Kevin Klowden Director of the California Center, & Managing Economist for the Milken Institute

Transcription

1 California Economic Overview Kevin Klowden Director of the California Center, & Managing Economist for the Milken Institute (310) LAEDC Economic Forecast Wednesday, February 15, 2012 Los Angeles Downtown Marriot Los Angeles,CA

2 Job growth in California surpasses U.S. Non-farm employment Percent United States California Source: Moody s Analytics

3 Real GDP growth projection Percent change over previous year, Percent India China Forecast California United States Sources: Oxford Economics, Moody s Analytics, California Legislative Analyst Office, Milken Institute.

4 Best-performing California cities 2011 vs Best-performing California cities Rank according to 2011 index, Among Largest 200 metros Metropolitan statistical area (MSA) rank rank Metropolitan statistical area (MSA) rank rank Bakersfield, CA Sacramento Arden Arcade Roseville, CA San Jose Sunnyvale Santa Clara, CA Fresno, CA San Francisco San Mateo Redwood City, CA Visalia Porterville, CA Merced, CA Santa Cruz Watsonville, CA San Diego Carlsbad San Marcos, CA Riverside San id Bernardino Ontario, i CA Santa Barbara Santa Maria Goleta, CA Santa Ana Anaheim Irvine, CA Vallejo Fairfield, CA Santa Rosa Petaluma, CA San Luis Obispo Paso Robles, CA Oakland Fremont Hayward, CA Oxnard Thousand Oaks Ventura, CA Modesto, CA Los Angeles Long Beach Glendale, CA Stockton, CA Salinas, CA Source: Milken Institute. Source: Milken Institute.

5 Unemployment rate California vs. United States Percent California 8 6 United States Source: Moody s Analytics.

6 Unemployment rate California s Metros vs. United States Percent Silicon Valley Los Angeles United States 4 2 San Diego Source: Moody s Analytics.

7 Higher share unemployed for longer duration Unemployment by duration, California Percent Less than 5 wks 5-14 wks wks 27 wks and over Source: California Employment Development Department.

8 General fund revenues and expenditures California, FY to FY , change from previous year Percent Revenue and transfer Expenditure Source: California Department of Finance.

9 Foreclosure rates As percent of all loans, California vs. U.S., as of Q Percent California United States Source: Moody s Analytics.

10 Home sales Change on previous year, California vs. U.S., as of Q Percent California United States Source: Moody s Analytics.

11 Professional/business services led the recovery Year-over-year job growth by industry, California 12/ / /2011 Thousand of jobs Professional/Business Svcs. Government Education/Health Svcs. Trade/Transportation/Utilities Hospitalities Information Svcs Construction 21.3 Minning Other Svcs. Financial Svcs. Manufacturing Sources: U.S. Department of Labor, Wells Fargo Securities LLC.

12 Economy shifts towards services Professional and business services vs. manufacturing, California Jobs, Thousands Prof. & business services Manufacturing Sources: Bureau of Labor Statistics, Moody s Analytics.

13 California leads the way in clean technology Top venture capital states by number of companies, June 2010 Overall clean-tech innovation Number of Rank State companies 1 California Massachusetts 61 3 Texas 38 4 Washington 25 5 New York 21 Renewable electricity Number of Rank State companies 1 California 87 2 Massachusetts 22 3 New York 11 4 Texas 9 5 Washington 8 California received 39% share of VC investments among North American companies ($654 million out of $1.69 billion) in Q Source. Cleantech Group LLC.

14 Top ten academic tech transfer offices By number of patents issued in 2008 Number of patents Sources: AUTM U.S. Licensing Survey: FY2008.

15 California s cutting-edge industries Solar power Green vehicles Leader in fuel economy standards and registered hybrids, electric and natural gas-fueled cars. Los Angeles and San Francisco are the top U.S. hybrid markets. 38% of the nation s solar energy patent registrations. Fast-growing local demand for clean tech. Roof-top solar installations have doubled two years in a row. Life sciences clusters San Diego, Los Angeles and San Francisco are among top clusters. Strong player in genomic medicine and photosynthetic algae technology As of 10/2011. Leader in venture capital investments 58% of all recent venture capital funds are in California 9 of the 11 biggest investments are in the state Major player in clean-energy investments. Next generation of high-tech industries First in semi-conductor research Pouring resources into green ventures Example: digitized energy grid Ultra-high-def video conferencing Sources: Time, PricewaterhouseCoopers, National Venture Capital Association, Thomson Reuters, Tesla, Milken Institute.

16 California sees exodus of companies Founded in California, now with more employees in Oregon New major expansion in North Carolina

17 Wage costs 5th highest in the nation Most expensive states, 2010 Rank State Index 1 New York Connecticut Massachusetts New Jersey California Maryland Virginia Illinois Alaska Washington Sources: BEA, Moody's Analytics, Milken Institute.

18 Tax climate among least favorable Major components of the state business tax climate index, 2010 Selected States Corporate Tax Index Rank Unemployment Insurance Tax Index Rank Property Tax Index Rank Total Rank Highest tax burdens New Jersey New York California Lowest tax burdens South Dakota Wyoming Alaska Source: Tax Foundation.

19 Kauffman Index for Entrepreneurial Activities Rank Metropolitan Statistical Area (15 largest metros, 2010) Entrepreneurs per 100,000 people 1 Los Angeles-Long Beach-Santa Ana, CA Houston-Baytown-Sugar Land, TX Atlanta-Sandy Springs-Marietta, GA San Francisco-Oakland-Fremont, CA Miami-Fort Lauderdale-Miami Beach, FL New York-Northern New Jersey-Long Island, NY-NJ-PA Washington-Arlington-Alexandria, DC-VA-MD-WV Phoenix-Mesa-Scottsdale, AZ Boston-Cambridge-Quincy, MA-NH Riverside-San Bernardino, CA Chicago-Naperville-Joliet, IN-WI Detroit-Warren-Livonia, MI Dallas-Fort Worth-Arlington, TX Seattle-Tacoma-Bellevue, WA Philadelphia-Camden-Wilmington, PA-NJ-DE 150 Sources: Source Kauffman Foundation.

20 California among least friendly toward small business Small business survival index, California rankings, 2010 Rank among states Index components (1 = Best, 51 = Worst) Personal income tax rate 49 Capital gains tax rate 50 Corporate income tax rate 42 Corporate capital gains tax rate 43 Property taxes 31 Sales tax 22 Unemployment tax 1 Health insurance mandates 42 Electric utilities 42 Workers' compensation 43 Crime rate 23 Number of government employees 7 Gas tax 51 State and local gov. 4-year spending trends 29 State and local gov. expenditures 47 Highway cost effectiveness 48 Overall Small-Business Survival Index 48 Source: Small Business and Entrepreneurship Council. Note: Includes District of Columbia

21 California s innovation and R&D assets are among its competitive advantages Milken Institute State Technology and Science index, Top ranked states, 2010 California ranked 4th Source: Milken Institute. Top 10 Second tier Third tier Bottom 10

22 Venture capital investments by state 2010 VC investments, total US$ millions 12,000 10,000 8, ,000 4,000 2,000 VC investments (Left) VC deals (Right) Number of deals 1,400 1,200 1, CA MA NY TX WA IL PA CO NC NJ 0 Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report. Data: Thomson Reuters.

23 Port activity continues to support recovery California, annual growth Percent Exports Imports Sources: California Department of Finance

24 Ports contribution to economy Value of goods traded through ports in 2010 US$ billions $397b 22% of Real GDP of California California including all ports $120b 18% of Real GDP of Los Angeles Los Angeles metro including Port of LA and Port of Long Beach Sources: California Department of Finance, American Association of Port Authorities.

25 California exports composition Q3, 2011 South Korea 5% Percent of total CA export value, 4-Q average Europe 19% Other 32% China 9% Japan 8% Canada 11% Mexico 16% Sources: U.S. Department of Commerce, Wells Fargo Securities LLC.

26 Asia represents a large share of California s export California vs. U.S., 2010 Percent % % Sources: U.S. Census, Milken Institute. California U.S.

27 Middle-skills gap indicates skills mismatch California, 2009 Source: National Skills Coalition.

28 Home-grown high-tech talent on the decline Recent S&E graduates per 1,000 civilian workers, California Interstate ranking Bachelor's degree Master's degree Ph.D Sources: National Science Foundation, Milken Institute.

29 Mediocre academic performance for the average high school graduate Mean SAT score, top ten states and California, 2010 Score California ranked 35th IA MN WI MO MI SD IL KS NE ND CA Note: Red line denotes the national average. Source: College Board.

30 Nearly half of Spanish speakers in California did not finish high school Educational attainment by language spoken at home, 2010 Percent Less than high school High school Some college or associate's B.A. or higher English Spanish Other Sources: U.S. Census Bureau, Milken Institute.

31 Going to college is costly For undergrad at public university, as share of disposable income Percent 60 Highest % 2008 Change from 10 years ago Lowest -10 SC VT OH MI PA CA SD FL AK LA WY Source: National Science Foundation.

32 Heavy reliance on foreign-born tech talent STEM degree holders in California, 2009 Thousands Native Foreign-born Engineering Physical sci. Bio and life sci. Math and stat Computer/info Sources: U.S. Census Bureau, Milken Institute.

33 California is the main host of foreign students Number of foreign students, top ten states, AY 2009/10 Per 1,000 people 35 California ranked 1st CA NY FL IL PA TX OH MI MA IN Source: Institute of International Education.

34 Geographical distribution of H-1B employees Newly certified, 2001 vs FY 2001 FY 2010 Other states 36.3% Massachusetts 5.3% Florida 5.3% California 22.1% Other states 41.6% New York 12.0% Texas 7.8% New Jersey Massachusetts Illinois Florida Illinois 6.7% 4.1% 4.5% 4.2% 5.2% California 18.2% New York 11.7% Texas 8.3% New Jersey 6.7% Sources: Foreign Labor Certification Data Center, Milken Institute.

35 Top 10 industries of H-1B employees Newly certified in 2010, California Industry Total Percent Computer systems design and related services 18, Semiconductor and other electronic component manufacturing 2, Colleges, universities, and professional schools 2, Management, scientific, and technical consulting services 1, Scientific research and development services 1, Computer and peripheral equipment manufacturing 1, Architectural, engineering, and related services 1, Software publishers 1, Communications equipment manufacturing 1, Accounting, tax preparation, bookkeeping, and payroll services Other 17, Sources: Foreign Labor Certification Data Center, Milken Institute.

36 Attracting vs. retaining talent: Net migration masks the full story Interstate ranking, migration rates of B.A. degree holders, 2009 Inflow rate Outflow rate Net inflow rate (ranked from highest to (ranked from lowest to (ranked from highest to Statet lowest) highest) h lowest) Delaware Oregon Arkansas Colorado Iowa Texas Louisiana Virginia Kentucky South Carolina California Sources: U.S. Census Bureau, Milken Institute.