysis *in 14 dollars % Economic Outlook (GRP), 1-18 Washington Area and Sub-State Areas (Annual % Change) NV MSA SM DC Source: GMU Center for Regional Analysis, Forecast: October 14 GMU Center for Regional Analysis 1

13 11/19/14 Rethinking The Local Economy s Future Exports are key to growing the economy. Scientific and Technical Services Higher Ed and Health Services Manufacturing Agriculture and Natural Resources Leisure and Hospitality Foreign Direct Investment Growing high value-added employment builds the residentially based economy and state and local tax bases. Fresh Approaches For Economic Development Identify the state s, region s and county s principal non-federally dependent economic assets and focus marketing strategies on these sources of future growth; Unify local, regional and state approaches to economic development to reduce their conflicting messages and predatory practices; GMU Center for Regional Analysis 13

14 11/19/14 Strengthen the business-to-business base in the state, region and county by reducing the unproductive public costs of business operations; Re-brand the state s, region s and county s economic development images and business investment climates to build on their competitive assets in the national and global economies; Invest in the state s, region s and county s infrastructure to strengthen their competitive positions with their peers; and, Increase the capacity of the state s and area s educational and skills training institutions to respond to the workforce development requirements for on-going up-skilling of current workers and to prepare new-to-the-labor market workers for the new and emerging economies. GMU Center for Regional Analysis 14

15 11/19/14 Thank You & Questions cra.gmu.edu Save The Date: GMU/Cardinal Bank Economic Conference January 15, 15 GMU Center for Regional Analysis 15